The Question Most Asked

by Jeff C. Johnson


My life has been centered on my work as a financial adviser. And I live in a modest-sized Midwestern town, Lincoln, Nebraska, so it’s not uncommon that I meet people socially who know of me and the work I’ve been doing. It’s all part of living in a community.

After a handshake and small talk, it’s not at all uncommon for my new friend to ask financial questions, and I love talking about saving, investing, and planning, so I do nothing to discourage it.

You might have already guessed what people ask about… It’s the “when” and “how much” questions that surround retirement and leaving the workforce for a life where every day is a Saturday. The questions usually start fairly general, something like: “What are people doing to retire these days?” And eventually, the questions progress to something more specific and personal: “How would I know when I have enough money to quit working for life?”

In my book The Eight Points of Financial Confidence, point number five is to build your financial confidence by answering your own question.

In addition to reading this chapter of my book, you might consider engaging a financial planning professional who uses powerful planning tools to help you chart (and annually rechart) your course from the present to your future retirement.

Any serious planning firm will have technology-driven tools that lend clarity to what could be an otherwise murky financial future. These software packages must mix in a number of variables, such as

  • What resources do you have at this point in time?
  • How much can you add annually?
  • Do you have pension income that will support retirement?
  • What will your Social Security income be and when should you claim it?
  • What rate of return is reasonable, based on your ability, need, and willingness to take investment risk, and given investing’s uncertainty?
  • How much money do you anticipate you will need, after taxes?
  • What will the inflation rate be, and can you factor that into your future need for income?

My colleagues and I at Buckingham Strategic Wealth, for example, engage a proprietary Monte Carlo simulation-based tool we simply refer to as a “Wealth Analysis.” Factoring in all the data listed above, this program develops our best estimate of a client’s potential success with a confidence factor that goes up to 100 percent.

“How much is enough?” is fine for small talk at a social event. But when it comes to your real-life financial success, take time to connect with a financial professional who can help you gather the necessary input of data, will help you assess your need to accept risk, and will stand ready to update your plan regularly.

If you need assistance in identifying a trusted financial adviser, get a copy of my book The Eight Points of Financial Confidence. In the book, I go into great detail with instructions about how to find, interview, and ultimately hire a trusted adviser.

Unless you know the answer to your “retirement” questions, you cannot become financially confident.