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Chapter 4. Your Best Chance at Retiremen... > What Do You Have? - Pg. 44

Your Best Chance at Retirement Is Your 401(k) 44 What Do You Want? This is simply a statement of your goals, your dreams, or your vision of the future. The single biggest reason why people fail to reach their goals is because they have none. As Yogi Berra said, "If you don't know where you're going, you'll end up somewhere else!" Where many people go wrong is they articulate their wishes, instead of their goals. Here are some common wishes: · · · · · · I want a lot of money when I retire. I want to live comfortably. I want a new house and car. I want to send my kids to college. I want a high rate of return on my investments. I want to win the lottery. These things are all nice to have, but you'll never get them unless you are more specific. Take retirement, for example. When you know at what age you would like to retire and how much money you will need, then you can establish a plan to get there. How much money will you need in retirement?Our advice is that you plan on replacing at least 75 to 85 percent of what you earn today (i.e., your household income). When we're retired, most of us will spend more money on entertainment, recreation, travel, and medical expenses. Other expen- ditures will go down, like mortgage, Social Security payments, and personal savings. You can figure out your own scenario. All you need to do is determine where you are spending money today and which expenses will go up or down when you are retired. We have given you blank worksheets in Appendix A so you can establish your vision of the future and quantify this vision (in