On this episode of The Retirement Huddle podcast, Mark Howard gives you a retirement pop quiz. Let’s test your knowledge.
1) Do you know how much it costs to fund your lifestyle?
Most people have a guess, and it’s usually way off. Some people have such a good income that they haven’t really lived on a budget in a long time.
Typically, the best thing we can do is start off with a budget. We send clients a spreadsheet to fill out that shows where their money is going.
2) What do you need your net worth to be before you retire?
That’s a trick question. This shouldn’t be a focus for you. The focus instead should be on how much income you need your investments to produce and how to best structure that income. This is a big mind shift for a lot of people.
We should be concentrating on saving, because we want to have income once the paychecks stop.
3) What did you learn about retirement from watching your parents?
Unfortunately, whatever you learned likely isn’t relevant for you. You’ll likely live much longer than them, you probably don’t have the pension that they had, and the costs for your healthcare during your retirement years will dwarf their costs. However they structured their retirement probably doesn’t apply to you.
4) How does what’s happening in the news this week affect your overall retirement plan?
The answer should be “none to almost none.” If you lose sleep because of market fluctuations based on issues in politics, culture, or foreign affairs, then you probably have too much risk in your portfolio.
Listen to the full episode or use the timestamps to jump to a specific section. Thanks for listening! We’ll be back for another show every other Thursday.
[1:51] – Fund your lifestyle
[5:22] – Net worth
[7:11] – Parents
[8:52] – News
[9:41] – Nursing home