David Salazar May 10th 2019 Wealth MODs 101

Time and time and again, research from Morningstar shows that planning for "retirement" is still the top financial goal for an individual. As a matter of fact, planning for retirement is cited 2 ½ times more often than any top financial goal while "financial security," and "other" goals are a distant second.

Planning for retirement is a necessity for many individuals, but most of us put that in our back of our mind and procrastinate saving. I am guilty of it as well. It's a critical time now more than ever to be fully prepared for retirement due to the demographic and economic changes. These changes have transformed the retirement landscape by systematically bearing most of the responsibility and risk to individuals and away from employers and the government.

As a consequence, about half of working-age households are "at risk" of not being able to maintain and sustain their pre-retirement standard of living in retirement. However, there are tools and resources to fix the problem. This website/blog was created to help individuals and families have financial independence and clarity. One of the tools is having a Retirement Calculator and asking yourself, "Will I have enough money in saved in retirement the way I'm currently saving today?"

Although this may seem intimidating or insignificant due to how young or old one may be, it is essential to find a realistic estimate of where you are now and where you want to be in the future. Use the results as a mere starting point to see if you are on track.

You can type in the information that it's asking you or click and drag the scroll bar if that is easier for you. Once that is complete, click on the "Calculate Results" button on the bottom of the calculator. You will see the results on the left if you are using a desktop/laptop or on the bottom if you are using a tablet/smartphone. You can click and drag the scroll bar all you'd like, and the results will update in real-time. Enjoy!

Where are you today?

Is this where you want to be?

If you are on track, then congratulations! There are not a ton of individuals that are on the right course towards their goals.

If you feel like you can do better or you can't find a way to start saving more, don't worry, it's never too late to start investing in your future. If you are a Millennial or retirement is still ways away, then time is on your side. Starting early gives you more time to save, but more importantly, the power of compounding magnifies. That is when you begin generating gains from your previous gains.

Get on the calculator and drag the "beginning contribution" slider to the left and look at how the numbers grow!

If you are nearer to retirement, now is a necessary time to get specific about your financial goals, desired lifestyle, income sources and how much you can spend.

I am going to outline three things you can do right now if you "feel" like it's too late:

• Find Out Your Flexibility - When you sit down, and I mean really sit down and take a look at your cashflows (money coming in and out), you will be surprised how flexible you are in how you spend. Increasing savings while decreasing your discretionary spending.
• Capitalize on "Catch-up" Provisions - Once you reach the tender age of 50, you can start contributing more to your Individual Retirement Accounts (IRAs) and 401(k).
• Make Sure Your Goals and Investments Are Aligned - Individuals usually feel the need to save aggressively, which is perfect but they often want to invest aggressively as well. Those are two different things. You don't want to take a higher risk to make up for the lost time, that could increase the risk of not reaching your goal!

I am currently working on the ultimate budget web application and spreadsheet that will help you find where you can be flexible with your spending. It will be different than your traditional divide your spending into "necessary" and "discretionary" spending columns. I am a big believer in enjoying the process or the journey to your retirement. For the majority of individuals, the accumulation phase is the most prolonged phase of their lives. There are some expenses that, although they aren't necessary to live, they are essential to YOUR happiness.

For those that feel the need that you need tailored advice feel free to reach out. Content to look out for in the future:

• The Roth IRA MOD 2019
• The 401(k) MOD 2019
• The Traditional IRA MOD 2019
• Asset Allocation MOD for DIYs
• The Rebalancing Portfolio MOD for DIYs

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