Do you find the amount you need to retire intimidating? So much so that you avoid digging into details or saving altogether? Are you ready for some direction that will get you motivated and moving? In this video, I will share a truth about how much you need for retirement savings, which you likely don’t know, to help propel you forward. So read on to learn more.
Retiring is an important milestone in our lives — something that we work tirelessly to achieve, squirreling away a nest egg through years of sacrifice in hopes that it will be enough.
Alternatively, maybe retirement feels so out of reach that we ignore it — the goal being so intimidatingly big that it’s impossible to even start.
Advice on how much we need for retirement is as varied as there are snowflake patterns, confusing everyone. Hearing that we need millions of dollars in savings can make this dream feel entirely out of reach. Add inflation into the mix, and the goal keeps slipping further away. But sometimes, all one needs to get started or obtain momentum is a reframe.
Rather than focusing on “how much” money you need to retire comfortably, I challenge you to shift your thinking towards “how little” savings you require. This shift can open up an entirely different conversation and start putting the end goal within reach.
In taking this approach of “how little” you need, you start to see the tiered levels of comfort and freedom unveil themselves.
Let me give you a quick example…
Using the Rule of 25 to calculate your retirement amount, if you have an annual budget of $75K, your estimated retirement needs are $1.875M. If you lower that yearly budget to $50K, your estimated retirement is $1.25M. A $625K difference. This is enormous, and the lower amount is so much more obtainable!
If you want a more detailed discussion on the Rule of 25, here is a LINK to the article where I discuss this.
While it may seem difficult to cut your lifestyle back to reach lower annual spending, I want you to think back to when you were just starting on your own. You didn’t have all the nice things and got by without everything you have now. Your lifestyle was obtainable at that point. I want you to look at retirement with these stairsteps in mind.
TIERS OF FREEDOM
What are the lower tiers of freedom that you can get to? Is there a minimum budget you could live on? What would be the amount you need to allow you to go part-time for work, freeing up some of your time? What kind of savings would you need to travel the world? Or take a 6-month sabbatical next year? Saving for financial freedom (aka retirement) is not a static goal but a dynamic range of possibilities. All too often, people sacrifice tomorrow for today, and not necessarily on purpose. Living with lifestyle creep is similar to the analogy of a lobster being cooked alive. We don’t always recognize when our spending is out of alignment with our needs and our wants overtake our budget. The natural increase in expenditures over time often masks our costs as needs.
NOT SACRIFICES, ALIGNMENT
Saving for the future doesn’t have to feel like you are making major sacrifices. By learning how best to manage your resources in alignment with your values, you can create a plan custom-tailored to your individual needs while maintaining an enjoyable quality of life!
In other words, financial independence does not mean compromising what matters to you; instead, it’s about identifying what’s truly important and adjusting your spending accordingly.
Embracing the idea of “how little” you could retire with brings a tier of the overall goal of complete financial freedom closer to the present moment, allowing you the ability to believe it can be accomplished.
Believing in your ability to succeed is a major catapult to getting you over the obstacles preventing you from starting or hitting the mark.
This mentality also extends beyond finances; by reframing one’s goals towards what truly matters rather than what society tells us is important, we can put ourselves on a path toward true freedom — both financially and mentally.
If you’d like to read more about why I think you should never retire and instead find financial freedom, please read my article video called “Why I Want You NEVER To Retire” by clicking on this LINK.