Retirement Planning and the Big Picture

When planning for retirement, money may not be the most important consideration.

When planning for retirement, think about your priorities in life not just money.

Millions of Americans buy the retirement industry's familiar song: Unless you save upwards of a million dollars, you are likely to end your days living on the street eating cat food.

Wrong! Though it makes sense to save a few dollars for a rainy day, there is no evidence that great wealth is needed to enjoy a safe, secure, fulfilling retirement. In fact, the toll on the human body and spirit it takes to amass large sums of money can make your retirement worse, rather than more comfortable.

At first this contrarian notion may be difficult to swallow. After all, given a choice, most of us would be delighted to have lots more money. But you may be more willing to rethink the conventional wisdom (that richer is always better) if you think about the older people you know. I bet you can name several wealthy people whom you would classify as miserable old farts. And I'll also wager that at least a few of the people of retirement age whom you admire most have very modest savings.

Consider the Toll of Working Too Hard

The problem with saving big bucks for retirement is not, of course, that you end up with a fat bank account, but that for most of us it requires working incredibly long hours during what otherwise should be some of life's most enjoyable and creative years.

Too often, the nasty side effect of overinvesting in one's financial life is that other more important concerns are neglected, including spending time with friends and family, taking care of your health, and developing and nurturing authentic personal interests that will save you from being a bored, crotchety TV addict later in life.

Think About Your Priorities

When thinking about how important it is to retire rich, ask yourself this question: When you were in your twenties or thirties, what were your most important concerns? People often come up with a list which involves some or all of the following:

• enjoying one or more close personal relationships
• learning new things (going to school)
• maintaining good family relationships
• being self-sufficient (working)
• spending time with old friends and making new ones
• maintaining good health (getting enough exercise, eating well, and so on), and
• devoting time and energy to one or more personal interests (poetry, music, a sport you name it).

The point is that although financial issues usually appear somewhere, they don't dominate the list.

Nurture Your Personality Throughout Life

You may ask, "What do my concerns as a young adult have to do with my retirement?" The answer is: "A great deal." Most peoples' personalities, including their fundamental likes and dislikes, don't change that radically as they age. People who loved baseball, chocolate, sex, and music at age 30 will very likely be attracted to the same things at 70.

No question, the details of what you'll enjoy after 65 will probably be different than they once were. (If you like to learn new things, you may be learning French at an adult school rather than trying to finish a master's degree.) But core things that you identified as contributing to a satisfying life will probably change remarkably little.

Keep Sight of Your Priorities in Your Middle Years

In this context it's easy to see why it can be a mistake to overfocus on making and saving money during one's middle years. Too many of the other things that are key to enjoying life may be so seriously neglected that they atrophy. Or put more directly, if during midlife you miss most of your kids' school and sports activities, fail to exercise, neglect your friendship network, and are too busy to keep up with your own personal interests or learn new things, you are at high risk of being isolated, ill, and bored in your retirement years.

A Lesson From the Experts

If you doubt this advice, Work Less, Live More: The Way to Semi-Retirement provides many examples of people who have decided to focus on what they find fulfilling and rewarding now rather than waiting to retire. The discussions illuminate the huge gap between the "save more money" message of the personal finance press and investment industry, and the reality that such a focus on money is unnecessary and makes you miss out on living in the meantime.

The successful semi-retired people discussed in the book are, for the most part, not primarily interested in money either in spending lots of it, piling up more, or worrying about having enough. True, a few of them had ample savings and no money worries; their focus on other challenges is hardly a surprise. However, many others, with more typical middle-class incomes, also don't give money much thought. Some have chosen to live fairly frugal lives; others are so busy thinking and doing interesting things they simply don't have the time or desire to focus a large amount of energy on their finances.

When you look at these examples, you see that what they've chosen to focus on is much more like that list above:

• Learning new things.
• Developing lots of interests.
• Finding useful ways to connect to the world.
• Cultivating important family relationships and friendships.
• Taking steps to protect their health.

Bob Clyatt's Work Less, Live More: The Way to Semi-Retirement (Nolo) shows you how to work fewer hours, realize your goals and dreams, and spend time with your loved ones rather than slaving away until the "normal" retirement age of 65.