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Personal debt continues to be a major problem that plagues the people of many of the world’s developed countries as people find it harder and harder to make repayments plus interest on money they borrowed. Conventional wisdom, traditional financial planners, the media and often our families, tell us that it will take determination, good record-keeping and self-discipline to become debt-free. Certainly, to become debt-free initially, maybe these qualities, alone, can go the distance. But they actually fall short for those wanting to remain debt-free over the long-term. That’s another story altogether.

Becoming Debt-Free is Not Staying Debt-Free

Without context (background) the daily effort needed to remain debt-free erodes over time. Eventually and perhaps gradually, many families and individuals, who, having worked hard to become debt-free, lose their resolve. Credit use begins and debt creeps back into their lives. At some point, they may find themselves back where they started like those on yo-yo diets.

Pretty much across the board right now, our finances are a mess. The federal government came within a hair’s breadth of defaulting on its credit obligations. (That was more a matter of congressional mismanagement than it was a lack of assets, but it was clearly fiscal irresponsibility nevertheless.) And now, to try and point the economy in the right direction and get it back on track, our fearless (fearful?) leaders are getting ready to spend another couple hundred billion dollars of money we don’t have.

Of course, the hemorrhaging of federal cash continues unabated through all of this while we spend upwards of $20 billion every month to pay for two wars that are now 10 years old, the longest we’ve ever been engaged in a war in the history of the country, let alone two of them. The finger pointing is also now ramping up as our two noble parties begin the cash intensive process of determining who should become our next fearless leader, with both camps trying to pin the blame for this mess on the guy from the other party.

The answer to “How much money will I need for retirement?” is not straightforward. You have to consider not only when you will retire, but also how you will live during retirement. Do you want to retire in 10 years or 20 years, and when you do retire, are you going to sell your house and live on a boat or buy a small piece of farmland and grow prize-winning strawberries.

Are you looking to save money to leave for your children or a charity, or spend the money you’ve spent your whole life accumulating.

Common wisdom suggests you’ll need 80% of your pre-retirement income once you retire, but this statistic is both confusing and inaccurate for the majority of those that are actually worried about their retirements. Sure, if you’ve got a forced pension you may find your needs (and options) taken care of, but for everyone else we are left with one of the most important decisions of our lives – when to stop working and enjoy the fruits of our labor.