How Much is Enough? – A Foundation for Retirement Planning

NOTE: We know people like to hear about beaches and travel and dogs etc. but we have to pay for all that somehow. This is a series of posts on the financial side of retirement. Like many bloggers and most people, I'm not going to share our actual numbers because it's pretty personal, and it may not be safe in the modern world. But I will give you what I think are important foundational points. I also want to say I'm not your financial advisor! I'm our financial advisor, and I'm only that until I tire of it and hire a professional. So if you're taking financial advice from me, well I really urge you to hire a professional!

In order to retire "early", or "on time", or even "at all", the question is always the same: "how much is enough"? And the answer is always the same: "it depends". It really is almost as varied as our fingerprints, because everyone's situation is just so different. Dreams, income sources, attitudes on spending, asset allocation, health/longevity, family situations, they're all different. Can we really know the answer? I'd say to a firm number, it isn't answerable, but since this is a retirement adventure blog I will try to fill in some gaps, and lay out a bit of a foundation.

Stack of $20 bills
Is this enough?

Before we dig too deeply though, I don't plan to discuss retiring later, in your 70s for example, because I don't have any experience with it and haven't done any research in this area. I'm focusing on people who either want to retire “on time”, I use that very roughly to mean “sometime in their 60s”, or early, in their 50s or younger. These are people who want to live their lives “on purpose”, who want to drive the boat, not just be a passenger. But in order to get there on time or early, you really need a plan. And to make a good plan, there are some important preliminary steps, some foundational pillars that are in my opinion, required for success.

Because retirement, especially early retirement, is such an emotional journey, I think you really need to start with the feeling that you really know yourself and your spouse. You definitely need to educate yourself, that's another foundational pillar. And you will also need to embrace some modern realities (pensions are rare, social security gets riskier every year, the world is a chaotic place). These are foundational pieces of the mental and emotional parts, and they lead into the actual planning process.

I will also say that this series isn't a nuts and bolts spreadsheet and statistics class. I'm going to be discussing the strategies we used, and only briefly touching on the tactical parts of using this tool or that method. I may get into those later as it makes sense and if there is interest.

Know Yourself

Knowing yourself is an important part of planning anything. If you want to get somewhere, and this whole thing is a journey, you need to know where you are starting from, mentally and emotionally. Note I haven't yet mentioned where you are financially - that will come later. So, do you enjoy pinching pennies, or are you “spendy”? Do you like to travel, or are you happy in a comfortable chair reading a great book? Do you want to ride a Harley, or is a Schwinn more your speed? Are you happy with a simple lifestyle, or do you really want all the modern conveniences? Do you have family and friends that you want to visit often or are you OK with once or twice a year? How is your health and your family health history, i.e. do you expect to live to a ripe old age or are your years likely to be fewer? Ask these questions (and many others) of yourself and your spouse/partner. The answers will guide most of your decisions later.

Beyond these more general questions, you and your partner really ought to talk about where you would like to live in retirement. It's a pretty basic question, but also pretty important don't you think? So talk about it! Many people are very happy where they are and will be even happier simply not working while living in the same town, same house. Some want to live closer to their grandchildren. Others want to travel the world, move to another climate (north to south, south to north), or even to another country and culture.

In our first year of retirement (the anniversary is coming up soon) we've done a bit of each of these last three things and are really enjoying the journey. I will say this though: we don't really like to travel, but we like being in new places. The travel part is mostly drudgery for me, especially air travel, and even more so international air travel, and kick it up another notch when you're hauling everything you own plus two dogs. So our ideal is to go somewhere new and stay there for months or preferably years. We want to settle in and become part of the community, not just a pair of vagabonds passing through on a boat or a plane. It makes us happier not just meeting new people, but really getting to know them on a deeper level.

BTW, please don't assume your spouse is just like you – talk about these things, talk about them a lot! Even if you have different ideas of a perfect retirement, I bet you can come to a middle ground where you are both very happy. But to do that you need to talk about it - this is foundational, in your relationship and in your retirement. Once you have this foundation, retirement planning has a real purpose, much greater than just “not going to work”.

Educate Yourself

If you are a couple, both of you don't need to become financial planners in order to retire. But in my opinion at least one of you should do some homework. As I started to get into the early stages of planning, I was talking with everybody I knew that was “of a certain age”. We may not all be in the same boat but we're all in boats, and we all care about the waves and the tides!

One good friend (thanks Dave Staud!) pointed me to a book called “Unveiling the Retirement Myth”, by Jim Otar. He's a financial advisor in Canada, but originally from Turkey I believe. He started his education and career as an engineer, and his writing style and approach to problem solving really fit well with my technical brain. Now I will say the book is 525 pages, so you have to be really motivated to want to dig into something like that! I was pretty proud of myself when I actually finished it. He also sells an Excel based retirement planning program called the Otar Retirement Calculator, which I use religiously. It's not without some issues, but I like it a lot.

There are also great online resources – Motley Fool has a retirement focused page and Bogleheads does as well, both very good. They are two very popular sites for good reason, and they each have excellent ebooks associated with them as well. But when you dig into them, you'll find a lot to read, and of course the Internet is a rabbit hole that Alice in Wonderland had nightmares about. It can be a little overwhelming, especially when you're just getting started thinking about retirement planning.

Fortunately there is a good, concise book that touches on all the principles and is only 100 pages: Can I Retire (How Much Money You Need to Retire and How to Manage Your Retirement Savings, Explained in 100 Pages or Less)” by Mike Piper, CPA. It's an excellent place to start (after finishing this blog post of course). If after that, you want to read Otar's epic, or the Bogleheads' book, that's great. Or maybe this is all too much, or you simply aren't interested in all this, that's fine. You may want to go straight to a financial planner and let them manage it all for you, but I suggest at least having that book in your quiver.

Embrace Reality

Finally, we all have to face the realities of the world. There are stock market swings, bond risks, and currently very low interest on our savings. I have a Wells Fargo savings account that is paying 0.01% interest! No, that's not a typo and no, I don't keep much money in there. Besides that, there are wars and there is terrorism. And the job of the 24-hour news business is to hype everything to the moon and stars in order to get readers/viewers/followers. And the things that should give us solace also have their own stressors. Our leaders are playing politics with our Social Security funds. Pensions have all but disappeared, unless you are in a government job or the rare business that still offers them. This means we have more responsibility ourselves to make sure we can retire and live out our lives with some financial peace. That's OK, it's reality, so we may as well embrace it.

But how can you retire and still sleep at night? I always go back to education to help me quit stressing out. The more I know the more I feel in control, even if that control is simply learning to accept certain risks. When I worked, I took melatonin to help me sleep - now I take nothing and sleep like a baby. I do make adjustments to my figures though. For example, I'm not planning on getting all the money that Social Security says I will get when I finally decide to take it. There's a term called “means testing” that's becoming used more lately in this arena. The government will check to see if I have a certain level of means (how well off I am), and then decide if I need all of the money, some of it, or I suppose none of it. Never mind that it was my money they took, and then spent on something else. Biting my tongue now, the bottom line is that I've made some adjustments in my planning based on this uncertainty, but I am definitely still counting on Social Security in my lifetime. If I was 30 or 40 years old, I'd be very suspicious of what might come of Social Security.

The legitimate alternative is to find a financial advisor you can trust, who understands these things and knows how to deal with them. That person can take that stress off you and allow you to enjoy the lead up to, and the actual retirement. But we all have to deal with the world as it is and how it is likely to be, not what we want it to be.

These foundational pillars don't get built overnight. It may be months or years before all this sinks in, or maybe the reality of your age, job status, etc. forces you to speed it up. But I urge you to think and talk about these things, do some research, and try to get comfortable with the reality of the modern financial world.

Do that, and you'll know what you want to do in your retirement; then you can really start on a great retirement plan. To that end, I have broken down my retirement planning into three main areas: calculating/estimating income needs (spending), income generation (funding your lifestyle), and closing the loop (comparing spending and income, and making adjustments). I'll cover each of these in subsequent posts, so stay tuned.


  1. Paul B on April 2, 2018 at 8:48 am

    Great stuff, Norm! Look forward to your next columns (assume you are writing this on a nice sandy beach 🙂 )

    • Norm on April 2, 2018 at 1:46 pm

      No! I can’t write on the beach – too distracting! 🙂

  2. DaveS on April 3, 2018 at 1:31 am

    So glad to have played a *tiny* part in your incredible journey, Norm!

    By the way, I’m hoping that none of your readers pays the $160+ that Amazon scalpers are asking for Jim Otar’s book — especially since one can buy it in PDF form directly from the author’s website for $6:

    • Norm Pyle on April 3, 2018 at 7:01 am

      That’s great Dave, I had forgotten where that was, thank you! I will fix the link in the article to go to Jim’s site. (and you played much more than a tiny part! 🙂 )

    • Amy B on April 5, 2018 at 9:44 am

      …and I felt pretty cool that I knew “Dave Staud”…. Miss you guys!

      Many many moons ago at HP they offered us a course “The road to financial independence”. 20+ years later I still refer to lessons from that class. I wish that type training was more widely offered.

      • Norm Pyle on April 5, 2018 at 7:32 pm

        Yeah, that Dave Staud guy is a pretty good guy! I don’t remember getting a financial independence guide at HP, but if I did, I probably threw it away. I was stupid then. More companies should do that! Hope all is well with you Amy!

  3. Kevlar on April 4, 2018 at 8:13 am

    I love that the educational blogs are interspersed among the ‘day-in-the-life’ blogs. Both are great!

    • Norm on April 4, 2018 at 5:00 pm

      Thanks Kevlar! I hope there is some useful info in these for everyone. I’m not the expert many others are, but I just try to explain it in my own way.

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