I have a confession. I am not much of a skier. Occasionally I have been known to don some cross country skis, but more often I have been known to wear snow shoes. That being said, a couple of times I have participated in alpine skiing.

Perhaps many of you wondering by know, why is a personal finance guy talking about skiing? Summer is almost here!

In previous blog posts, I have talked about “withdrawal rates” which refers to how much one can plan on withdrawing from one’s retirement portfolio without having to worry too much about the money running out. I tend to recommend to my clients between 3-4% of their portfolio per year as a good rule of thumb.

It has been said that planning for/going into retirement is a lot like going alpine skiing. You do not hear about many people suffering that much as they go up the hill (the financial equivalent of building up assets to prepare for the ride of your life), but you may hear a fair amount about people doing a face plant when they got off of the ski lift (the financial equivalent of the market dropping suddenly when one first retires and has nowhere else to draw money), or people breaking a leg or something else and calling in for the medics, etc. (which may be closer to the financial equivalent of having to make unprepared drastic cuts to one’s lifestyle in retirement or having to more in with family or have family pay the bills because you can no longer support yourself).

Many people are surprised of the amount that they have to save in order to sustainably support the lifestyle to which they have grown accustomed. This may be mitigated by many different factors which may or may not include: changing one’s lifestyle, having investments that provide a steady stream of income for you, increasing one’s savings, planning on working while in retirement.

While all of these options may seem feasible, in some cases the final option is not. In fact there are many workers who find that either due to health issues or other reasons, that they end up working for less long of a period than they initially intended. This only serves to emphasize the importance of saving up as soon as possible so one does not find oneself getting off on the double-black diamond rated slope of retirement as opposed to the bunny slope of retirement. I will suggest that though excitement and challenge can be fun at times, few people actually want to navigate a challenging retirement financially.

The moral of the story when it relates to retirement is that you need to save as much as you can as early as you can because there is too much uncertainty in the slippery slope of life. Assuming that you have the option to continue working, check with a financial advisor to make sure that you have enough saved for a pleasant retirement.

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