What am I Saving For?

Most people would define their primary savings goal as “retirement.” …Or would they?

Of course, retirement is often a primary long-term savings goal, but not always. The definition of retirement itself has morphed over the recent decade with people living longer lives. “Retirement” encompasses more than simply stopping work and being on a “permanent vacation.”  In fact, recent research published in the Journal of Financial Planning* reports that quitting work cold turkey often is not reality – for a number of reasons.

selective focus photography of person holding the adventure begins mug
There is more to the long-term savings equation that a simple line from Point A (today) to Point B (retirement).

This article is meant to give you food for thought about why continuing to save TODAY is a sound idea – whether you are tracking excitedly toward retirement or if retirement is not the #1 goal or on your radar screen yet. Here is a fun fact (and please note that the research was conducted among participants with savings between $500k and $3 million);

  • If current trends play out, 26 percent of [savers and investors] who make an initial decision to stop working entirely will return to work.*

It turns out that work gives people a sense of purpose that is not entirely around making money. “Having something to show up for” is more important than the “slow moving time” of permanent vacation.

You may say, “give me the permanent vacation”! But the research says that work later in life in both the form of part-time paid projects as well as volunteering using skills from former careers provides a huge “purpose payoff”.

Let’s go back to the question of “What am I saving for?”  It would seem that there is more to the long-term savings equation that a simple line from Point A (today) to Point B (retirement). There are key intermediate goals of:

  • Emergency fund
  • Travel and adventure
  • Ability to slow down someday and choose how/for whom one works
  • Healthcare savings for later in life
  • Charitable pursuits today and/or someday
  • Being able to afford and enjoy more than one home prior to retirement
  • …Add your goal.

These intermediate “goals” can put off retirement – or more important, give you enjoyment long before retirement, plus take you through a longer-term period of slowing down and not ever fully retiring. Perhaps thinking about saving and investing with these goals in mind can provide more of an incentive to save and invest in the first place.

Life is short – start defining your goals and dreams today.

*Mitch Anthony, Lisa Kueng, Gary DeMoss, Journal of Financial Planning; November 2019.


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