You Can Never Retire With Too Much Money

Posted on Sep 2 2015 - 7:01am by Kimberley Laws


You can never retire with too much money. This statement seems head-smackingly obvious. Everyone dreams of entering their golden years with a pterodactyl-sized nest egg, right? The truth is that thanks to this unpredictable, ever-changing world, it is becoming increasingly difficult to plan for the long-term future. And, the more money you set aside, the better prepared you will be–no matter what that future looks like.

Even the experts agree that it is nearly impossible to project what your financial needs will be decades from now. In fact,Time Magazine‘s “The One Retirement Question You Must Get Right” boldly admits that it’s practically impossible to calculate as it involves knowing the length of your life, the real return on your investments, and a host of smaller factors. Even economists and financial experts cannot see around corners.

Your Lifespan

People are living longer, which means their retirement savings have to stretch over many more years. Furthermore, a longer lifespan equals a greater need for out-of-pocket health care expenses. “5 Reasons Why You’ll Probably Need More Retirement Income,” in fact, reports that medical costs, deductibles, and insurance premiums are all rising. Enjoying a healthy retirement can put a serious dent in your nest egg.

Your Lifestyle

The amount of money required to finance your golden years will also be influenced by the type of lifestyle that you hope to enjoy. Gallivanting and globe-trotting, shiny new cars, expensive hobbies, and evenings out add up quickly. If you long to maintain a lavish lifestyle, you will require a larger nest egg than someone with simpler tastes.

Interestingly, Harriet Veenker, a Certified Financial Planner, tells Bankrate’s “5 Unforeseen Expenses that Ruin Retirement” that most new retirees tend to overspend in their first year or two because there is so much to do. It is important to find a balance between enjoying your retirement and budgeting for the years to come.

The Back-up Plan

Some retirees find a false sense of security by having a supposed back-up plan–going back to work after retirement. In fact, according to the Financial Post, an ING Direct Survey shows that over thirty percent of respondents over the age of 55 had to return to work full-time after retiring due to insufficient savings. That is a tad disconcerting.

What makes this news even more disheartening is that many retired people will develop health issues that could make this back-up plan impossible. According to “It’s Time to Get Real about Retirement Planning,” roughly two-thirds of early retirements are health-related. No one should count on being able to return to work if one’s finances go awry.

No Pension

Most Americans will not receive a pension from their workplace during retirement. In fact, according to U.S. News and World Report, a mere 31 percent of employees were offered a traditional pension at work in 2010. Furthermore, if your employer does offer one, there is no guarantee that it will still be there when you retire. That’s why it is important to prepare for financial self-sufficiency.

The Unknown

If your projected retirement is several decades away, it is impossible to predict what the world will be like, let alone how much money you will need to survive in it. As Dilbert creator, Scott Adams, states in the Wall Street Journal, “When I retire will I need to pay for cable or will I be watching shows on my Google Glasses? Will I need a full health-care plan or will my personal robot have medical training?”

The truth is that no one know what the future holds. The only thing that is certain is that no amount of savings is ever too much.

What unexpected financial hiccups have you encountered during retirement?


About the Author

Kimberley Laws is a freelance writer, avid blogger, career counselor and High School English Teacher. You can follow her at The Embiggens Project and Searching for Barry Weiss.