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Why You Shouldn’t Rely on Financial Benchmarks for Retirement Planning

01 May
Breaking Free: Why You Shouldn’t Rely on Financial Benchmarks for Retirement Planning

By: Colleen Weber

News and Updates / Retirement Planning

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By Colleen Weber, CFP®, CPA

Forget cookie-cutter approaches—they’re for baking, not retirement planning.

The reality is that there is hardly ever a universal standard that fits everyone’s retirement goals and needs. The financial benchmarks you see online are data-driven and lack the personal touch needed for real-life situations. They don’t account for individual circumstances, feelings, or financial obligations.

To avoid relying on generic benchmarks, I’ve put together some tips to help you plan for retirement based on your unique situation and steer clear of one-size-fits-all retirement models.

Identify Your Unique Retirement Goals

Your starting point should be understanding how much you’ll need to pull from your investments/savings on a monthly basis. The amount you decide on should be directly tied to the type of lifestyle you want to live during your retirement years.

Next, decide when you want to retire. That timeline determines how many years you expect to rely on an income source you create. For example, will that income come from Social Security benefits, a pension, 401(k), Roth IRA, or some other source? And in what order?

Don’t forget about family and health considerations. They should be factored into your evolving retirement plan.

All these personal decisions lay the foundation for your unique retirement plan.

Don’t Get Distracted

It’s so easy to be led astray by today’s constant influx of irrelevant information. Imagine trying to research retirement financial information online without getting sucked down a rabbit hole. It’s nearly impossible, right?

Instead of getting irretrievably sidetracked, try to remember that the only investment performance you need to watch is how you’re doing in relation to your own personal retirement goals and timeline.

For example, there’s really no point in checking your progress against an index or some random person’s portfolio results. Your investment strategy is 100% based on your past, present, and future life—no one else’s.

Stay Focused on Your Outcome

Mixed messages on social media, email scams, website popups, and news sources are just a few of the many distractions that can lead you astray. Now add in the inherently volatile nature of investment data and you have a recipe for constant disruption, making it too easy to lose sight of your goal.

Here are some ideas for keeping your eyes on the prize:

  • Regular reviews: Be diligent about scheduling time to regularly check your progress; make necessary adjustments and stay on track.
  • Automated savings: To ensure you’re consistently saving, set up automatic deductions from your paycheck to your retirement savings account.
  • Remember your “why”: To help you stay focused, remind yourself of the reasons you want to retire in the first place.
  • Celebrate milestones: Take time to praise yourself for reaching milestone goals, even if they’re small compared to your big-picture goal.
  • Be patient: Like any goal, realizing your retirement dreams takes time. Stay persistent even when life throws you a curveball or two.

The Bottom Line

Your individual financial plan for pursuing your own retirement goals is the only benchmark you need. The internet will throw lots of distractions your way, but try to ignore them and stay focused on your own path.

If you start measuring your goals against online indexes or other people’s retirement plans, you run the risk of losing sight of your own big picture.

A Personalized Financial Strategy

At my firm, Colleen Weber CPA, CFP®, I recognize the importance of creating a customized strategy in retirement planning without relying on standard financial benchmarks. Before offering advice, I take the time to comprehend your unique situation and specific goals, and I come with the understanding that there’s no universal financial solution for everyone.

If you’re ready to create a tailored plan, contact me and book a free introductory meeting online or call (952) 470-0750. Let’s collaborate to develop a plan that suits your needs—and no one else’s.

About Colleen

Colleen Weber is a fee-only financial advisor, CERTIFIED FINANCIAL PLANNER™ professional, and CPA based in Chanhassen, Minnesota. With more than 20 years of financial planning experience, Colleen provides comprehensive financial planning and wealth management. She specializes in serving clients nearing retirement, retirees, busy professionals, and women. She is passionate about developing financial plans that save clients on taxes and investment strategies that help them pursue their goals. Learn more about Colleen by connecting with her on LinkedIn or booking a complimentary phone call meeting.