Retirement is far more nuanced than a number. It is a target that is dynamic and forever moving.
Often people will say that they are striving for a certain number, such as $500,000.
You don’t need an exact number for your retirement
Since becoming interested in my own finances about 7 years ago, I have moved my retirement number at least ten times. So what’s changed?
I (now we) want to have a more spendy retirement than I originally planned for
We have two kids now. They aren’t cheap
We are planning to build a house. Also not cheap
Investment returns have been better than anticipated
I no longer want to retire so early. I’d still like to work at least part time in more enjoyable work
Our spending has been a bit higher than predicted over the last few years
All these factors have meant a forever changing retirement projection. Now to the point where we are not even aiming for a specific number at the moment. We are just focused on our processes of keeping spending modest, earning as much as we can while enjoying life, and investing responsibly. We have confidence that our planning will result in us having ‘enough’, whatever that number may be.
And if it ever looks like we are at risk of running out of money we will adjust. We will spend less, we will work longer, we will downsize house. We will do whatever it takes not to run out.
The point is don’t get so laser focused on meeting an arbitrary number, or even trying to work one out. I mean how difficult is it to predict how much you will spend in your retirement? I even get wrong how much I will spend next year. Your predictions are never going to be exact.
Keep an open mind, remain flexible, and don’t obsess over working out, or even achieving, an arbitrary number.
If you need help with your personal retirement planning, then get in touch today.
The information contained on this site is the opinion of the individual author(s) based on their personal opinions, observation, research, and years of experience. The information offered by this website is general education only and is not meant to be taken as individualised financial advice, legal advice, tax advice, or any other kind of advice. You can read more of my disclaimer here