pandemic is a key factor why there were 2.4 million early retirements in 2021 – people wanted to make memories, not money. This may have been a good decision if you were prepared to fund a 30+ year retirement, but it could be a bad decision if you haven’t lined-up the necessary income needs that you will need to have the lifestyle you deserve and paying particular attention to those sources of protected income that you can count on for a comfortable lifestyle.
Added to this conundrum is the current high level of inflation. While experts forecast this will normalize eventually, one of the foundations of financial literacy, compound interest, helps explain how even a modest rate of 3% can impact your retirement years. A rule of thumb tells us 3% will double your money every 25 years: $100,000 today will be $200,000 in 25 years and $400,000 in 50 years. But when it comes to spending, this means your money needs to grow to this amount just to maintain purchasing power.
The Time Machine
Unfortunately, research teaches us that most people tend to be short term thinkers, not long-term planners. One way to “hack” this behavior is to get connected to your future self. Create a visual of your Financial Lifestyle by setting aside 15 -20 minutes to picture in detail what a full day would look like when you are retired. Where are you living? A city? The suburbs? Are you living in a house? A condo? What does your décor look like? Who are you living with? A spouse? Your children? Alone? This can give you a much better idea of how you want to live and help identify the financial goals which will get you there. A financial advisory firm like 1st Capital can be a great resource to help you with this exercise. Psychologists also find an age regression tool can help you be more invested in your future Lifestyle outcomes when you can see your future self today.
I want to offer some healthy food for thought to help you control your Financial Lifestyle and keep your head while others are losing theirs (and possibly blaming it on you):
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My goal as always is to give everyone the best Financial Lifestyle tools to enhance your assets, but keep in mind that your mindset is frankly your biggest tool to long-term financial success.
For more information contact at 312-952-8040/Cell * 312-243-3907/Office * [email protected] * www.1stcig.com.