Financial advisors are often asked: "How much money do I need to retire?" Today, advisors are more apt to prepare a financial plan that determines the probability of your retirement success or failure, not a fixed dollar amount. In either case, the result of a complex analysis is articulated as a single number. We often attach great faith in this one number even though the underlying concepts may be misunderstood. We should be cautious as to how much emphasis we place on this number.
This does not mean that we should avoid engaging in retirement planning. Far from it. We must be careful, however, how we interpret the results. Properly understood, retirement planning can help us determine if we're on the right track. [Editor's note: The link is worth clicking, especially for Broadway fans.]