What’s Your Number?


There used to be an ad on TV where people walked around carrying a big plastic number which represented how much they needed to save for retirement. It was impactful when thinking about how big the nest egg needs to be in order for each person to feel comfortable. Similarly, I often talk to my clients about their number in terms of how much cash cushion makes them feel that they can breathe easy. The concept of “the number” makes sense on many fronts.

That number represents our safety net, the amount that keeps us secure (as secure as we can feel in a crazy uncertain world), and makes us feel like everything will be alright. My grandparents on both sides of the family have passed away so I have seen behind the privacy veil and I know their numbers.  Those numbers were vastly different as were their lives. One lived on a safety net made of an income stream – Social Security and my grandpa’s pension – and had a very small nest egg beyond that. Life was pretty easy to figure out for them – you have this much per month PERIOD and you best save some of that monthly income because the wolf is not that far from the door. However, there was assurance that the first of the month was just around the corner.

My other grandparents lived a much more abundant life and had a much larger nest egg but no income stream beyond social security. Yes, the pot was bigger but in some ways, the uncertainty was too. The income stream had to come from the investments so those downs of the market made for queasier stomachs.

These days, pensions are going the way of the dinosaur in a lot of industries so we have to focus more on the nest egg of our future than on managing a pension income. Regardless, the biggest driver of any retirement plan is how much money you spend every month. You need a pretty small nest egg if you only spend $1,000 a month. Much more is required at $10,000 a month! That holds true regardless of the income source.

So as you think about your “number,” switch that to a monthly “need” number. What is the least amount of money that you could live on every month? What could you do without in order to make that a tiny number? Go to a “tiny house?” Not sure about that one, but it is interesting to consider. How much do we really need?

If the idea of your “nest egg” number seems daunting, flip back to that monthly need number. That is one place where smaller is definitely better and so much easier to fund!

To your financial success, now and in the future!