If you research the subject of retirement at all, you’re likely to run into calculators, commercials, and articles about how to find the magic number or “nest egg” you need to save to be able to retire comfortably. As an advisor, I go through a time-value of money or retirement-income calculation with each of my clients to give them some context for how much they’ll need to save for retirement – letting them know whether they’re on track and showing them how much inflation can affect their retirement savings over a long period of time. Though it is always presented as a hypothetical number that will be affected by many factors throughout the client’s life – changing income, changing expenses, starting families, inheritances, having or paying off mortgages, tax rates, etc. – it usually provides some element of shock value for the client. Since this exercise needs to be much more in depth with clients that are actually nearing retirement, this simple exercise is usually used with younger clients. When they see that they’ll need to save $3,000,000 as their nest egg to simply retire with the same standard of living they have today, it usually motivates them to want to start saving today – as intended. However, is that the best way to motivate someone to start saving for retirement? Presenting a very lofty goal or number to a 29-year-old making $60,000 per year with all of the expensive life transitions yet to come – paying off student loans, wedding, honeymoon, buying a home, starting a family, paying for kids’ college, etc. While this “fear tactic” may work to motivate some people, there is something so impersonal about attaching a number to the retirement phase of life.

Since people are living so much longer, and assuming they are able to retire around 65, they really could have another 30 years of life without the obligation of working every day. Being able to retire comfortably and really enjoy that 30 years is, however, still a luxury only afforded to those who are able to plan accordingly. Imagine not having a major daily obligation and actually finding time for the things you’ve always been interested in. What would those activities be? While some things are relatively inexpensive – reading, gardening, hiking; others are expensive – traveling internationally, dining out, or gifting to children and grandchildren. Think of the things you would choose to fill your day with and try and quickly calculate how much it would actually cost per year to live your ideal retirement lifestyle.

Painting both sides of the story is important. The numerical side – this is how much you need to save to be able to retire – and the human side – the reason you’re saving money to retire is so you can live the life you want to when you have the time. Because, while the numbers matter a great deal in affording you the lifestyle you deserve in retirement; the other things matter too – your health, your hobbies, your family – and those things can be more motivational for some people than a pie-in-the-sky goal.

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