At a conference I attended recently, I participated in a retirement simulation. The goal of the simulation is to give you a better idea of what to think about for retirement and an estimate on how much money you might need.
There are other financial simulations out there, primarily for youth and young adults on what to expect when living in the “real world” after getting a full time job and having a kid. This one was different. Instead of going and spending money, you were getting an estimate on how much you might need to retire with the lifestyle you want.
For the simulation, you would go to different booths where the volunteer would ask a couple questions to try and gauge what percentage of your money you would spend in that particular area. After that, the volunteers would tell you what your percentage was and what the national average was. You would continue to do this for all the booths and then at the end you’d get some calculations and formulas to determine how much you would need to save for retirement. The booths varied, but included food, health and fitness, housing, travel, giving, and more.
There are so many variables involved in calculating your retirement number and what you need to save. It was stressed that the simulation was meant to merely give you a guesstimate, something to get you thinking and to take action. They encouraged attendees to go talk with someone about their retirement goals and develop a plan to make it happen.
I’m not close to retirement, but I found the entire simulation extremely beneficial. I think I’ve got an idea of what I want my retirement to look like, but I know it’s going to continue to change as I get married, have kids, and go on with my life. As it stands, my percentages added up to be higher than the national averages, but mostly because I want to travel a lot and plan to have a somewhat larger house (for all my hypothetical grandkids to visit). This just means that I will need to make sure to save more money while I can.
Have you ever received a “retirement wake-up call”?