The Retirement Mirage: Why Your “Number” Isn’t Enough to Secure Your Future
Why do so many people focus on "hitting their number" as they approach retirement?
In part, I think it's because major life transitions can feel scary, and numbers can help us feel more secure. Boiling retirement down to a figure might, in some way, shrink your worries down to size and put your goals in black and white.
Unfortunately, no "magic number" is big enough or flexible enough to encompass all the variables that life will throw at you in retirement if you don’t have an effective mindset around money.
That's why, to improve your retirement readiness, I'd recommend focusing less on hitting a number and more on building up these three mindsets that can help folks take a more holistic approach to preparing for the second half of their lives.
1. Redefine "enough."
If a fixed dollar amount was really all you need to feel secure and fulfilled, then you may never stop working. There would always be a higher number to hit, another paycheck to cash.
But in the context of retirement, having "enough" money is really all about having the confidence to stop focusing on accumulating wealth and start focusing on using your wealth. Approaching retirement with this kind of abundance mindset can help you build the resilience you'll need to adapt to the various phases of retirement.
There's no one path to your "enough." Some folks might "test drive" retirement for a couple of years by scaling back their work hours and easing into life on a fixed income. Others might seek wisdom from retired friends and family members who can share things they wish they'd known before retiring. A financial advisor can also be a valuable resource for education about how a financial plan works, what kinds of mental and emotional challenges retirees typically face, and what types of contingencies folks should be prepared for, such as cycling in and out of the workforce or weathering market volatility.
2. Let in your feelings.
Hitting your retirement number might make you feel better about clocking out on your last day of work. But it's not necessarily going to make you feel better about the morning after when you wake up and ...
Do what? With whom?
Retirees often feel a little lost without work. They miss the structure, the routine, the familiar faces, the camaraderie, the responsibilities. It's not uncommon to feel a profound sense of loss at the end of your career, and even a lack of purpose going forward. These feelings can affect not only the retiree but their relationships with friends and family, especially their spouse.
Making time for personal reflection ahead of retirement can build up your "enough" and help you approach that first Monday without work with more positivity. Journal about your work experiences. Make a list of your major accomplishments. Send thank-you’s to the people who helped you achieve so many milestones over the years and reach a point where retirement is possible.
If you really feel what you're feeling, the happy and the sad, you might arrive at a place of gratitude that centers your retirement transition. You might dream up new uses for your professional skills, such as teaching, mentoring, or volunteering. You might start to appreciate the possibilities in your blank calendar for new adventures and new opportunities to learn and grow. And you might begin to feel excited to focus more of your time, energy, and money on the people and the passions that matter the most.
3. Expect and embrace change.
Numbers are fixed, but life is not. And that reality doesn't change in retirement, no matter how thorough your planning.
As you're working towards long-term goals like buying a dream home and crossing big vacation destinations off your bucket list, you'll also have to adjust your annual budget to cope with inflation, stay on top of your health and your health care coverage, decide how to help an adult child who's facing yet another financial setback, buy a new car when your old one finally breaks down.
Of course, you also might be blessed with a new grandbaby you want to spend more time with. You might discover you enjoy gardening more than golf. A need might arise in your community that calls you to service.
You can't necessarily plan for any of these inevitable ups and downs of retirement. But you can prepare for them by accepting that change will come and having a financial plan in place that gives you the flexibility to adapt while still feeling confident in your "enough."
Whether you're a long-time client or visiting our offices for the first time, numbers are never at the top of the agenda when you meet with a Keen Wealth advisor. Our comprehensive financial planning process always starts with you. Let’s look beyond your numbers and start working towards a clearer picture of what you want from retirement.
About Bill
Bill Keen is a financial advisor with over 30 years of industry experience. As the founder and CEO of Keen Wealth Advisors, a registered investment advisory firm, he focuses on providing personalized retirement planning designed to help people thrive before and during their retirement years. With a passion for educating others, Bill regularly blogs about retirement planning, hosts the podcast Keen on Retirement, and has contributed to Forbes, U.S. News and World Report, Reuters, Wall Street Journal’s Market Watch, Yahoo Finance, and other publications. Based in Overland Park, Kansas, Bill and his team work with clients throughout the greater Kansas City area and across the nation. To learn more, connect with him on LinkedIn or visit www.keenwealthadvisors.com.
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