You Need $3.2 Million to Retire!!
Believe it or not, this was the message that I heard from a financial advisor in 1996. He was presenting to employees at a non-profit in Minnetonka Minnesota. His firm is one of the largest and most well-recognized financial advisory firms in the country.
Of course, his assumptions were preposterous – even though his presentation was slick and well-delivered. Many brokers, advisors, and investment firms use unnecessarily frightening scenarios to promote their products. I recall thinking how pointless it is to start saving if I need to get to $3.2 Million. How many people in the middle class, not to mention employees of non-profits, are going to get close to $3.2 Million? How about close to $1 Million?
Don’t get me wrong – of course people should save and plan for their future. That is definitely prudent. This is what I help people do all the time! But what do YOU need to retire?
Well I have good news. In my experience, and I have done hundreds of retirement plans for members of the middle and lower economic classes, people can enjoy their mature years without having anywhere near $1 Million. Circumstances vary dramatically from person to person and much depends upon your debt, expenses, and flexibility. In addition, many people are integrating work into their plans to fill in the gaps. So relax a bit – do your best to focus on what you control and ignore many of the ridiculous claims about how much you need to accumulate.