Savings goal – how do we determine it and why is it difficult to do so?

Nest egg. The accumulated amount to generate income during retirement. What is that magic number? An elusive reality.

This article by PlanSponsor cites guidelines that suggests a factor of salary that should be accumulated at various ages.

What makes this determination a complex process are all the variables that influence this number – the uncertainties of life. Quantifying the financial impact of those variables? Even more difficult.

However, having a number helps as a starting point. Needless to say, then comes the difficult, time consuming exercise of identifying the major expected events that will determine financial needs at various points during retirement.

It all comes down to preventing unpleasant financial surprises in the future. Seeing it in this manner helps realize the importance of this process and why it is important to start thinking about it sooner rather than later.

Are you ready to begin this exercise? Where would you start? With a desired goal or the known variables? Have you given some thought to what those unknowns could be?

Something to think about, and share your ideas.