In the LearnVest article online this week “30 or Bust? What Retirement Really Looks Like When You Put Off Saving” the article discusses the advantages of starting retirement saving in your 20s, and ways to ramp up your savings if you are starting in your 30s.
The majority of the reading audience is self-directed investors that are looking for financial education, probably not going to hire an advisor, and definitely need to know how to best help themselves. She asked me when she interviewed me if I thought that people should use online retirement calculators. I told her, “yes!” They should use everyone one of them that they could get their hands on. I told her that in the online calculators that I have seen, there are usually one or two assumptions that I don’t like, but if you can do several of them that would give you a better picture than not doing planning or doing just one.
One challenge that I have as a professional financial advisor is that the majority of clients that come to me for retirement planning are coming to me in their 50s or sometimes in their 60s and they have never estimated how much they need for retirement. Therefore some of the plans I do require some kind of adjustment in expectations:
1) saving more between now and retirement than they thought they needed to or
2) retire a little later than they hoped or
3) spend less than they had imagined they would,
or a combination of the three.
Which work out fine, and clients go away feeling relived to know what needs to happen to be on track. But if they pulled up calculators when they were 20 or 30 and did some preliminary estimates, wow! The results would be terrific. And I am seeing more 20 and 30 year olds coming to see me for help with balancing financial goals.
I was so thrilled to participate in this article. Financial journalists reach so many more investors than financial advisors ever could. I am so glad that this message can get out. Saving early has a big impact!