Wednesday, May 19, 1999

Calculating My Future

by Luciana Lopez

I think retirement calculators must be tools of Satan, designed to frustrate and annoy. Half the retirement calculators I've used tell me that I'll be eating cat food when I retire, the other half tell me I'll own Bill Gates. No in-betweens, no middle ground. It's disgustingly rich or disgustingly poor.

Of course, the emotional yo-yo this produces wreaked havoc on my nerves for awhile. Granted, I'm young to be investing, and I have lots of time to invest. Granted, I'm starting out with a decent-sized nest egg from unused college money (God bless the scholarship that got me through four years of undergrad). Granted, I'm reading up on the business pages of the Sunday Post. But it still frightens the newbie to see a supposedly reliable retirement calculator tell her she has to invest another $4000 a month to pay her expenses during retirement! Since $4000 a month is more than my current salary, that could be something of a problem.

Eventually, I realized that retirement calculators are largely a crutch. While they can be useful, they can never substitute for investing, knowledge, and awareness of what your money is doing. It's all well and good to say you've got money put away, and that the retirement calculator says it's enough -- but do you know why it's enough? Or what it's enough for? You can retire on almost nothing if you decide to live in Minnesota and watch grass grow for entertainment; it's a different story when you're thinking of that cruise in the Greek islands or the opening night theater tickets in London.

So I've sworn off those hellish tools and have instead begun monitoring my investments more closely. I'm taking a more active role in tracking my money; I learned what the expense ratio was on a mutual fund my broker recommended (thank God's it's low). I've read up on and feel more confident not only about taking other people's picks, like the Foolish Four, but about making my own choices. And when I'm retired in Tahiti, I'll raise a drink to you.

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