The Moving Goalposts of Retirement
Finding the Balance between a Number and Long-term Happiness
About ten years ago, I began advising a couple in their mid-fifties who had one clear goal:
Retire as millionaires by the age of 60.
It was more than just a financial milestone for them; it was a symbol of success. No one in their family had ever achieved that. The husband is a software engineer, the wife, a nurse – good jobs but not high income. They live modestly and prioritize their time.
In the initial stages, I laid out the path to their million-dollar goal and the kind of lifestyle it could sustain post-retirement. They agreed to the plan, and things progressed smoothly.
But then, life happened.
A promotion led to a new car. A modest inheritance funded a home extension. And while they did achieve their million-dollar target, new needs arose that drastically shifted their financial focus.
Their elder daughter got engaged, and they wanted to fund the wedding. They also planned to buy a condo in California to be near her. Their younger son enrolled in medical school, and they wanted to help. Plus, they had dreams of traveling in retirement.
These new commitments threw their initial plan off track and pushed their retirement age from 60 to 67.
Despite the stress, we explored alternatives. They invested in a timeshare instead of buying a condo outright. They took advantage of tax-advantaged college funds for their son. And they pushed back travel plans.
They retired at 65, a little later than planned. But that’s life.
When the Target Moves
Their story illustrates an important lesson about setting retirement goals: don’t fixate on a number, but what brings you fulfillment and peace of mind.
The number is irrelevant once you identify these intangibles.
A few years back, I had another client who believed reaching a certain dollar amount would bring happiness. When they hit that number five years later, they didn’t feel the triumph they expected. They had new objectives and a higher financial target.
This scenario repeats itself more often than you’d think. As lives evolve, so do goals. We achieve one financial milestone only to set our sights on a bigger one. We aren’t satisfied, like we thought we would be.
So, we tweak our goals, and often our retirement age shifts as well.
Is Your Initial Number Enough?
No matter your income bracket, it’s common to feel like your initial number is not enough. Once we hit the target, circumstances change, or maybe our perspective changes. Some of this is fear-based—nobody likes to see their savings going down rather than up, even though that is exactly why the money was saved in the first place.
Financial fulfillment happens when we feel in control of our finances, using them to achieve what we truly want in life. And that last part is key – we have to dig deeper internally to decide what we actually want:
• Is it more time than we have today? If so, why?
• What would we do with that time and why will that make us happy?
• Do we have a past time in life that can confirm that we were deeply happy from it?
Begin with the End in Mind
You’ve likely heard of the book The Seven Habits of Highly Effective People. One habit the author, Steven Covey, encourages people to develop is to “Begin with the End in Mind.” Covey challenges people further: “If you were to pass away today, what do you want others to say about you during your funeral?”
This question may help you identify the legacy you want to have. More specifically, it might help you identify how much money is truly enough.
If spending more time with your loved ones is your priority, for instance, then maybe you don’t need to keep working “just five more years” to beef up your retirement account. Maybe you have enough—and what’s more important is retiring while you still have time to invest in the relationships that matter most.
Correlated to this idea is: “If money were no issue, what would you be doing every day and why is that important to you?” Or, “If you had one year to live, what would change in what you are doing now?”
In my experience, the answer to these questions is rarely, “I wish I would have worked longer and saved more.”
One of my 90-year-old clients looked back on his life. He said he wishes he could tell his 50-year-old self to not fear so much. To take more risks. To not worry about the money as much as about the living. “Life is too short to worry all the time,” he said.
It’s helpful to remember that the future is unknown–we overestimate what we can do in one year and underestimate what we can do in ten. As you identify your retirement goals and they shift, it’s important to ask, “Am I shifting my goal because I’m afraid? In shifting my goal am I compromising my values?”
If we are honest about our true desires—envisioning our dream retirement and conquering our fears—we can create a life that’s not just about the numbers but one that’s purposeful and fulfilling.