55 and Counting…Have I Saved Enough?
This summer holds a milestone birthday for me — 55! As I roll down life’s highway with millions of other baby boomers, it occurs to me that I need to pull over for a brief “rest stop” to consider financial preparation for what lies ahead. Hopefully, it is not too late to make any necessary adjustments. What questions must I answer?
First, what will my income be at age 60, 65, 70, or whatever age I choose to retire? I need to pull out my Social Security projection – they send me one every year now. Next, I will check with my retirement plan administrator (mine happens to be Guidestone) and request projections. I will get with my IRA custodian for help to project an amount that may be available from that account. Regarding savings and investments (regardless of size), I will estimate earnings at a conservative 5%. Lastly, I will make my best guess about earnings I could receive from part-time projects and any real estate or business holdings. With this information, I should be able to make a reasonable estimate of income.
Second, what expenses might I expect? A rule of thumb some follow is 75-80% of current expenses. To be more specific to my situation, I will take time to list expenses by categories (food, travel, transportation, giving, medical, housing, utilities, etc.). I should probably add 10-20% to these projected expenses because I know I may have overlooked something or an emergency or inflation may happen.
Third, how do my projections for income and expenses compare? Income that exceeds expenses would be a mighty good start. But should expense projections exceed income expectations, I had better see what can be done to boost the savings before retirement. I may have to make some immediate lifestyle adjustments.
Fourth, am I confident in these “rest stop” projections? Hopefully, they have headed me in the right direction. However, I know I should seek professional retirement planning, financial planning, and tax advisors who can help me adjust my calculations to reflect tax and inflation effects over a 10-, 20-, 30-year or more retirement — God willing. Proverbs 15:22 says, “Plans fail for lack of counsel, but with many advisers they succeed.” I will ask God, my perfect counselor and guide, to lead me to capable Christian counselors.
Fifth, have I saved enough? After reviewing my situation, I’ll get the help I need to make certain. No matter your age, it is not too early or late to be a faithful manager of God’s resources. Properly planning to use His blessings to provide for family and minister to others is good stewardship. Won’t you join me in this endeavor? Don’t be surprised to discover that God is unbelievably good to us!
Stephen Mathis, CFP
MBF Executive Vice President
Missouri Baptist Foundation