Re. Concerned about finances (Castanet, Feb. 7)
Why would anyone believe one needs $1.7 million to retire?
By what standard do any individuals need that kind of money? By the time one retires, one would expect their home should be paid off, their children through university, have completed trade’s training or at least are employed.
Because I am retired, and a former financial advisor with a major national investment firm, I can truthfully say most retirees do not need that kind of money just to retire comfortably, even here in the Okanagan.
Let us say you want to retire at age 62, which the article states and let’s suggest you are now 40 years old and are in a financial position to put money away for your retirement. Let’s also assume your savings and investments are currently low, meaning you need to put away the maximum amount monthly to achieve that goal.
Also, let’s say you need to calculate the monthly contribution amount to hit $1.7 million starting from scratch. At age 40, you have 264 months until retirement. Ignoring interest on your money, you need to deposit at least $6,439.00 per month in any combination you chose. That is in after-tax income.
Questions to ask include:
What are my financial objectives?
1. Is it to leave my estate with a million dollars? If so, perhaps a term insurance policy might work. I am thinking for a lot less than $6,439.00 per month.
2. To be able to travel? Check out a variety of all-inclusive resorts or other travel plans like a cruise or even spending winters in a warm climate. How long do you want to be away from home and family? Can anyone suggest you would need $1.7 million to enjoy any of these?
3. Fine dining?
4. A new vehicle every few years?
Do you get my drift? None of those mentioned take hundreds of thousands of after-tax dollars yearly, or for that matter, every decade.
So my question is why should anyone believe a “biased” report coming from a company that could benefit financially from those who believe their synopsis?
Robert Hepting , Kelowna