Many people have asked me how much they should be saving in order to pay for their children's college, pay off their mortgage, cover annual expenses, and eventually to retire. Some tend to think there is a standard magic percentage of annual income that should be saved which accomplishes their goals.
Yet, I always struggle to answer the question until there is a customized plan for that specific person, with those specific goals, and with their specific lifestyle.
This article provides a case study which outlines that people can actually be saving too much creating false cash flow burdens making investors unnecessarily stressed. In order to avoid this situation, you can work with an advisor and pinpoint exactly what you need to save in order to accomplish your goals. By understanding what you need your advisor can help create a plan on how to get there in a way that is comfortable for you and allows you to live the life you want.
While I would never argue against savings, I would simply state that you should understand how much you need and how you can use your savings to accomplish your financial goals. Advisors can provide a roadmap for success that empowers you and gives you the opportunity for informed decision making. You only have this one life and you deserve to live it the way you want. Talk with an advisor, figure out what you need, and start your plan.
Caroline Hill, Financial Advisor
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).