• Fundamental to a comprehensive financial plan is knowing what the target is or what is the amount of money needed for a person or couple to be financially independent. Sometimes we can equate retirement with financial independence, but it does not need to be the same thing. Some people do not plan to retire ever or until a much later age. Financial independence is a point where there is sufficient wealth accumulated to last for the projected life and also satisfy any transfers to heirs or philanthropic desires.
  • It is better to plan for a financial independence date rather than planning to never retire or to retire at a much later age. Life is unpredictable and even though the plan may be never to retire health and other issues can disrupt these plans and so it is better to have enough wealth accumulated at a reasonable age to then allow more flexibility around when retirement may occur.
  • Establishing an amount that is needed to be financially independent then allows us to determine how much needs to be saved on a regular basis to reach the financial independence goal.
  • Most important is to revisit this part of the plan every 6 months to a year to assess the progress towards the financial independence goal and make revisions if necessary.