Over Saving for Retirement: Advice from Real People Who May Have Saved Too Much

Are you “saving too much”? Are you “not saving enough”? These questions haunt people who are worried about funding retirement responsibly. However, it is important to understand that the only person who can really answer the query is you.

People tend to measure retirement preparedness as the value of their retirement savings.

However, it is entirely possible (albeit difficult) to retire on Social Security alone — with no savings. And, many people have more money than they know what to do with — which might mean that they have saved too much.

The reality is that savings are only one aspect of what goes into a secure and happy retirement. A solid retirement plan involves retirement income (and how that changes over time), whether or not the retirement income is guaranteed for life, retirement expenses (and how those change over time), how to anticipate unanticipated events and various economic assumptions that you have very little control over and — last but not least — how you will be spending your time.

Use the NewRetirement Planner to create a personalized plan. The comprehensive system helps you think through details of funding retirement, plan your legacy and create contingencies for unknowns.

The reality is that there are not any right answers about how much savings is too much. There are only right answers for you and for what you value and need. You see, figuring out your financial plan is not entirely a numbers calculation, it is also a reflection of what is important to you, who you are and how you want to express your identity.

This reality was highlighted by a recent discussion on the NewRetirement Facebook group about this article: Are You Saving Too Much for Retirement?  Opinions were varied about the judgements and ideas related to retirement savings and how much is the right amount.

Here is some of the the advice people — particularly those who seem to have more than enough for retirement — had to offer:

Joe said, “If someone is unhappy, sure, then their balance might be off. I just know. I don’t deny myself anything I really want or need. I don’t yearn for anything. And it’s not like we never splurge on things that we really enjoy and that matter to us. But, unless you see someone is unhappy, who are you to know if their balance is off?”

Nicholas agreed with a sentiment that is true for if you have too much or even not quite enough: “It’s all about the lifestyle you want. As long as you are comfortable and happy. Enjoy.”

Feeling financially responsible and accumulating money is not a negative. And, for many people, it is core to their identity and something that gives them peace and even joy.

As Kenneth pointed out, “In the end, your EXPERIENCE is almost all that matters. For example, you get to 70 years old realizing you saved WAY too much and could’ve drank more whiskey and chased more women, but how was your EXPERIENCE during that time? Did you feel really good about saving, did you get psyched every time you got an extra $100 and sent it into your account? Did you spend an hour a week going over spreadsheets and doing “what if’s” and liking what you saw?”

He continued, “Happiness is a conglomeration of things, really, and in the end, is what we’re after. LACK of money creates a lot of stress and diminished happiness, so is it better to err on the side of caution and risk doing without and saving too much?”

The real upside of “over saving” is that you can retire early.

Frank found that, he could retire much earlier that expected. “I have started to look forward to moving my retirement date up earlier than originally anticipated. It was 67, then 65, and then a firm 62. If things go well, I am now considering 60 at this point. I definitely don’t want to work a day longer then I have to. But as Richard stated, I need to feel comfortable and sleep at night without worry. So no matter when it turns out to be, most likely it will be much later than the minimum date, as I want to ensure I am comfortable.”

Only you will know the spending and saving levels that are right for you now — and in the future.

Todd said, “While saving more is generally a good thing, some people who are savers have a difficult time making the transition to spending and might wind up depriving themselves from living the life they really want. Similarly, some people save so much of their income with a view toward tomorrow that they never get any enjoyment today — and tomorrow isn’t guaranteed. As with everything, balance is the key. The balance line is different for everyone.”

It is a massive paradigm shift to go from working and saving to leisure and spending. And, for some people, old habits die really hard.

Sean concurred with this sentiment, “I think one issue is that some people have been disciplined saving and successful accumulating. So successful that they’ve got plenty to spend and plenty to leave to heirs. Yet they still struggle to breakout of their savings mindset. It’s another facet of making the transition to retirement.”

Sean, continued, “A good number of people have indeed saved more than they’ll ever spend in retirement. One of the biggest difficulties is making the transition from accumulation to distribution. After living frugally for 50 years it can be very difficult to spend. That’s fine as a choice, but when it’s reflexive it can be helpful to let them know taking a cruise or buying that tractor is a realistic and affordable choice. Knowing that can be very helpful.”

If you want to spend, or think you might like to spend, run a scenario with The NewRetirement Planner to gain confidence that you can afford to spend.

Explore, 9 ways to overcome the terror of spending your retirement savings.

No matter whether you have saved too much or too little, it is important to address where you stand today and make any necessary adjustments.

Brad is philosophical about the fact that he may have saved too much and is careful to not focus on regret. He said, “I am a couple years into retirement and is starting to appear as if I saved too much or retired later then I could have. It is easier to judge these things in retrospect. Now, I could raise my standard of living quite a bit more. But I planned to raise it about 30% when I retired to travel. I can’t see the point of trying to see how little you can get by on in retirement as I have more time to do things. And, I chose not to be wasteful with my spending while I was working.”

Barbara’s values have shifted. She said, “I used to always think, in the back of my mind, when spending money, that if I didn’t spend it but saved it instead, my kids would appreciate me at my death at how much I sacrificed for them. Well, I am finding that they aren’t really appreciating me while alive so why do I care if they appreciate me when I’m dead? I am changing my mindset and going to work to “die with zero”. My husband and I worked for it, saved for it, so we might as well be the ones to spend it!”

Of course, as we age, our brains change and it is an interesting philosophical question to ponder — are the values you had when accumulating assets more important than the values you have today?

Philip makes a good point when he said, “I’d rather have too much than not enough. I retired at 71. I loved working. Only retired due to a new grand baby in a different state. I have plenty for spending in retirement. I plan to take it easy and put two grands through college. If I leave the children too much, that’s their problem.”

Steve is another philosopher. He said, “It is better to have and not need than to need and not have. Enjoy the fruits of your labor as they say.”

Barbara said, “I have no kids. And always planned to enjoy my money. And donate the rest to charities. Knowing it is helping others isn’t a bad way to end to it all either.”

Jolanda agreed, “Nothing wrong with saving too much and living simply. I know I could afford much more than I spend, but do I feel a need to? No. Do I want to? Not really. I’m pretty content with the way I live now. I’d rather see whatever is left of my money after I die doing good in the world.”

A HUGE reason that many people “over save” is that they want to anticipate anything and everything that can go wrong in the future.

Long term care is a potentially massive expense that you have a high chance of needing to fund. Having a plan for long term care is not something you want to overlook.  Long term care is not covered by Medicare. You can run through all of your assets and then get the care covered by Medicaid, but it might not be the type of facility you would prefer.

Steve is happy he saved too much. He said, “I don’t want to have to go to the cheap nursing home.”

No retirement financial plan is complete without documenting how you want to be cared for and how you will pay for that care. Use the NewRetirement Planner to figure out the right plan for you (it doesn’t have to be long term care insurance).

Learn about 10 alternatives to long term care insurance.

Long term care is expensive, but usually only lasts an average of between 6 months to three years, depending on the exact demographic.  It will put a crack in your nest egg, but might not bankrupt you.

However, dementia care can be a significant cost for a significantly longer period of time. 

Jordana pointed out, “What matters [with regards to how much savings you need] is that if you get dementia, the average time for care is 6-10 years and potentially it could be 20.”

She continued, “How can you say you have planned for retirement safely and securely if you haven’t planned for 20 years of nursing home care. I don’t have kids. I need to make sure I’m comfortable and happy no matter what happens– especially in elder life. That is when I want the most luxurious environment and conveniences — since I won’t be able to rough it as much as I can now.”

5 steps to take now to plan for the possibility of requiring dementia care.

We simply don’t know what will happen in the future and it is best to make sure that you have enough savings to cover potential unanticipated possibilities.

This is one of the reasons why so many people feel like no amount will ever be enough.

Anticipating unknowns — and creating financial back up plans is a good practice for retirement planning. It is especially a good idea for those who are struggling with the idea of whether or not they have saved too much or not enough.

The NewRetirement Planner is an excellent tool that enables you to model multiple scenarios. It can help you make sure you address the obvious unknowns: long term care, healthcare costs and home maintenance concerns. But, you can also  make a list of everything that worries you — a grandchild who might need expensive medical care or a fire at your home for example — and create a plan that you can feel good about.

Not everything unanticipated will actually happen, but you will absolutely be more certain that you are prepared for what does.

In 2018, Eric found an article that convinced him he had saved too much and he decided to indulge in a Tesla. He claims that the car has safety features that saved his life — multiple times in Atlanta traffic.

Eric said, “This is safest car ever. It dodged all attempts to destroy it with me inside.”

Who says splurges aren’t worth it?

Joe said, “I retired at 60. My income is $100k without my wife’s salary. I invest as if I need the income but never take it. It just keeps building. Why? I dunno. I am so used to saving and living within my means, I feel guilty spending what I have.”

Money is emotional. We all have a money personality type that can be both helpful and harmful, depending on the circumstances. It can be useful to talk or think about your relationship to money and make sure that you are genuinely living the life you want to and can afford to live.

Dewayne is aware of where some of his attitudes about money come from. He reflected, “At 66 I look back and see the struggle my parents had. My Dad always (and loudly) fretted about where was the money going to come from. We lived in a nice home, we all went to college, yet there was always the issue of money hanging over our head. Getting married, I was a teacher, my husband a laborer. We experienced a similar life. I made very little money, and while he had a good salary, it seemed like 6 months out of every year, he was laid off. We learned to live very lean. We never over extended our credit, skipped a lot of travel. We saved and saved, always with the fear it wouldn’t be enough. It seems it will always be there. The fear of not having enough, comes through past experience, deeply ingrained thinking.”

Judy doesn’t feel guilty or fearful about spending, she just doesn’t want to, her advice is to just enjoy what you enjoy. 

She said, “What is wrong with contentment? It isn’t in my nature to live flashy and to have a lot of things, or to travel expensively. I enjoy hostels more than fancy hotels and street food more than fancy restaurants. Contentment with simple pleasures gives me serenity and joy. Of course, I also enjoy the security that comes from knowing I could spend more if I want to.”

It is rare that you’ll find a financial or retirement planning news article that isn’t all doom and gloom. Headlines scream about low savings rates, a retirement crisis and the downfall of Social Security and Medicare.

The headlines aren’t always wrong, but they aren’t always right either.

Scott’s advice is to, “Ignore all of the sources out there scaring the bejesus out of everyone with their doom-saying about not saving enough, continue working to save $12 million (!) before you’re ready to retire, etc.”

He continued, “There are much better and more personalized resources now (like NewRetirement) that can give people a much better perspective on their situation – and that might just show them that they don’t need to save $12 million before they can retire from their crappy old job.”

Robyn observed, “I know a past co-worker who is 70 and has two years on his mortgage left. He has said even if there is an incentive, he will not take it. He will get a wonderful pension and SS plus his deferred comp. Plus, he had a heart attack while on the job. Not married. I just want to yell at him and tell him to go enjoy already!!”

However, Jack pointed out, “Sounds like he is enjoying himself already. Some people are defined by their jobs and would be depressed without them.”

Work is scientifically proven to keep you vital. It is also hugely enjoyable to many.

There is no law that says you need to retire. If you want to work, go for it!

Explore 14 reasons why working in retirement is the best and 9 tips for avoiding retirement depression.

For some people, saving too much means that they will have money leftover.

For others, a financial legacy– money leftover for someone — is something they plan for and is a big part of why they saved money to begin with.

Steve wrote, “We worked hard, saved, and planned early to leave our kids some money. My daughter’s a teacher and my son a musician. Neither will probably ever make enough to be considered ‘well off.’ We want them to have every chance at enjoying some of the things we worked for and enjoyed. And, we want our grands to enjoy things too. Kids were expensive. Soccer costs money. Swimming costs money. Gymnastics costs money. We want them to be able to try the things they want to try, and not being limited by what their parents could or couldn’t afford. Plus, I feel grateful that I’m able to help them out, and that they let us be a part of their lives.”

Explore financial strategies for helping your grandchildren.

Many people save their whole lives, then retire and some then become obsessed with growing their asset base.

Don thinks it is a good idea to understand why you want to grow your assets.  He said, “If your goal is to match the indexes I ask, “Why?” How will your life change if you have $2.2 million extra instead of $1.7? It won’t. So what can you think of that would be a bucket list, that’s no longer out of reach financially? Attend the Super Bowl? Play every major PGA course in America? Pay off an extended family member’s college loans? Leave a thousand dollar tip at lunch? Or not. Just having this conversation could cause their financial insecurity and stress to nearly disappear.”

He continued, “I believe there are three ways to fail in retirement: not save enough, outlive your savings (a variation of not saving enough), or have plenty and not enjoy the financial independence you have earned. It’s a good problem to have but it’s still a problem.”

Dewayne urged people to live the life they want now — no matter their circumstances. He said, “Some people out there seem to think ‘life’ does not begin until they retire – that it’s important to save like mad, and live frugally so their retirement balances are maximized, the house is paid off, and so forth. So they postpone travel and hobbies, thinking they’ll pick that up during retirement. A lot of people never make it.”

He continued, “My parents had that mode of thinking, being very frugal, never going anywhere, and putting every excess penny into paying off the house. Due to major health issues with my Mom, my Dad had to take early retirement and became literally a full-time caretaker; and they never got to do anything during their ‘retirement’. I watched my Dad go slowly downhill and he died literally a broken man. Over and over he told me he wished they had gone to some of these places that he had always dreamed to see, while my mom was still healthy.”

Dewayne concluded, “There’s a balance there. I make sure to maximize our retirement contributions, put some extra in our cash/emergency savings, then spend the rest on travel. I have seen multiple friends die or have major health issues in their 50’s and 60’s and am all too aware as to how little time you might have to live the life you might desire.”

If you find that you have saved more than you need, you might want to explore what maxing out your monthly spending might really look like.

Sharon said, “I added to my monthly expenses on the site to reduce my legacy to my kids who don’t need it. It gave me the confidence to spend a bit more than the bare bones spending I was doing.”

In My Plan > Withdrawals, the NewRetirement Planner enables you to run a withdrawals scenario to max out your spending — given your existing anticipated expenses, income, and desired legacy.

DeWayne also offered this advice and a well known quote,  “You cannot let that fear drive you too much – or you’ll end up with a lot of regret in your later years. There’s a quote, wrongly attributed to Mark Twain, that I’ve got pinned to my desktop: ‘Twenty years from now you will be more disappointed by the things you didn’t do than by the ones you did do. So throw off the bowlines! Sail away from safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover!’”

Finally, in the ever entwined relationship between money and emotions, Nancy offered this opinion, “I think the important thing is to do the things that are important to you and that bring you joy. This is the only life we get and my life will be judged by how much love I shared not how much money I left.”