This is the time of year where a lot of folks review their portfolios to make sure they are on track for whatever it is they are saving for. This is probably a good idea.
One word of warning would be if you use a retirement planning calculator to tell you how much you will have or how much you need to save or anything else. I plugged our numbers into two calculators yesterday and got results that made no sense. I assumed 7% average growth in assets and 4% inflation. So slower growth and higher inflation than we’ve had and both results were too encouraging. One calculator said I didn’t have to save anymore money and the other said that with my savings plans my assets will be worth a gajillion dollars.
I’m not that old nor am I that wealthy. The idea that someone my age could stop squirreling away is ludicrous. I am a huge believer in giving yourself as many options as you can. Where saving and planning are concerned this means socking away as much as you possibly can, one way or another. For example, an investor that saved 50% more than needed with a plan of retiring in 2000 could have better handled a 25% hit to a properly diversified portfolio than if the amount saved was only exactly what was projected as the magic number 20 years earlier.
My example is flawed, but its the best I could come up with early on a Saturday and it does make the point.