This week’s show is, in a word: focused. Pete and Damian really drill into the most general area there is: Retirement. The mailbag was opened and brought out a question from a listener that Pete could get excited over: “Here’s my financial story; now how are things looking for me?” Our hosts are financial experts with a great deal of experience in the matter, but to make it sink in, they bring in an even more special guest: GSG, herself, Gold-Star Gayle!
Can’t listen? Check the Show Notes!
- The writer and his wife are in their early-30s, so not retiring any time soon.They’ve got 3 children, and live in the Bay Area. His wife stays home with their young children. They’ve got about $200k saved for retirement, “in the Bay Area no less,” in a pair of IRAs, a separate emergency fund, and a separate brokerage account for the kids’ college, weddings, etc. That’s impressive!
- Sounds great, right? Here’s the writer’s question: “We want to have about $120k per year, in today’s dollars, in retirement. Are we on a good track to achieve this goal?”
- Let’s go deeper. Pete, Damian, and GSG, with their financial powers combined, read into this scenario and find the real financial question on the table: “How much from each paycheck should I put towards retirement?” Most people would try to immediately try to generate a dollar amount in their mind. The right answer is a percentage: 12-14%. This is the Ultimate Retirement Question.
- The average person thinks that if they’re doing the company match, they’re doing well. The average match is 3.7 – 4.7%. Because it’s a match, that means that the average person is putting in about 7 – 9%. That is much smaller than 12 – 14%.
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Peter Dunn a.k.a. Pete the Planner® is an award-winning financial mind and a former comedian. He’s a USA TODAY columnist, author of ten books, and is the host of the popular radio show and podcast, The Pete the Planner Show. Pete is considered one of the foremost experts on financial wellness in the world, but he’s just as likely to talk your ear off about bass fishing.