Today’s Prep:
How can you know just what you need? Eric talks through four different financial scenarios to help you get a better idea of what you need to consider and feel confident in your decisions.
(Click the featured times below to jump forward in the episode)
Equipping Points:
Sometimes it can be hard to determine just what we really need. How can you know? Everyone’s situation is different, but there are things you can do to better understand your unique needs and situation. Let’s discuss four areas
How can you know how much income you’ll need in retirement? Eric has an easy answer, and that’s to come in and get a Retirement Readiness Review. The methods they use to figure it out start with figuring out how much you spend and will likely want to spend in retirement. Look at your bank statements for the past year to get an understanding of what you’ll need. But then you’ll want to add in the fun stuff like travel or home improvements.
How do you know how much you need in savings? Typically, you save an emergency fund with six months of expenses during your working years. But during retirement, liquidity is different. You have more access to your accounts. There are still things like taxes and risk to consider, but you have more options when it comes to getting a large sum of money if needed.
When it comes to life insurance, how much do you really need? When you are working and have a young family, you want to make sure you have enough to help with the burden of somebody dying. In retirement, it is a tool that allows you to leave tax-free money to your heirs. You may not need life insurance for the same reasons once you are retired, but you may find it serves your purposes from a tax angle.
What kind of risk do you have and how much should you pay attention to the rules of thumb about it? How much risk you should take depends on how much income that you need. The rule of 100 is one rule people often apply to a risk assessment, but it is not always the one that best suits you. What’s your risk tolerance? Eric goes through risk analytics with his clients to make sure their risk tolerance and their portfolio align. Reach out to a financial advisor to ensure your financial plan accounts for your needs and wants.
Listen to the entire episode or skip ahead using the timestamps below.
1:35 – How much income will I need in retirement?
4:43 – How much do you need in savings?
6:40 – How much life insurance do you need?
8:53 – How much risk should you have?
Today’s Takeaway:
“Instead of looking at how much I have to save to get to retirement, you really want to look at the income you’ll need. Write down what you’ll spend.“
-Eric Peterson
Subscribe To The Podcast:
Apple Podcasts - Google Podcasts - Spotify - Stitcher - iHeartRadio - TuneIn
Check out some other recent episodes
What to Know About Retiring Today
When you work with a financial advisor, you aren’t just talking about money. Saving for your retirement also includes thinking about what kind of retirement lifestyle you want to have and what you need to keep in mind for the long-run. Do you want to work, by choice? What kinds of expenses will you have and how are they different in retirement? Is your money going to last for 30 years of retirement? Eric has seen his clients through all of these decisions and shares what to keep in mind about retirement.
Read More
Common Pre-Retiree Tax Mistakes
Let’s talk about the different tax mistakes retirees are prone to make. Between changing rules and a lot of financial documents to manage, you’ll want to avoid these tax mistakes. Eric talks us through where people get tripped up and why. What you pay in taxes can make a significant impact on your nest egg, so be sure to work with a financial profes-sional who can help you navigate them in retirement.
Read More
What Is Your Financial Personality?
What kind of personality do you have when it comes to money? Before you put together a financial plan, it’s important to understand the way you think and approach money. We talk through a few different personalities Eric commonly sees and how he advises them. Whether you are spending whenever you get a good excuse to or more of an intentional spender, it’s good to be cognizant of how you handle it and what possible downfalls you may face.
Read More
Investing Strategies by Profession
From teachers to engineers, there are a variety of people who work with Eric and his team to build a solid financial plan. Those in similar professions tend to have similar mindsets when it comes to finances. We discuss what similarities Eric sees across different industries and how he approaches each of them. Do any of these relate to you and your financial mindset? Find out what strategies a financial advisor might suggest pursuing.
Read More
Life Insurance 101
While no one really likes to talk about it, life insurance can be an important part of your financial plan. We talk about why people cringe when they hear the term, who most needs it, and why you might want to reconsider your preconceived notions about it. Life insurance sometimes gets a bad rap, but it can be a powerful tool. If you care for someone else and you hate taxes, look at life insurance.
Read More
Financial Wisdom from Ron Swanson
Today, we take some quotes from the gruff but beloved Parks and Recreation character, Ron Swanson. He’s got a lot of dry sarcasm that can be hilarious, and surprisingly, can teach us a thing or two about financial planning.
Read More
Outdated Financial Strategies
Some of the strategies of yesteryear might not be the right strategy for you today. We talk through different financial strategies people have used and what makes the most sense for your financial plan.
Read More
What Is Non-Correlated Income?
The term might sound fancy, but non-correlated income doesn’t have to be confusing. Ask, which one of these is not like the other? In retirement planning, you want to have some income that is not dependent on something else, such as the stock market.
Read More
Fact or Fiction: Financial Situations in Retirement
We play a game of fact or fiction when it comes to these five financial statements. Eric explains which one is which and shares why these ideas are true or false. As you make a financial plan, it’s crucial to base it on facts and reality so you can best prepare for retirement.
Read More
Avoiding Possible Financial Disasters
No one wants to find themselves in a financial disaster. Having a plan is a great way to start. On today’s show, we talk about simple strategies that can make a huge difference in your financial future.
Read More