Is there such a thing as ENOUGH in retirement planning?
My friend Kim at MapleMoney.com said “If the glass represents the overall economy as well as our standard of living, there’s a case to be made that it doesn’t matter whether the glass is half empty or half full. It’s just too big. Our houses are too big. Our cars are too big. Our televisions are too big. Our wants are too big. We’ve grown the glass faster than we can afford to fill it.”
How much is enough?
At the end of her post, I made a comment that I think is worth elaborating on. The most common question I get as an advisor and a speaker on retirement is “How much is enough?” The question is really asking how much should I save, how much do I need to have or how much will I need to spend in retirement. Whatever the variation, I think there is a real problem with the question.
The problem is ‘enough’ never really comes because we just want more or bigger. I believe wanting more is not always a bad thing unless you take on too much debt trying to get more and bigger. Wanting more money, success, happiness, love or life can mean that you are motivated to improve and do better. You can’t fault people for improvement, can you?
What is enough?
If you think about it, the better question is “What is enough?” This question is real because it is something most people deal with on a daily basis simply because money is finite. We do not have trees in our back yards growing unlimited amounts of money. Instead we have to make choices every day about what is more urgent and more important. For example, it might be that eating out means we can’t pay off the entire credit card bill. Or if we go on that family vacation, we can’t put money into the kids RESP.
Basic understanding of cashflow means you must live within your means. This can be pretty foreign to some people because of easier access to debt. Never has it been easier to live beyond our means.
If you really think about it, true success might come when you recognize that a smaller glass is actually better especially if you can’t drink too much wine or worse yet, don’t like wine.
The real ‘SECRET’ (if I can call it that) is to live within your means and also find comfort in recognizing when LESS IS MORE, SMALLER IS BETTER or ENOUGH is ENOUGH.