Thank you for joining me for Episode 13 of my Money Wisdom Question Series, where I film answers to common financial and retirement investment questions. Today I’m answering the question, “How do I compare to other people like me when it comes to retirement?”
Everyone’s Situation is Different:
Be cautious about comparing yourself to others. For the most part, a lot of people don’t save enough for retirement. I congratulate you for asking this question. It means you’re concerned about your retirement savings.
The other thing I would mention is that it’s very hard to know other people’s individual circumstances. You don’t know if they’ve had a bankruptcy in the past. They could have maybe paid too much for their kids’ education and their kids went to a school that they shouldn’t have because they couldn’t afford it. Somebody could have inherited money and that’s why they’re well-off, but they might not be telling you that.
Focus on the Things You Can Control:
You can control your own situation. The best thing to do is think of, “If I was retiring today, how much would I need? How much income would I want to come in on a monthly basis?”
Let’s say your number is $5,000 a month. Now, you should find somebody that can calculate that based on when you’re going to retire. If you’re going to retire 10 years in the future, you’ll need more than $5,000 a month. Then you need to figure out what are your guaranteed sources of income? Is it coming from Social Security? Is it coming from a pension? Or is it all going to be based on your savings? It gets a little technical, a little complicated.
I would say do not compare yourself to other people. Take care of things that you can control. Make sure you’re saving enough. If you’ve got an issue of why you can’t save enough, maybe you’ve got some debt or so on, see a financial advisor or a financial counselor. Talk with a fiduciary who can provide you with guidance.
Also, don’t feel overwhelmed that you don’t have enough saved. You just want to take steps in the right direction. Don’t compare. Get started early. See a professional that can offer you guidance because chances are, they’ve worked with many other people in your situation. Take one step at a time and congratulate yourself for making progress.
Thanks for joining me and I hope you found this information helpful! If you enjoyed this topic and you want to hear more, you’ll love this podcast episode where I talk about a similar subject.
P.P.S. Feel free to submit questions here for a chance to have them answered!