Transcript:
Easan Arulanantham:
“What should I do if I’m way behind in my retirement savings? Like, where should I be at a certain age?”
Tom Vaughan:
Yeah, actually, if you’re way behind it first of all, you might be surprised at how much you’re not behind. I’ve had so many conversations with people that are actually doing okay, as far as I’m concerned, but they feel their way behind. Again, that is a success trait: People that worry about not having enough money and up with a lot of money. And so there’s a lot of people, that’s the first thing I would be looking at is like, well, are they really behind or not? So let’s say you really are, and understand that so many people 55 are way behind, or younger, and they’re able to still accomplish a pretty decent retirement. Because they’re highly motivated, they’re heading into that retirement. And so they you can find ways and saving for retirement becomes like one of the most important things that they’re doing. And so it isn’t even as far as the ages go.
So in other words, people don’t just continuously say from 20, evenly all through and add up. But I’ve, I’ve seen that there are those people, they do really well, but boy they’re rare. Most of times, it’s very uneven: not much savings, small amounts, and then huge amounts of savings at the end. And so I think you kind of have to look at where you’re at in that spectrum, as far as that goes. And then look really closely at where you are savings. 401k would be really interesting: Do you have a match? Are you fully realizing that match? So if they’ll match up to 3%, and you’re putting in 1% of your salary, man, make sure you get the full match. Because that’s 100% that the company is going to help you save there, right? They’re going to double your savings up to a certain percentage. And some of these matches are getting really competitive. And they’re very, very good matches. So you know, that would be one area to kind of look at for catch up. I know, Easan, you kind of keep track of some of the like where you should be at certain ages. What do you see out there?
Easan Arulanantham:
So on, though these are rules of thumb, I don’t think they apply to everyone in every situation. But this is kind of just something that fidelity threw out there was that: You should have one times your salary by 30, 3 times by 40, 6 times by 50, 8 times by 60, and 10 times by 67. But depending on your situation, you know, maybe I’m a low spender in retirement: I don’t need to save 10 times my salary then, if I’m a low spender. So there are rules of thumb, but it’s very hard to use these rules of thumb when it applies to people I’d say.
Tom Vaughan:
Yeah, so basically a 67 year old with $100,000 of income should have a million dollars saved at that point in time under that rule of thumb. And yeah, it is. It’s interesting. It does depend on kind of what you’re going to do. Of course we’re planners, right? So and we have access to unbelievable tools, and that’s where we can throw the rules of thumb out because we could do it custom, it depends on each person. So I don’t care what age you are, if you tell me kind of what you want to spend, I can figure out how that’s gonna work one way or another, and show you whether it’s going to work or not. If it’s not, I can show you what you can spend. And then you can look at that and say, “okay, well, I can do that I can make that work.” Or not, right? And then you make some adjustments to other aspects of your overall concept for retirement. But yeah, that’s, I think that for us, you know, not everybody has access to that. But that’s why we have a job, it’s why we have a business is why we have this show. That’s why people keep coming to us. Because we can answer those questions. And we can go through and show people, you know, how that’s gonna work. And if you’re behind, we can show you how we can show you how to catch up. And, you know, we can show you what’s going to happen. And really, for me personally, I just need a plan. I just need a path.
If I have a path that I’m walking down, I feel very comfortable, I feel motivated. I change my mind, then I get a change the path, but that’s not hard to do. And so I just keep a path going at all points in time. So I kind of know where I’m going. And, man, I think there’s huge peace of mind in that personally. And that’s what we do for a living is kind of spell out those paths, adjust those paths as needed. And then help people kind of walk down that path. And I don’t care if you’re 20 or 80 it’s still same thing: Everyone’s got a path, something that they’re thinking about. And if you don’t have that path, what it does, in my opinion is kind of creates this disconnect, and you don’t really know, right? And so I think it creates other problems, you don’t know what you can spend, “hey, I got this opportunity to go on this great trip, but it’s going to cost X amount of dollars.” And without a path and without a plan, you don’t know if you can actually do it. You think he can do it, but I can tell you if you can do it, at least you know, on a Monte Carlo simulation basis, and what happens to your you know, overall MonteCarlo simulation, when we put in that higher trip that higher cost trip. Yep, it works. Nope, it doesn’t, right. So I like those answers that’s better than this kind of amorphous group that we kind of all run into most of the times for most of our lives, we can actually define the financial aspects of our retirement, and really just sitting down with somebody like us, you know, every six months to have a strategy session. It’s unbelievable. It just because peace of mind, and it gives people that path. And then part of those strategy sessions are really for the clients to communicate changes that they might have in that path. We’d like to do this or that or we’d like to start gifting money, you know, whatever it might be. And we can kind of create that and see if it works. And so I think that’s an important aspect to what you want to do there as far as that goes.