I like money. There, I just wanted to get that off my chest.

Well, there’s actually a little more than that. My approach to handling money, or more specifically the money set aside for retirement has recently changed pretty radically. Formerly I treated my retirement plan like, say, cleavage. Yeah sure let’s go with that. That is to say, it’s okay to steal a glance every now and again but not something you should fixate on despite urges to the contrary.

That was basically my plan. Put some amount in a retirement account, let it do its thing and when you retire hopefully something good happened. Like a time capsule you open up years later and hope it’s not filled with Pogs. I’d also heard that you should try to save 15% of your income which, had I actually taken to heart as I began my professional career, might have made a difference. Further I’ve never been what you’d call frugal, nor was I a spendthrift. I just didn’t give a lot of thought to a financial plan apart from throw a little money over your shoulder into a retirement account and try to pay down debt whenever possible. I like simple and stress free, but now realize that perhaps I was just postponing the eventual complexity and stress when there’s probably a happy medium assuming it’s addressed with enough time.

So, we recently reached a significant financial milestone and it started me thinking, you know retirement is really not that far away. I’ll be 62 in 14 years. My youngest child is 16. His birth really doesn’t seem that long ago and in less time that that I’ll be SIXTY-TWO! So this is a thing that’s going to happen and I’m starting to wonder how my (finger quotes) “plan” (finger quotes) is going to work out. I’m sure you’ll be surprised to know that, after careful deliberation, I realized that the original plan is a bit of a disaster.

I could go into detail, and in fact I may at some later date, on exactly how I plan to address this (basically this), but I wanted to just throw this out there: if you don’t have a real retirement plan and some means of tracking your progress, you really owe it to yourself to sit down and take a long hard look and attempt to formulate one. There are a number of sites out there that can help you determine first what you’ll likely need to cover annual expenses, next what you’ll need to plan on saving to cover these expenses, and also how best to put all of this together in a way that gives you the best chance at success. I’m partial to Personal Capital myself, but Betterment also has some nice tools available. I’m sure there are many others. If you provide honest and conservative estimates with regard to your financial needs the results may surprise you. You may, as we did, need to take steps to radically change your lifestyle, saving, and spending habits to get back on track.

I keep thinking about this: before I started paying attention I would have thought $1,000,000 was a lot of money. I mean it is, but it’s really not that much money when you consider that the sort of standard rule of thumb is that you should plan on drawing your retirement saving down by no more than 4% annually. That means if you want to be able to count on paying yourself $50,000 a year (which is less than the average household income) then you should plan on a nest egg totaling $1,250,000! This was a bit of a revelation to me. I’d simply not given it much thought. But now I realize that I would no longer categorize a millionaire as super wealthy. It’s really what every single household needs to work towards if they want to go into retirement with any degree of comfort.