Step 3. What Are Your Goals?

Road-signs-381Step 1. Find The Leaks
Step 2. Know Where You Are

Step 3. Know Where You’re Going.

Before you can figure out how you’ll get there and how long it will take, you need to know where you’re trying to go.

What are your financial goals?

I suggest sitting down with a pencil and paper and defining financial goals for the following time horizons:

  • 1 year – What do we need to do this year?
  • 5 years – What would it look like to be financially secure in 5 years?
  • 10 years – What could we do if we were financially independent?
  • 20-30 years – What is our dream retirement situation?
  • 40 years – How can we leave a legacy for the next generation?

If you are married, this is a great time to listen to each other and dream together.  You might be surprised at how this one exercise of dreaming your preferred future together can bring new life and intimacy into your marriage.  After all, isn’t this what you used to do when you were dating?

Are You On Track?

Are you on track for retirement?

Fidelity Investments proposes the following milestones for your retirement accounts:

  • Age 35 – 1x Annual Income
  • Age 40 – 2x Annual Income
  • Age 45 – 3x Annual Income
  • Age 50 – 4x Annual Income
  • Age 55 – 5x Annual Income
  • Age 60 – 6x Annual Income
  • Age 67 – 8x Annual Income

Fidelity believes you’ll be on track with this formula, assuming:

  • you can live on 85% of your present income in retirement
  • you receive social security
  • you’re conservative in retirement investments (5.5% return)
  • you retire at 67
  • you die by age 92

Are you on track for retirement?

To schedule a FREE 30-minute coaching session, click here.

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