When Greg showed up for our meeting, he had an armload of financial documents and a brain buzzing with questions.
He began our discussion by mentioning possible retirement dates. Then he moved on to housing changes he was considering:
“I’m thinking we could downsize to a new retirement home. Although, I’d like to keep our vacation home so the family has a familiar place to get together each year…. what do you think? Should I wait for the housing market to bounce back? Or should I just go ahead and sell my house now, then wait to buy once interest rates go back down? But if I did that, where would I live in the meantime?”
As Greg talked a mile a minute, he kept saying “Beth and I just don’t ever want to be a burden to our two daughters. ”
After his flurry of words and questions, Greg paused and wondered out loud, “Can I even afford to retire? Maybe I should just go ahead and work a few extra years to make sure I have enough.”
Having enough
Enough. That’s the six-letter word that haunts–not just middle-class retirees, but all people. Someone once asked John D. Rockefeller–then the world’s richest man–“How much is enough?” He responded, “Just a little bit more.”
So, Greg’s anxiety about having enough for retirement is not uncommon. It’s nerve-wracking and confusing trying to get ready for life after work. With so many decisions to make and so much unknown, it’s easy to feel anxious.
Let’s talk for a few minutes about having enough.
Enough accumulated?
Once Greg put everything out there on the table (both literally and figuratively), we went to work.
For about an hour, I carefully sorted through his documents. I asked him clarifying questions about his retirement accounts, the cash he had on hand, his expected Social Security benefits, and his mortgage and budget details.
When I had gathered all the pertinent information, I started sketching out the beginnings of a rough, but desperately needed financial plan.
“Greg,” I announced. “You have about $2 million in assets! That makes you a multi-millionaire! My sense is your retirement plan is going to work just fine.”
Greg smiled weakly, looked down at the carpet, and said glumly, “Then why don’t I feel like it’s enough?”
(For the record, most of our hard-working, middle-class clients respond in this fashion.) I suspect if Greg had $10 million in assets, he’d feel a lot better. I also believe he’d be even more comfortable if he had $15 million, and so on…)
Enough to fund my living and giving?
Now it was my turn to ask Greg some questions. I started with the whole subject of expectations and lifestyle goals–specifically how much he and Beth would need to live on in retirement. We looked at their budget and anticipated expenses, discussed their travel dreams, and then factored in certain fiscal realities like inflation.
Next, we moved to the legacy question: how much do you want to pass on?
As you probably know, the wisdom of old King Solomon–at least some of it–is preserved for us in the Book of Proverbs in the Bible. There we find him mentioning the pros and cons of leaving wealth to one’s descendants.
In one place we read: “A good man leaves an inheritance to his children’s children” (Proverbs 13:22 NKJV). In this verse, we see the upside of blessing one’s family with the fruit of one’s lifelong labor.
But in another chapter, Solomon warns, “An inheritance gained hastily at the beginning will not be blessed at the end (Proverbs 20:21, NKJV). The idea behind this verse may be the sad scenario we’ve seen so many times in life: Heirs receiving too much wealth too soon. Before they’re able to wisely handle such a gift, they get a whopping inheritance. And the consequences are often ruinous. There are issues of maturity and timing that must be considered.
So, I asked Greg: “How much do you want to leave your daughters when you are gone? This will help us determine how much prosperity they can handle, and also how much you can afford to withdraw from your retirement accounts while you are living out your final years.”
Here Greg and I were wrestling with a basic truth in money management and retirement planning: We have to balance what we need and want in the present with what we desire to see happen in the future. We were simply trying to wisely manage Greg’s multi-million dollar estate. How much does he need/want to live on? How much does he wish to bequeath to family and/or charity?
Greg settled on three things: (1) he didn’t want to feel guilty about using and enjoying his assets; (2) he didn’t feel right about leaving his daughters a large cash inheritance; (3) he didn’t want to be a financial burden and die broke. So, we took all these desires, goals, and facts and crafted a plan. It took a couple of meetings. But now Greg feels immense relief that he has enough. He is looking forward to retirement–instead of dreading it.
Why we struggle to believe we have enough
There’s a reason people facing retirement struggle with the question of having enough. I believe it’s tied up with our ideas about work and success. We know what success looks like in a career. Work hard and you’ll get rewarded. It’s that simple. If we consistently do a good job, we get paychecks and–perhaps–bonuses, raises, and promotions. As a result of our labors–and our habits of saving and investing–we see our assets grow.
In retirement, we’re no longer working and accumulating. We’re mostly spending. And withdrawing 80K (or more) from our retirement assets each year to fund our living and giving seems irresponsible. It feels like the path to failure, not success. And it sparks questions like: “Am I going to run out? Do I have enough?” Like Rockefeller–and like Greg–we think, “A little more money would make me a lot less anxious.”
Here’s the truth: There’s no investment, strategy, or institution on earth that is 100% secure against every risk. And that’s why our goal shouldn’t be a plan that will guarantee total security. No such thing exists. Rather, our goal should be a wise retirement plan that, after applying certain reasonable assumptions, stands a good chance of success.
This is the problem that arises when we establish a certain financial figure as our barometer for safety. We fall into the trap of trusting in our wealth.
Here’s what the apostle Paul, another wise man, said in another part of the Bible regarding this whole question of wealth, how much is enough, and where to put our trust:
For we brought nothing into this world, and it is certain we can carry nothing out. And having food and clothing, with these we shall be content. But those who desire to be rich fall into temptation and a snare, and into many foolish and harmful lusts which drown men in destruction and perdition. For the love of money is a root of all kinds of evil, for which some have strayed from the faith in their greediness, and pierced themselves through with many sorrows….
Command those who are rich in this present age not to be haughty, nor to trust in uncertain riches but in the living God, who gives us richly all things to enjoy. Let them do good, that they be rich in good works, ready to give, willing to share, storing up for themselves a good foundation for the time to come, that they may lay hold on eternal life. (1 Timothy 6:7-10, 17-19, NKJV)
Those are wise words about important things: contentment and doing good and being willing to share. Paul wasn’t suggesting we get rid of all our possessions. He was urging us not to make the foolish mistake of trusting in our wealth.
It’s when we live by faith, believing that God is a trustworthy Provider and life’s only real safety net that we find financial peace. Only then can we say with contentment and glad hearts, “I have ENOUGH.”
What about you?
If you worry about having enough…if you find yourself thinking, “I wish I had ‘a little bit more,’” reach out to our team at Christy Capital Management.
Visit our website. There–in the top right corner of the page–you’ll see a green TALK WITH AN ADVISOR button. Click it, and leave us a short message. We’ll be in touch right away.
We want to help you look forward to life’s next chapter–not dread it.