The secret to proper retirement planning is to start as early as possible. Just like you mortgage the longer the time to save the less per month you have to save. You are the one who must decide how you want to live after you are no longer able to work.

— Inflation assumption: 4.5 percent (higher than where we are today, but most economists believe that inflation is headed up in the coming years).– Rate of investment return both before and after retirement: Consider your risk tolerance and err on the side of being conservative. If you’re stuck, use 4-5 percent. Obviously, if you use a higher rate of return, the calculator will ultimately determine that you have to save a smaller amount. After our Great Recessionand financial crash, I probably don’t have to tell you that higher return assumptions may not always work out as planned.– Life Expectancy — if you are younger than 50, use 95; if you’re older than 50, use 90. If you want a closer estimate, go to www.livingto100.com and use their Life Expectancy Calculator.

Saving for retirement is just the opposite of paying your mortgage, The longer the mortgage the lower the payment, obvious right? When saving for retirement the longer the savings time the lower the required savings rate. Many saving for retirement delay the start of their savings plan and then try to make up for it by taking additional risk. It might work but it’s doubtful.

Please comment or call to discuss how this affects you and your employees.