I speak with people all the time and everyone has different plans on how to retire. However, the conventional wisdom has always stayed pretty much the same: Invest in a mutual fund or an IRA up to the max allowed for tax savings, and assuming a decent rate of return, you should have a sufficient nest egg to retire on once you've hit 65.
I don't know about you, but so many things in that one statement do not fit into what I would consider wisdom. Now, even the financial planners that have been stating this for years are starting to doubt themselves. I came across this article in the NY Times and it discusses how the financial calculators used to estimate what someone should be putting aside for retirement may be faulty. You can read the entire article here. (Caution: It's a pretty lengthy article).
To summarize, most of these financial calculators are designed where in order to hit your target goal, your money has to double in the final 10 years of the trade. Also, my biggest issue with these calculators is that they always calculate using an average rate of return over a prolonged period of time, but the financial markets are cyclical. Also, for someone who has retired recently or is getting ready to retire, the past decade has not been kind to them. There are other ways to take control of your retirement by educating yourself on alternative investment strategies and taking chances. I believe that most people are afraid to take any kind of financial risk, and it's not necessarily failure, but lack of any great success that keeps them from reaching their financial goals.
Good Luck Everyone!
Jacob
"You miss 100% of the shots you don't take."
- Wayne Gretzky
