Whether
you will read the statistics (above) as good news or bad is very much dependant
on your personal situation and your outlook on life. One thing is clear though;
if you and your spouse reach the age of 65 in good health, there is a 51
percent chance that one of you will live to reach 90-years-old.
What
does this mean for your retirement planning?
This means that even though the official state
retirement age is now a moving target, forever being pushed towards 70, by
several governments in Europe, it would be prudent for you and/or your spouse
to expect to have to live off your retirement income for more than 2 decades,
at least.
Notwithstanding the above, it’s human nature to expect
the best and not plan for the worst, so if you plan on retiring at the age of
55, your pension and savings would have to fund the preferred lifestyle for you
and your spouse for at least 35 years!
The human being is hardwired to focus on short-term
gratification at the expense of long-term goals, therefore financial advisors
are there to help you focus on the long-term. Even though the pessimistic
sentiment is very understandable given the current year in the financial
markets, in the long-term the current bear market is less relevant. Less
relevant unless the pessimism gets to you and you sell while prices of several
asset classes are down significantly over 2022. Part of financial long-term
planning is to plan so that during these downturns you do not have to sell any
assets and you can ride out these periods in the markets without losing too
much sleep. And remember the old adage: it’s time in the market not timing the market
that makes the difference for your returns. If properly prepared, no winter is
too cold, also not the winters in the financial markets.
How
to retire early
It
takes planning and discipline to retire early. You don’t need to be rocket
scientist just need to crunch some numbers and get ready to work hard and apply
some structure to the process. In essence, If you want to retire early, you
have two big challenges:
1.
You have less time to save for retirement.
2.
You have more time to spend in retirement.
Naturally,
if all things being equal, one could have a simple formular, but unfortunately
it all depends on when one starts to plan for the future. Start by estimating
your monthly expenses and calculating how much you will need to retire.
5 simple steps to assist the thought process:
Step
1: Estimate your retirement expenses
Step
2: Calculate how much you need to retire
Step
3: Adjust your current budget
Step
4: Max out your retirement accounts
Step
5: Work with a Financial Advisor
Most people are not familiar on how to broach the
subject of investing in the financial market. So it may be a good idea to work
closely with an established Wealth Management Company and with an
experienced financial advisor. An advisor can help you develop an investment
strategy to make it easier to reach your retirement goals. They can also show
you exactly how much you need to invest each month to reach your goal within a
certain number of years.
Key
takeaways
Start planning as soon as possible and engage the services of a professional financial advisor Today.
Tel: +351 214 648 220
Email: info@blacktowerfm.com
Add disclaimer: This communication is for informational purposes
only and is not intended to constitute, and should not be construed as,
investment advice, investment recommendations or investment research. You
should seek advice form a professional adviser before embarking on any
financial planning activity.