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Why Is a Retirement Calculator Like a Bankruptcy Resource?

By Joseph McDaniel, Esq.

Doctors tend to retire rich, and the reason has little to do with their incomes (although, since penicillin, doctors in the United States have seen a remarkable increase in their incomes; and that may change very soon, which is sad).

But the key to a doctor's retirement success is simple; it's the doctor's time horizon that is his secret weapon.

Rock stars, on the other hand, very seldom retire rich, and it's precisely because they tend to have very short time horizons (remember that rock stars make far more dough during their careers than a doctor, and tend to spend so much that they retire dead, or dead broke, or both).

In order to get into medical school, you need great grades. Forever. It's not enough to have good grades in the last few years you were in school.

So folks who become doctors have been looking forward to going to medical school forever; and those who make it into medical school continue their forward-looking habits.

When they make it into medical school, they think about what practice will be like, and they think about their date of retirement.

And you should, too!

A long time horizon is a wonderful thing, and a powerful tool.

I would like it if you were more like the medical doctor, and less like the average rock star, because I want your story to have a happy, wealthy retirement as a long final chapter, before the epilogue with the harps and clouds and halos.

That's why I want you to track down a useful free, online retirement calculator; if you are reading this, you have thought about bankruptcy as a possible future event, but you probably haven't picked up the phone or emailed me about filing a bankruptcy.

And maybe you don't need to do so; I hope you don't need to do that, in the same way that an oncologist would really rather live in a world where he could just treat allergies, because cancer is painful, both emotionally and physically.

But if you are thinking about bankruptcy in Arizona, and trying to decide whether it makes sense for you to file a bankruptcy, one of the bankruptcy resources that isn't labeled as a bankruptcy resource is an online retirement calculator.

Here's why: if you know how much money you need to save in order to retire happily and with security, you'll know how much you need to save every month. And you'll know you either can do that because you have no high-interest unsecured debt, like credit card debt, or you'll know you can't begin seriously saving for retirement, because first you have to pay off a buncha debt that runs at 38% interest.

Got it?

Let's go at it another way: use a credit card payoff calculator first, and see how long it will take you to pay off your high interest debt. Once you do that, you'll see how long until you can pay off your credit card debt, at your current rate, and then how long until you can save enough to retire.

Simple, right?

So one way you can decide whether you really need to file a bankruptcy is to see how long it will take, barring unforeseen circumstances like a lawsuit by a friend who slipped in your foyer, or a divorce, or getting fired, or getting hit by a piece of falling Skylab, for you to start doing serious retirement saving.

If you can't possibly start saving for retirement within the next ten years, you may want to seriously examine your bankruptcy options and non-bankruptcy options, because retirement saving is important. And depending on your age, it's also urgent!

You really can't count on the equity in your house to fund your retirement, if you're like most folks, because your house has no equity, because you drained that out when you thought you were rich, the same as everybody else.

You may have drained your home equity with a home equity line of credit, or you may have gotten a couple of additional traditional mortgages; but either way, your home is no longer your retirement bank.

And don't even get me started on your investment homes, which are now a huge albatross around your neck, dragging you down into...you know, bankruptcy! 

And since you can't count on the hundreds of thousands of dollars of equity in your house to fund your retirement (because its all gone now, isn't it?), you need to start thinking seriously about saving for retirement.

And if you have a bunch of high interest debt, like credit card debt, you'll need to deal with that.

Maybe with a bankruptcy. Maybe not.

Your choice!


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Full post as published by Arizona Bankruptcy Attorney Blog on December 14, 2010 (boomark / email).