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Dont Set Goals. Set SMART Goals.

Have you ever set a goal and wondered why, despite your hard efforts and motivated attitude, you struggled to achieve it? That might be because the goal didn’t have all the elements of a S.M.A.R.T. goal.

What are S.M.A.R.T. goals?

S.M.A.R.T. is an acronym that stands for Specific, Measurable, Attainable, Relevant, and Timely. When a goal is clearly defined and incorporates all these criteria, you’re much more likely to stay on track and achieve success. This method of goal setting applies to both personal goals as well as large business goals for an entire organization.

S – Specific

One of the keys to achievable goals is specificity. A specific goal should answer the five “W” Questions:

1. Who: Is there anyone else besides yourself involved in this goal? This is important if the goal applies to an entire group or team

2. What: What exactly are you trying to accomplish. Detail is very important here.

3. When: What is the time by which you want to achieve the goal? This will go more into detail for Time-Bound in SMART.

4. Where: Where does the goal take place? This isn’t always relevant, especially for personal goals, but if the goal pertains to a certain location, it needs to be mentioned.

5. Why: What is the reason for setting this goal?

For many individuals, planning for retirement is one of their primary goals; However, merely stating that you want to retire isn’t a well-defined goal. Let’s take a look at a hypothetical example for a couple, Joe and Susan Smith;

Joe and Susan plan to retire in January of 2025 at Joe’s age of 62 and Susan’s age of 61. In order to maintain their desired lifestyle, they will need an after-tax income of $70,000 per year. In addition to their regular living expenses, they enjoy traveling and plan on spending $10,000 per year for the first 10 years of their retirement. Above and beyond their living and travel expenses, they’ll need an additional $10,000 per year to cover health insurance.

M – Measurable

Performance measures are essential for determining a goal’s progress. Metrics tell you if you’re on the right track for meeting your target. This requires you determine what will be your indicator for measuring progress.

For our clients Joe and Susan, “Measuring” their goal would include how much they need to have saved by the time they retire. How much will they save and into what types of accounts? In addition, what other sources of income will they receive, i.e. Social Security, Pension?

A – Achievable

We’re often told the sky is the limit, but successful goals need to be attainable. Setting goals beyond reach can have you easily feeling discouraged because you weren’t able to achieve the impossible. This shouldn’t undermine the importance of big dreaming, but your goal should be both challenging and realistic. Ask yourself whether you have the resources needed to accomplish the goal. If not, determine what’s missing.

For example, Does Joe and Susan’s cash flow allow them to save the amount necessary to meet their accumulation goal? Are the rate of returns targets realistic?

R – Relevant

We don’t just set goals for the sake of setting them. A relevant goal needs to align with you or your company’s overall goals. You need to determine the importance of the goal and the benefit it will provide to you, your team, or organization. When a goal has relevancy, everyone is able to more easily understand the bigger picture.

For Joe and Susan, they will need to decide how important their retirement goal is to them. Are they willing to make sacrifices today to allow them to save enough to achieve this goal? How will saving toward this goal affect other financial goals they may have?

T – Timely

Finally, a goal must be time-bound. It is imperative that a goal has a deadline because without one in place, procrastination is likely to occur. If a goal applies to a team setting, a timeframe keeps everyone on the same pace as you work towards reaching the target.

For Joe and Susan, their goal may include retiring at a specific age or year. A current savings goal may include fully funding their employer sponsored retirement plans for the calendar year or funding their Roth IRA’s by the end of the year.

A Financial Advisor can be instrumental in establishing SMART Goals. He/She can facilitate a discussion and help you define your goals, develop a holistic plan to achieve them, and measure your progress during ongoing financial reviews. Regardless of what your financial goals are, establishing them now will lend you more time to begin working towards them.


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