While many tech professionals benefit from higher salary ranges and generous compensation packages, they often do not have a holistic strategy for achieving their long-term goals. So what can you do to better prepare yourself, and to start thinking strategically about directing the right amount of compensation toward retirement?
Finding your number
To get started, we recommend determining the answer to this question: How much would you need on an annual basis in order to maintain your current lifestyle in retirement?
{As an example, with an estimated 4% distribution rate, someone may need to save and actively manage roughly $2 MM in assets to maintain a lifestyle of 80K in annual expenses.}
Then, determine how much you would realistically need to put aside each year to reach that number.
Finding the right balance
A strategy that balances the optimal level of savings and allocated investments can help you ensure that your hard work lasts throughout your lifetime, in retirement and beyond.
Saving or investing too little now can jeopardize your future once you retire. Similarly, depending on too much in cash or investing without a coordinated allocation strategy can prevent you from taking advantage of all of your potential opportunities.
Finding room for evolution of your strategy
If you’re already feeling confident about your strategy, have you taken into account all the different variables for the next five, ten, fifteen years and beyond? For example, you may want to make a career shift, purchase a second home, or factor in education expenses for your family. These events may impact how much you put away during those time periods. Allow yourself room to make adjustments as needed—mapping out an investment strategy that can evolve as your personal life changes is essential to long-term financial independence.
No matter what your financial landscape looks like now, there is always room to improve (or create) your long-term strategy. Don’t know where to start, or want help determining if you’re already in a good place? Let’s discuss!
Are you a tech professional? Take our quiz to find out if now is the time to start working with a financial advisor.
