How to Eat an Elephant

My husband asked me if I give people their “number” (what they need to set aside for retirement) and I said “No way, it’d scare the crap out of them!” It’s true. You know and I know it; it’s too big, it’s like looking at an elephant and wondering how in the world you’re going to eat it. Of course, as the rest of the line goes, you eat it “one bite at a time.” That’s what I do as a CERTIFIED FINANCIAL PLANNER TM professional; I help people take one bite at a time.

Planning for retirement is the main focus of most financial planning engagements; after all, most people can manage their day-to-day financial decisions (some better than others) but need some coaching on the more complex and serious financial issues.

There are so many factors to take into account when planning for retirement, such as what your living expenses might be, how much will you likely receive from Social Security, where might you live, how much can you realistically save towards retirement considering other financial obligations you may have, what funds to use in your 401(k) and, if you are entitled to a pension, which option is most beneficial. Lots of things to consider. Remember, you may not want to try this at home! Anxiety is seldom – if ever – a helpful tool for making decisions (although it may prompt you to take some action).

Remember, “One bite at a time.”

Financial plans are merely tools to help us gauge what our next step – or bite – should be. They should always include a list of action items that you can check off as you accomplish each step. The list should also be realistic about how long it will take to complete each task and how much time you can set aside per week/month to accomplish certain tasks (such as “implement recommended 401(k) investment allocation” seems simple until you have to log in to the company’s website, get the required passwords, paperwork and such, your own misgivings and anxieties notwithstanding, oh, and then you have to designate a beneficiary….).

Do yourself a favor, be wary of getting the “number” if you are the type to get overwhelmed; it won’t be beneficial. Take one bite of the elephant (I.e. enroll in your 401(k)), then another (I.e. research one of the mutual fund options) then another. Know when you’re full, and when you can take another bite.