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Chapter 2. Saving for Retirement > Don't Get Discouraged

Don't Get Discouraged

Don't let the numbers in the tables frighten you too much. Some element of fear can be a great motivator, but too much fear can paralyze you. Look at your own situation and use Retirement Countdown to help you with the step-by-step process of breaking your goals down into digestible pieces. To do this, we'll make extensive use of Goal Oriented Retirement Planning (GORP). If you use GORP to help you define and maintain your goals, you'll be able to modify a goal so that you can still gain value from achieving the goal, albeit under different assumptions.

Let's say Greg and Connie Glover want to take two trips each year in retirement. As they use GORP, they will define a cost for those vacations in today's dollars then inflate those dollars based on the number of years until they retire. Finally, they will bring that result back to a lump sum amount or an annual amount required to provide for that goal. In making their vacation assumptions, they will have to look at how they are spending their vacation to quantify the cost. If the goal costs too much money, they can go back to their assumption and make changes to reduce the cost and hence the amount they will have to save. Remember that they can modify the goal at any time should their circumstances change.


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