Retirement planning can be completely overwhelming. There is so much uncertainty and even more voices telling you what to do. How much do you need to cover your expenses in retirement? What will be the rate of inflation for the next 20 years? Will my money be worthless? Am I saving enough? Am I investing in the right thing? The questions go on and on. When you stop to think about how complex retirement planning is, it’s no wonder why people don’t do it.

Considering that retirement is probably 30 years away for my wife and I, there are nights when I go to sleep feeling completely lost when it comes to planning for retirement. Yet, there are also moments when I feel like we have accomplished a lot in just a few years, especially when I hear of how many of my peers haven’t even started thinking about retirement.

retirement plan

Because of the vast complexity of retirement, a popular response is to simplify it as much as possible. Many people, young adults included, just want to be told what to do. It’s hard to know everything and when you are young, there is even more that you don’t know. In many ways, it would be helpful to get a well-laid-out plan from an experienced investor or better yet, a early retiree. While it would be beneficial, I think being dictated what to do would be a complete disservice, and here’s why.

Why You Need Your Own Retirement Plan

There are many reasons why you need to create your own retirement plan. Sure, it may be difficult to decipher many of the complex variables, but it is extremely important for these reasons.

Everyone’s Finances are Different

Whether you want to admit it or not, everyone’s finances are different. Rarely do two families annual income line up. And I would wager that even more rarely, if ever, do two families make and spend the same amount each year. The very simple truth is that we make hundreds of decisions about where to spend the money that we earn. The money designated for retirement therefore depends upon how much you make. Someone who has $100,000 to invest for their retirement each year is going to do so differently than someone who has $10,000. Simplifying your retirement plan to a simplistic percentage or types of investments is just that: too simplistic. Let me put it this way: it’s like trying to use the same key to unlock your neighbor’s door. Everyone’s financial situation is different – it’s as simple as that.

People Give Bad Advice

Another reason why you should take control of your own retirement plan is because everyone gives bad advice now and again. They may not mean to, but it does happen. For example, a few months ago I was really on a real estate kick and got some bad advice that I ignored. I desperately wanted to invest in real estate now while the market was ripe. I didn’t have enough for a down payment, but I had found a 3-plex that would produce more than enough income to cover the mortgage payment. My wife and I were starting to have a surplus of income, so I began to think about how we could afford to take on this investment. I talked to my dad about it, asking if there was any way to buy the property without a down payment. He was supportive and proceeded to tell me ways I could take the leap. It was nice to hear affirmation, but now that I look back on that, I realize how unprepared I was to take on a huge project like that. Of course, I wasn’t anywhere close to pulling the trigger on it, but if circumstances would have been different, bad advice could have a huge effect on my finances.

You Need to Take Ownership in YOUR Retirement

The last and perhaps most important point that I want to make is that you need to personalize your retirement plan to fit your needs because it is your retirement that you are preparing for. It’s not just a minor issue, like selecting which ice cream flavor you are going to choose. The decisions you make now will directly influence whether or not you will be able to survive when you are in your retirement years. It could mean the difference between eating ramen when you are 80, or steak. Following someone else’s plan may be great advice, but you will never be as motivated to prepare for retirement as you are when you create your own plan. By making it your own, you become that much more serious about following it.

Developing your own retirement plan is something that takes time and patience. It’s something that will continue to develop over time, and that’s okay. It’s a good thing to make slight modifications as time continues. It’s natural. But, the two most important things to remember are: 1, start preparing for retirement yesterday AND 2, Make it your own.