It’s an old negotiation adage: the first person to speak, loses. Once a number is stated, the negotiation is anchored and then haggling moves from there. You may have noticed it in your own life. Once someone says a number, it tends to be where our mind sticks. So, what does that mean?
If you’ve looked at putting money away in tax-favored accounts, then you know that many types of accounts have maximum contribution amounts, per year, which are mandated by tax laws. The danger with this is that folks can home in on the maximum, then not save beyond the cut-off. But, is that enough?
Remember, the maximum contribution limits are just cut-off points for that particular type of account. Don’t necessarily think that just because you’re contributing the maximum to a retirement plan, then you’re all set for your retirement. Take the time to speak to a financial planner about your retirement, and to do the necessary planning.
Just because it’s a number, doesn’t mean it’s the right number for you.