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I was at a luncheon this morning, and the following topic came up - people’s greatest fear when it comes to retirement is running out of money. People fear running out of money during retirement more than they fear dying.
 
The root of this fear comes down to the numbers - how much will I need to retire, how much do I have now, and how much will I need to earn between now and then?
 
But, underneath this fear is a much more dynamic question with far greater impact – will I be able to continue living the life to which I am accustomed? Achieving this depends on many things, not just the numbers. Mostly, it has to do with your lifestyle:

  • Do you live modestly or extravagantly?
  • Do you envision your retirement being spent traveling around the world or working in your garden?
  • When it comes to the present, if you are used to living on $100,000 annually, it is unlikely that you will be happy living out your retirement on a fraction of that. Nobody wants to live in a 1 bedroom apartment when they’re used to living in a 4 bedroom house.

Your earning potential between now and retirement impacts the above factors as well - earning more means you will also be able to save more. For many people, raises and promotions mean that their standard of living will increase. This makes it all the more important to consider how much of those additional dollars to save so that you can keep your quality of life in retirement.
 
Some people may  be very comfortable with all of this. For many though, these questions are not comfortable. In fact, they might be terrifying. So, how do we deal with all of these great unknowns?
 
For starters, here is a simple calculator to help give you an idea of what your magic number might be. This provides a glimpse of insight into what your retirement needs to look like to continue living the life to which you are accustomed. This is your chance to be brave and not turn away. Do not give up. Look at that number, take it in, and if you haven’t already, begin thinking about how you are going to get there. Retirement is something we must start planning now. It’s not too early, and more importantly, it’s not too late. Anxiety and excitement are two sides of the same coin. If your magic number causes anxiety, what can you do now to start making that number a reality? Wouldn’t that reality be exciting?

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