In the longest-running study of retirement preparedness, one of the most stubborn numbers over the years has been the percentage of current workers who have tried to figure out how much money they will need to have saved in order to live comfortably in retirement. According to the Employee Benefit Research Institute (EBRI), that figure has stayed at or below 50% since 1993 with only one exception. The latest study found that just 47% of today’s workers have taken that step.
While financial planning is an imprecise science, it offers several important benefits. For one, estimating how much you may need to have accumulated by retirement will help you figure out how much you need to invest each month in order to achieve that goal. Knowing that number can be a motivator to find the money to invest. Another benefit is that planning can provide peace of mind. Moving through life not knowing how your day-to-day cash flow management may impact your future is stressful. On the other hand, taking proactive steps to manage how much you’re spending on groceries, vacations, and all the rest in order to free up money to invest for your future can be reassuring.
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