The right question is: How much do you want to spend?
It is a complex process to provide a useful answer to you in your specific and unique situation. Let’s put this in perspective, when you turned 18 did you know how much money you would need to get to 65? No. With all the peaks and valleys, dirt roads and wide open highways of life you could not have truly known THE AMOUNT. My husband and I were told in our late 20s that we would need $1.7 million to retire. We were shocked, we chuckled, we talked about what we wanted in life, and then we lived it.
A healthy approach is to develop a conversation that you revisit a couple of times a year using facts and your best guess. When you met with an advisor to obtain the answer to how much you will need, did you review the pieces that impact that answer? You have control over many of them. Yes, based on your choices and how life rolls out you will have more or less.
Start the conversation and tell me about:
Do you value fitness, health, leisure, etc. will you buy new skates, beach towels, skis, clubs, kayaks, e-bikes, or a cottage on a fishing lake?
If you value family and relationships you may choose to help your adult children and grandchildren. How much will you give them and when? Maybe you won’t give them cash but you will let them live with you. Maybe you will pay for family vacations or swimming lessons or ski passes.
Maybe you value taking care of your aging parents. Will you spend time cutting their lawn, taking them on holidays with you or ensuring you have a home where you can all live?
Do you want to travel the globe and ride camels, or roam across Canada? Will you stay in hostels or resorts? Do you need a new RV or a "previously owned" one?
A new workshop with all the bells and whistles is in your future. Will you build or move? What do you want to spend on this?
A beautiful empty nest with updates and no renovations is on the horizon. What do you need to spend to prepare your home for sale? What will you end up with in your savings account once all is said and done?
Will you roll into retirement with a mortgage? For how long?
Will you have credit cards bills, car loans and lines of credit to pay?
Do you have spending habits that rely on “I will just do an overtime shift”? That stops.
Will you need to consider the cost of a senior residence and/or long-term care?
What are your personal habits and your genetics like? Will you live to 100 or not?
You may be in tip-top shape and perfectly healthy but accidents happen, and the gradual progression of some diseases will impact your finances.
Do you have them written down? Have you researched them? Have you put a price tag on them and put them on a timeline? You can. With these steps you have the potential to live the life you want; without them you could stay stuck.
Honestly, I occasionally hope these characters exist but there is no cash fairy who gives money to pay off debt, no Wizard of Oz with all the correct answers, and there is no magic wand to make more money appear. The fact remains you are a smart, capable person with decision making strengths. You can continue the practice of making good decisions. You need patience and a variety of life's pieces to keep you going. If you need help that's what I do!
As for my husband and me, we put money away for retirement right from the start and started the tedious but rewarding lifelong budget habit. We paid ourselves first to ensure we had holidays, school fees, and new tires. We also made a few "less than stellar" financial choices mostly because we didn’t dial into our goals often enough. Our plans for retirement have been adjusted a few times with more or less in the picture AND you will find us Sunday afternoons still talking about what the future could look like.