The Simple Numbers That Reveal Your Retirement Readiness

0:00What if the scariest part of your finances isn't the numbers themselves, it's just knowing what they are. Today we're talking about facing your reality with money, with compassion, and I promise it's not as bad as you think.

0:22Hey there and welcome to Wealthy After 40. I'm Dalene Higgins, your podcast host and financial coach. If you're a Gen X woman or couple who's worried about retirement, maybe you feel like you're starting late or don't have enough saved, you're in the right place. This show is all about ditching the financial stress and creating a retirement plan that works for your life now and later. So grab your favorite drink, settle in, and let's figure this out together.

1:00Welcome to part one of part four. If you missed last week, I did an overreview of the four phases of my framework that I walk clients through. We are diving deeper into phase one today, which is your money reality. So what does that mean? And why does it come first? First, you can't make changes or create differences, right? Build a plan on guesses, right? There's a lot of people who are like, I'm not sure. I think this, well, it's about this, right? This is about really diving into what is not truth, but what is the actual numbers? What are they? What do they mean? And this is the difference between what you fear and, like I said, what is truth.

1:56Because we're fearing an unknown. To get rid of that fear, we have to create a known. Now, I know that's hard and difficult, as money is challenging. Money is really challenging. I have thought a lot lately about talking about money. And I've talked about this before. And whenever I go on a podcast and do a interview, I always say people are more willing to talk about sex than they are about money. Even with our kids, right? We like, did you have the birds and the bees talk? Well, did you have the money talk? It's such a space that needs so much more to be talked about. And I've even shared in way earlier episodes how to talk about money without talking about the actual numbers.

2:49for you to talk to me, I don't really need to know how much you make, right? I don't need to know like where you love to spend your money. Although that's helpful as a coach, but to talk in general, what are your struggles? What are your challenges? What's worked for you? What hasn't worked for you? These are all simple things. And I think if you think about that, as you go into your work on defining your reality, you come in with compassion, not judgment, right? That's going to change everything. It just, you have to understand what is truly going on. I've had individuals say, I don't make enough money and I show them$600 in their bank account or in their budget leftover, which is in their bank account.

3:39And just working through a lot of these thoughts as they come to me. And then we do this first step. This first step is crucial, but it is the hardest. It is the hardest for most individuals. Second, a lot of people are like, what am I actually looking for or looking at? Let's dive into that. All right. So the very first thing you can look at without having to get into all of the nitty gritties, right? You're not a numbers person, probably, like I am a numbers nerd. And if you are, you can dial in even more. So these are for those of you who are like, I just want to know a number and what it means.

4:22As I had a client ask me one time, I don't know what to do with my numbers. So the first one you're going to look at is income, meaning how much money you make. And this is going to be a gross pay versus your expenses. and truly what that is, the bills and the spending you're doing, are you living on less than you make? And I know some of you are like, oh, I hate that statement. But honestly, right there, you can get a reality. Now, what are you scared about? And then you have to unpack that even more. But if your income is greater than expenses, check mark, you're doing good, right? You're doing okay.

5:07Now, if expenses are more than income, you've got a little bit of work, but it doesn't mean that you were bad, right? It just means you're out of balance. All right, another number you can look at and a little calculation I'm going to give you is your savings rate. How much are you contributing to overall savings? So when I say overall, I'm talking your sinking fund, your emergency funds, your vacation fund, your retirement, your HSA, even if you still have an FSA, all of those things, those are all savings. Savings just means I'm putting it aside to spend in the future. I think that's helpful for a lot of people.

5:52They're like, it's so hard to save. You're going to spend it later. But what is your savings rate? So add up all of those amounts that I just mentioned, and I want you to divide by your gross pay. That is going to give you a percentage. Again, quick little math. You're going to do it on the calculator. You're going to move your decimal point two spots to the right, and hopefully you're in double digits. If you're not in double digits, increase your savings rate. This is your focus. This is where you want to make a change. All right, the next one is going to be looking at your debt to income ratio.

6:34Mostly this is just for lenders, mortgage lenders, credit card. They look at this to see how risky are you if we are to give you some more money to pay us back. The higher that number, the more risky you are, the less it shows that you are managing your debt. Now, if you remember, I'm not opposed to debt. I want everybody to be able to manage their debt. There's two different things to that. So your debt to income ratio, you want to be less than 36%. Add up all your debt payments, divide by your gross pay again, and this is going to give your ratio. If you are above 44%, this is going to be your focus.

7:22You're going to want to pay this down as quickly as possible, right? As quickly as possible, at least to 36 % or lower. All right. Another number you're wanting to look at is your sinking funds, emergency funds, in the sense of that build your stability. Now, we just talked about debt. If you're like, I do have a lot of debt, but I can't get it go away. It may be because you're overlooking sinking funds and emergency funds. Now, why am I saying both of those? Whichever works for you, for savings to have at your fingertips, not in a retirement account, is what we truly want. And we want to designate these for those times when life happens.

8:13The car repair, the hospital visit, the furnace goes out, any of those types of things, instead of having to turn to a personal loan, a credit card, a HELOC, right? All of those things are going to increase our debt to income ratio. So if we can offset with our sinking funds and emergency funds, we have just increased our stability. All right. So those are just a few things to help you start looking at your money reality. Really focusing into where do you stand to give you a couple of action steps. In my retirement ready planning workshop, we're doing these things, but we're diving in deeper. We're adding all of the numbers.

8:58We're using what I am calling a one page financial snapshot. It is one page. It simplifies. It is going to take everything that you have done. So all of your efforts, they're on the left side of this spreadsheet, and we're going to fill in the numbers. There's not too many. It's not too hard. Then we're going to look at it with what are your results? What have your efforts created? And of those, where are your biggest gaps? Once we help you understand how to go from here's your numbers, here's the results, then here's your gaps, here's your action steps. So again, if you're interested in diving into that, my retirement ready planning workshop is being held four times in 2026, just in case you're listening to this later than January, where we are diving into all of this information, you get hands on, you get personal time with me, all of that to help you know your money reality, which is phase one.

10:04And it changes your perception of and getting rid of that little voice from, I hope we're on track to, you know what, I know where I stand. I know exactly what to do. And I can just put my head down and start doing that. Sometimes that's all we want. There's no more guessing about whether you should pay off debt or increase your savings to retirement. We cover that in this workshop. We cover this in phase one. So if you don't want to wait for the workshop, please reach out to me. Retirement ready Q &A call. Let's talk about what coaching will look like for you. That's what these phases are. I can dive in deeper to your personal situation, right?

10:46Because I know that some of you are like, but my situation is different. Mine is and everybody's is. And I'm going to acknowledge that for you. Yes. Everybody's situation is different. So if you're thinking that and your gut's not going to help me, I would love for you to jump on a call. Let's talk about why or why not this is going to work for you. Because I want you to get rid of that thought of, am I on track? Have I done enough? And that little voice, no more blind hope. You actually have the information at your fingertips. You actually know what your efforts, which we know life has happened.

11:28We know we've all paused our retirement savings. We know we've all got it back. We know, we know, we know, right? I did the same thing. You're not alone. You're not alone. But what is going to happen in phase one is you're going to find out you're further along than you thought. But 99 % sure of this, as most of my clients, those with the biggest worries, those with the biggest concerns, they are doing better than they thought. And then discovering the one thing holding you back isn't what you thought. Again, remember early in the episode, I talked about you're focused on one problem, you think it's one problem and you might be directing actions towards the wrong place.

12:19And the final thing you'll learn in phase one is that the solution is simpler than you imagined. And you're like, well, you're a numbers person. It's simple for you. I would love to help you make it simple because once you get everything rounded up, which next episode we're talking about systems, That's the next step here. That's how you make this simple, right? Life just becomes life. And we know life is going to be life-y, but let's not let money make that more problematic than it should. All right. So action steps, which we talked about them up above. All right. Your action step for today's episode is to calculate your savings rate.

13:11You've heard me talk about it before. I love this rate. If you're like, I don't love it, join me in the workshop. We'll give you some more numbers so that you can find something you love. But what I want you to do is take your monthly savings contribution amounts total, right? So if you're$1 ,500,$500,$200, whatever it is, divide by your monthly gross pay. Again, calculator, move the decimal over two spots. So if you have a zero, you're a single. If you have two numbers, you're a double. And that's what we want is at least in the double digits. And if you're not in the double digits, what can you do to increase this by 1 % this month?

13:58Take your gross pay times it by 0.01. What is that number? How can you find that much money to put towards savings? Retirement, your liquid savings, which means you have access to it. It's not tied up in a retirement account, What can you do to increase this by 1 % this month? Even if you're in double digits, maybe not too high, you can also do this action step. 1 % is pretty small. 1 % I think is something that anybody can do on the reg, meaning once a month, once a quarter, and really not to stretch it out though, but once a year. All right, so as I said, the next episode is going to talk about building systems that make money easy, make it simple, and that it will make budgeting stop feeling like a punishment.

14:58So if you're ready for that, if you've been struggling as a budgeter, I hope you will join me next week. But remember that this journey is about clarity and not perfection. So I hope this episode was helpful in understanding why you need to determine your starting point. That is your money reality. And if you have any questions, book that retirement ready Q &A call, please. Let's talk about your specific specialized situation to see how this can support you. We'll see you next episode. Thanks for tuning in. I hope today's episode helped you feel a little clearer and more confident about your money and reminded you that progress doesn't have to feel overwhelming.

15:40If this episode was helpful, I'd love it if you followed the show, left a quick review, or shared it with another Gen Xer who could use this kind of support. And if you're ready to stop guessing and want clarity around what to focus on next, I invite you to book a free financial clarity call at elevatefinances.us backslash clarity. And remember, retirement isn't just a dream, it's a plan. Let's make it possible together.