Real life retirement is much more dynamic than a number. Why is there so much pressure to accumulate $x by a certain age or date? My guess is that investors are anchoring around a number as the solution. This may supply certainty but promotes high expectations regarding saving and investing. Let me humbly suggest a better approach to preparing for and enjoying retirement.

Get started when you’re ready. Creating new habits when you’re not ready is stressful, everyone comes around on their own timelines. A plan can be loosely defined by financials, life goals, or be detailed with lifestyle choices and time allocations. It’s unique and yours, you define when and what it looks like. It doesn’t need to be perfect and it’s ok if you don’t have all the answers.

The value of creating a plan is that it promotes ongoing dialogue with yourself, a partner, or a professional. This supplies clarity in your choices as you get closer to what’s important. What matters in your 30s may be completely different in your 50s based on life experiences. Talking with someone you trust over the years sets a foundation.

Of course, it’s a good idea to invest and save early in a career, that’s the point of compounding interest. What’s lost in translation is how valuable your financial behavior is in the early years. It’s challenging to have perspective in your 20s on what exactly your 60s and beyond may look like. Here, it’s faith in your future, and accepting the idea that putting some dollars away today will lead to flexibility tomorrow.

When thinking about retirement, I believe it’s best to chunk out your time into various phases.  It’s a mistake to think and act as if it’s one continuous timeline. You don’t have to accumulate everything necessary by your start date either. There will be plenty of time for your investments to contract and expand through a 30- or 40-year retirement.

In truth, it’s various phases loosely tied together and defined by how life plays out. There’s a lot of chances involved and even having a plan won’t guarantee you get the results you’re looking for. Patience and revisiting a process go a long way in building confidence.

Ages 53-57 could be a primary reflection point. How are things going? Are you happy with where you are personally and professionally? Is change necessary? Your mid 50s may be capital intensive with college and mortgage funding, financial complexity will continue to accumulate too. This is where “retirement” begins to feel more real than at any prior point. It’s valuable to continue refining expectations and consider what you’re doing with your time.

Ages 63-67 offer another vantage point. You may have retired from your primary career, be working in another role by choice or necessity, or be completely done. You may be considering when to claim Social Security, sorting out cashflows, and prioritizing fun spending with those you care about. Hopefully you control more of your time. In addition to time, your health and wellness is more important than any amount of money you may have accumulated to this point.

Through your 70s, you’re receiving Social Security and distributing required income from your pretax IRAs to meet cash flow needs. Roth and after-tax investments play a role here too. You’ve accumulated a lot of wisdom and knowledge which is almost as important as your health. It’s likely that your happiness is defined by spending time doing things you enjoy with people who matter to you.

Your 80s and beyond can be defined by a lot, it’s challenging to think what exactly that may look like. Maintaining mobility and wellness are top priorities, so is ongoing learning and perhaps travel. Having enough financial resources may define what gifting looks like now as opposed to your 60s. Giving while alive is so much more rewarding than the alternative.

There is a ton of living, spending, working, and relaxing to do through the various phases of retirement. You define what it means and when. Forget about a number or an age and instead think in terms of your time, cash flows, and what makes you happy. Acknowledging this early will allow you to make the most of what you have.

Advisory services through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Flowerstone Financial are not affiliated.

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