In a world where everyone is unique with different spending and earning habits, retirement plans are surprisingly static, nearly the same for everyone. They tend to revolve a very simple theme:
Save as much as possible, and you’ll be fine.
This isn’t bad advice, so nobody really disputes it. In fact, having a great savings rate is generally pretty good advice. It can help us make up for certain setbacks that inevitably happen. Ending up with too much money would be considered a pretty good result for most people.
But people have to plan deeper than just saving as much as possible. Retirement goals are incredibly varied. Some might want to wrap up their career at 40, while others know they’ll work until they’re no longer physically able to. A different path is required for varied goals.
Other factors can have a huge effect, too. A spouse with a nice pension could easily be enough to support an entire household, especially one with a paid-off house and without the responsibility for saving for retirement.
The solution to this problem is simple. Instead of looking at retirement linearly, take a backwards approach. Imagine what you’d like to be doing 20 or 30 years from now, and then make plans accordingly.
Perhaps you’ll find that you don’t need to save as much. Perhaps you’ll find you need to save more. Or maybe you’ll just choose to save a lot anyway, knowing a secure backup plan can be worth its weight in gold.
