There’s something we see fairly regularly with people who have done a very good job saving for retirement.
The numbers say they’re fine.
We’ve accounted for spending, Social Security, taxes, healthcare, longevity and market risk. We can run different scenarios and show them that the plan has room for the things they want to do.
And they still have trouble spending the money.
I don’t think that’s irrational. If you spent 30 or 40 years training yourself to save, delay gratification and watch your accounts grow, it’s difficult to turn that off because you crossed some imaginary line called retirement.
In this week’s episode of Wisdom for Your Wisdom Years, we talked about this through the idea of the “Gap and the Gain,” a framework from Dan Sullivan and Benjamin Hardy.
The basic idea is that we tend to measure ourselves against an ideal that keeps moving rather than looking back at how far we’ve actually come.
We see a version of that financially all the time.
Someone wants to accumulate $2 million before retiring. Then they get there and $2.5 million feels safer. Eventually $3 million would feel better. Maybe they’ll retire after the election. Or after the market settles down. Or once the economy feels a little more certain.
There’s always another reason to move the line.
The problem is that somebody can be objectively successful financially and never really experience that success.
And I think spending exposes this more than almost anything else.
Imagine somebody has $2 million and takes $50,000 out of the portfolio.
Maybe it pays for a family trip. Maybe they renovate the house they plan to live in for the next 20 years. Maybe they help their children or grandchildren. Maybe they give some of it away.
Financially, the withdrawal may fit perfectly well within the plan.
Psychologically, they log into the account and see $1.95 million.
That number is lower.
For someone who has spent most of their adult life associating a rising account balance with progress, that can feel like they’re going backwards.
But life didn’t go backwards. The money did something.
That distinction matters.
I think part of retirement planning is recognizing that the definition of financial responsibility changes over time.
At 35, being responsible might mean maximizing your 401(k) and resisting unnecessary spending.
At 55, it might mean making sure you’ve accumulated enough before walking away from a career.
At 75, responsibility may look very different. It could mean protecting a surviving spouse, helping your family, giving to causes you care about, taking care of your health or spending money on experiences while you’re physically able to enjoy them.
The discipline hasn’t disappeared.
The purpose has changed.
That’s why the mathematics of retirement planning only gets us part of the way there. We still need the projections. We need to think through taxes, Social Security, healthcare, longevity and investment risk.
But eventually the plan has to move from paper into real life.
And sometimes the hardest part isn’t determining whether the money is there.
