What’s the Number?

Is it possible to save too much for retirement? How much do you need before retiring? Turns out “what’s your number” is the start of many office conversations in the civilian world. The “number” being one’s balance in a retirement account or other investments which would permit retirement. I suppose this is yet another fact of life I was shielded from during military service. I don’t recall ever having a “what’s your number” conversation during 24 years in the military!  

That being said, it’s not like I didn’t think about the future. I’ve been a super saver my whole adult life. I learned quickly early on that investing often is a financial truth to build wealth and I’ve practiced what I preach. In addition to employer retirement plans such as TSP, I’ve maintained IRAs for my wife and I contributing regularly over the past 20 plus years. Coupled with our real estate investments, we are definitely on track for an early retirement.

But the question that’s gnawing at me lately is how much is enough? The Federal Reserve website has some good information on their “Survey of Consumer Finances” website. At a minimum, one can compare where they stand compared to national averages as seen in today’s pic. There are also a lot of great calculators out there which take into consideration factors such as inflation. However, if the past five years have shown us anything it’s that what can wrong, will. Murphy’s law is alive and well.

Further complicating the math in determining a “number” is military retirement and VA disability compensation. This is a great complication for veterans! I’ve done some math to assign a numerical value to these benefits, as if they were retirement accounts. Then I add our other investments in for a grand total. I like what I see, but is it enough?

Perhaps my biggest challenge determining a number is the absence of long-term goals. I just can’t envision what retired life will look like for me yet. To know how much one needs for retirement, one needs to anticipate how much they will spend for 30 plus years. While I’ve intimated about travel, vacation homes and other retired life plans, nothing is really calling me at the moment.

Finally, there is the question of estate management. I really need to look into this more. While I am covered by life insurance through my employer now, I’m not so sure I’ll maintain life insurance in retirement. I know this approach takes some serious planning to include considering tax implications and ensuring all aspects of the estate are in order before retiring. Yet more calculus that has to go into the “number” question.

With all the uncertainty in the economy today, the natural tendency may be to double down on retirement savings. Max out contributions, work a few extra years, etc. I’m not so sure that strategy is best for everyone. Life is not a dressed rehearsal. I don’t have an answer to the number question yet. Perhaps determining one’s number is less math and more gut feeling in this crazy world. Worst case, you can always go back to work!  

Taking a summer hiatus next week but will be back as we roll into August with more Leading – Investing – Living.

Looking for a good how-to on wealth building? Check out my book, Millionaire on a Worker’s Budget: Five Financial Truth’s to Build Wealth on sale now at Amazon!

Interested in rental property investing? Look for Collect Rent, Don’t Pay It: A Beginner’s Guide to Rental Property Investing on Amazon to learn how our family turned rental property investing into a successful side hustle!

Look for, Being Frugal, a Truth to Build Wealth, coming to Amazon in early 2025!

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