I get all worked up every time I read another one of the same articles on retirement. Save 1x your income by 30, 5x by 50, 12x by 67, yadda yadda ya. I really hate the way the industry thinks. As if anyone in his or her twenties is going to stay with the same career - let alone the same job - earning the same income consistently for 30 or 40 years seems silly, doesn't it?

We're Millennials! We don't play by those rules. So what does that mean when it comes to our retirements? Should we bother saving anything if we're going to start the next Facebook? What if we're going to go back to school in 5 years and land a six figure job?

If you're anything like me, you've probably tried one career and are on your second or third by now. Whether you went to business school and started fresh like I did or switched gears after 5-10 years in banking, consulting, or big law, one thing is for certain: you are unique. So why do so many financial advisors recommend saving a percentage of your income every year, or working a certain number of years?

Instead, I recommend taking a holistic view of your expected earnings over your lifetime. Do you plan to work in Corporate America for a decade and then take the next decade off to raise kids? Better save as much as possible while you can. Maybe you're going into business for yourself and can forecast income growth of 10% per year for the next 20 years - so it'll be more important to start small but ramp up savings consistently.

Consider, too, your lifetime expenses. Do you plan to have kids? Do you want to go back to school? Start a business in your 50's? Retire early?

Once you've considered the big picture, you'll have a much better idea of what you need to do today.

 You’d be surprised how many smart people don’t have a financial plan. Don’t be one of them!

The more you earn, the easier it is to save. Unless, of course, you spend it all. The key is to create a place for your money before you earn it, before you even think about ways to spend it.

Envision you earned $1M this week. Now that’d be nice, right? Really think about it. Your company goes public and everyone gets a huge bonus, you win 5 numbers in the Powerball, you discover that old stamp collection your great uncle left you is worth a fortune. It doesn’t matter where it comes from – the point is, you now have $1M. What would you do with it?

If you’re thinking about which loans you’d pay off tomorrow, what car or clothes you’d buy, or how much you’d give your parents for their dream vacation, keep thinking. We want to figure out where you’d keep the cash if you had to keep it.

Think of things like 401(k)s, IRAs, Roth IRAs, taxable investment accounts, high yield savings accounts, checking accounts. See where we’re going with this?

Now divvy up that $1M – you might want $150k in the 401(k), $550k in the IRA, $200k in the taxable account, $90k in savings and $10k in checking, for example. (It’s hypothetical, so let’s not get hung up on contribution limits.) Visualize those accounts.

Imagine checking them every month, watching them compound and grow. Imagine sleeping well every night knowing you have enough cash on hand to last several years. Imagine feeling proud of yourself for having the discipline to earn and preserve that kind of wealth.

Ok, back to reality. You’re probably at least a few years from that kind of cash. But keep the end goal in mind, because it’s only a matter of time before you get there. That visual is a rough cut of your financial goals. You know which accounts to open, which ones to fund. $400k in an investment account won’t happen overnight, but every bonus, commission, or raise could help get you there. Once the account is open and growing, you’ll feel compelled to add to it over the years.

Of course, the $1M target is arbitrary – you could start with an even more ambitious goal – maybe $5M – or something more reasonable, like $100k. The point is, visualizing that stretch goal will help things along.

When you have a place to put future earnings, you’ll want to put them there.

-MMM