Never Retire - How Does A Traditional Retirement Planner Deal With Those Of Us Who Will 'Never Retire?'
In today’s installment, we deliver the Q&A we promised with a traditional retirement planner, who also happens to be a paid subscriber to the Never Retire newsletter.
I decided to do this because it’s always nice to get a perspective from somebody working on the ground in the retirement industry. Particularly because it’s easy to get caught up in your own situation and what you think and believe based on it.
Anyhow, this is the unedited Q&A I conducted with Brian Tegtmeyer.
Brian is an Ohio fee-only Certified Financial Planner Professional (CFP®) with over a decade of financial planning experience. As a fee-only financial planner, Brian provides comprehensive and objective financial life planning to help clients over 50 organize, grow, and protect their assets as they transition to retirement. You can visit his website to learn more.
This information is only general explanations and education. It is not specific investment advice. Before considering acting on anything you read, you should consult with your investment advisor.
Rocco: What would (or do) you say to someone who comes to you and says they know they have no chance of saving a million dollars or more?
Brian: They may not need a million dollars. Depending on how much they want to spend in retirement, when they plan to retire, and their other income sources (social security, pension, wage income), they may need a lot less (or more) than $1 million.
If someone comes to me for help, I will ask questions to get a picture of what they want their retirement to look like. Once I understand what they want to do in retirement, then we can estimate how much money they need in retirement and how that compares to what they will have when they retire.
It’s essential that people look at their own situation and calculate their spending need and don’t rely on rules of thumb that say you need a certain percentage of your pre-retirement income or need to have a certain amount saved by a specific age. Everyone’s situation is different.
There are several online calculators that can help with a simplified version of this exercise.
Rocco: How much money do you think the typical couple - or single - requires to retire comfortably?
Brian: The amount they need is primarily driven by how much they want to spend in retirement and when they plan to retire.
I’ve seen people live comfortably on $3,000 per month and I’ve seen people struggle to keep their spending under $12,000 per month. It’s fun to look at the charts that say, “you should have this much saved by this age”, but they are not that helpful. They can give some people a false sense of confidence and others a feeling of guilt for not saving enough when they are fine.