In Order to Get There We Need to Know Where We Are Going: Establishing Financial Goals Informs Successful Savings and Investment Plans

Abstract

Perhaps the reason many of us don’t identify our financial goals is because the process is downright scary. We read predictions that college tuition will soon reach $100,000 per year, hear warnings that we will need $1 million or much more to support our retirement lifestyle, and entertain speculation that government easing will reduce the value of the dollar and eventually devour the majority of our savings. Don’t count on Social Security if you are under 55, we are also told, because the trust fund is running out of money. So when it comes time to sit down and put pencil to paper, we freeze. The task is too big; the savings required, seemingly insurmountable. We’ll have to worry about that tomorrow. Then suddenly it is tomorrow and the kids are heading off to college with a backpack full of loans and we are left wondering how we will manage to retire, if at all. The time to plan and save is always now.