How many pay days do you have left till retirement? As in, how many times will you still be paid a salary? Ever calculated this?
Perhaps you plan to retire early which means you have even less pay days left. In that case you really would need to know exactly how many pay days are left.
Why care how many pay days I have till retirement?
Let’s assume you work in a standard job where you get paid monthly. That would mean 12 pay days each year. If you are 35 now and plan to retire at age 65, that would work out to 360 paydays.
You can use this number to help you with retirement planning and goal setting. You cannot simply have a goal to “save as much as I can”, or “save enough” as these goals are hard to quantify. In fact, you will never know if you have reached your goals.
Your retirement plan needs to include specific amounts. You will most probably want a large pension fund, perhaps you aim to have other income such as rental, and maybe you have assets which you specifically plan to sell when you reach retirement age. These are all great, but they need to be realistic and you need to reassess them often.
Using your “paydays ’til retirement” number you can easily plan and track how you are doing with regards your retirement plan. You have a set time period and set amount and can use various methods to plan, predict and assess your situation.
Let’s assume you have 360 paydays left, and your goal is to have 2 million in a retirement fund at retirement age. You can simply create a spreadsheet with 360 rows. Show your current fund balance, your current contributions, assumed growth (rather assume a lower growth and plan accordingly) and assumed salary (and contribution) increase (again, take a lower assumption).
This will then show you whether you’re on track or not.
This kind of planning doesn’t take into account major life changes that could happen, and we cannot predict the country and global economy. In fact, don’t try to make things too complicated. Just do some basic calculations and see where you stand.
Want to take it to the next level?
This is quite simplistic and good for a general overview, However, if you really want to get you plan in place I’d suggest you find a financial adviser who can create a personal plan for YOU. Not just selling products, but actually a financial plan for you and your family based on your needs and wants. This is who I would recommend, although you can find your own adviser.
If you’re wondering how much you need to retire, here is a good starting point. It’s by no means an exact science, but it should give you an idea of where to aim at.
Your number of pay days until retirement will slowly count down. Think of it as a ticking time-bomb… are you ready?