It seems the current approach plan towards retirement is wrong, according to Dan Kadlec, journalist and author. In an article he's written for Time Magazine, "We've Been Asking All the Wrong Questions About Retirement," Kadlec suggests that it's not so much about the amount of money one needs to retire, rather the lifestyle one wants to experience during retirement.
While the number was a popular concept, which made it easy for planners and savers to set a goal, with the market never fulfilling what retirees need in reaching their nest egg, the new approach is to think about what you want out of the rest of your life, Kadlec explains. This approach, now being adopted by Merrill Lynch, is to let the finances set up around the experiences because we have to use what we have right now to accomplish most of what it is we really want. "We need to stop thinking about that I need a million dollars or I need to retire at 67," because it's a lot more fluid today, he states.
Merrill Lynch is asking people to really think about what's important to them and then to figure out how much of that they can get with what they have. "We really haven't thought about retirement that way in the past," Kadlec says. In this environment you get a "reach for yield," with people taking higher risks, which for some, has worked but Kadlec considers that risky and could come back to haunt people.
"There's still a lot of reckoning to come and it really does help if you can peel it back to what's most important to you," by picking your life priorities and focusing on those, Kadlec says.
Dan Kadlec is a journalist and author and to read more about this new approach to retirement, click here. Dan spoke with Retirement News Today during this interview, providing online retirement video news content. Retirement News Today is a featured network of Sequence Media Group.