Many Florida residents may have heard of, or read about, the benchmarks that smart people use to determine their goals for retirement savings. Depending on whom one asks, this can be a million dollar figure, or a certain percentage of your current income. Some experienced financial professionals, however, say that a static figure is not best for everyone, and that proper retirement planning may require a more introspective approach than simply pulling a figure out of the literature.
These financial planners point out that people's needs and desires vary greatly, and that there is no reason that should change in retirement. On one hand, most people can expect their expenses to change once they stop working. This can be the result of a lower tax rate, less spent on business wardrobe and commuting, and one will no longer be saving a portion of one's income for retirement. Further, it is advisable for those approaching retirement to do everything possible to eliminate fixed debt, such as a mortgage. Lastly, most people can expect social security payouts to replace at least a portion of their working income. Because of this, more conservative investment strategies may be warranted, especially as people approach that last day of work.
On the other hand, some individuals will have big plans for retirement. World travel, or the adoption or expansion of an expensive hobby may pay great personal dividends, but require a greater financial outlay. In these cases, a more aggressive investment portfolio may be indicated to ensure an adequate retirement income.
In any event, prudent individuals will make retirement planning an integral part of a larger estate plan, which should encompass both end-of-life and incapacity planning. Along with such documents as wills, healthcare proxies and powers of attorney, Floridians should consider what they want to do with the last part of their lives, and explore all the possibilities that exist to finance those dreams.
Source: thefiscaltimes.com, "Retirement's Magic Number Is a Moving Target," Kelli B. Grant, Aug. 27, 2014