Are You Still Chasing the Almighty Dollar, Even Though You Have Plenty to Retire?
Financial planners see this all the time: You've saved enough to retire comfortably. Yet you're worried about your money running out and want more. It’s time to ask yourself “How much is enough?” Maybe less than you think!

Nearly six out of 10 Americans fear running out of money more than death, according to a survey by AIG Life & Retirement. We’ve seen this play out with our own clients. Many have saved enough money to last 30-40 years, yet some still pinch pennies as if they are going bankrupt.
One particular couple comes to mind, a retired doctor and teacher. Their income from a pension and Social Security is nearly $100,000 annually – about the same amount as their annual expenses. They don’t touch their investment account of approximately $2 million – yet they still worry they are spending more than they should. For example, just before the pandemic, they asked if they could afford to take a Mediterranean cruise that would cost around $10,000. Of course, they could.
If the past couple of years have taught us anything, it’s how precious life is. In the past year alone, we’ve lost clients to cancer, unexpected medical complications, heart attack and COVID-19. The pandemic gave all of us a wake-up call to ask what is really important in life. When it comes to money, the question is, how much is enough? While the answer is different for each of us, the facts show it may be less than you think.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Here are our recommendations to create peace of mind that you have enough:
Use the 4% Rule as a Guide in Retirement
The 4% rule is a well-known strategy. It suggests that retirees with a well-balanced portfolio can withdraw 4% of their initial retirement assets and increase this amount by inflation every year. It provides a steady income stream while also maintaining an account balance that keeps income flowing through retirement.
Here’s a simple example: A couple with $1.5 million in retirement savings can withdraw $60,000 each year. This amount is added to their Social Security, pension and other income, providing plenty of money to life a comfortable life. Meanwhile, over the long term, the remaining amount can continue to grow from gains in stocks, bonds and other investments.
For those who think they should spend less, we encourage you to research this topic, because spending too little is also a lifestyle risk. We see some folks spending less than 2% of their assets per year in retirement, which we like to point out would probably take another Great Depression to result in them running out of money. Thus, determining the right withdrawal rate based on your circumstances can make for a very comfortable retirement.
To Enjoy Retirement, Be Flexible with Your Spending
This is one of the most important conversations we have with clients as they approach retirement. We remind them they don’t know how long their health will allow them to keep doing the things they love, so make these activities a priority.
Whether it’s traveling the world or splurging on season tickets at the ballpark and dining at four-star restaurants, your expenses may exceed the 4% rule in the early years. But that’s OK. In reality, retirement spending often comes in a “U” shape as opposed to a straight line. Retirees often spend more in their 60s and 70s and less in their 80s. One of our favorite stories involves a client who was spending more than 4% shortly after he retired, and we warned him that he could run out of money if financial markets took a big hit. His response was unforgettable. He said he was losing a good friend of his almost every year, and he wanted to make sure he did everything he ever wanted to do before his number was up.
He said if the stock market crashes, wiping out a significant portion of his wealth, he would be just fine sitting on the back porch sipping lemonade while waiting for the grandchildren to come over and play. He was extremely comfortable tying his retirement largely to the U.S. economy and markets. Are you willing to do this to some degree?
We have told this story many times over the years to help new retirees frame their thinking as they shift from a savings to spending mindset. Hitching your retirement wagon to this country’s prosperity is a strategy worth considering.
Make Sure Your Portfolio is Well-Diversified
A portfolio with multiple asset classes allows you the flexibility to always have a piece of your portfolio doing well, or at a minimum holding up better, in an economic downturn. The secret to a successful retirement investment strategy is to always be willing to lean against the financial markets.
If the stock market keeps going up, you can take some gains when you need money. If stocks ever take a huge dive, use your cash and bonds to fund your living expenses. The sooner you realize your investment decisions in retirement should be more of a reaction to the current environment instead of trying to predict where it is headed, the better off you will be.
Reassess How Much Is ‘Enough’
At age 50, you may have set a goal of retiring with $3 million in investments and worked to achieve that amount. However, as you approach retirement, your priorities may have changed. And even if you haven’t met your $3 million goal you set for yourself years ago, you might find that the amount in the bank may easily fund your retirement.
We certainly understand that some people enjoy what they do; working well into their 70s can give them purpose. But we often encounter those who continue to put more money at risk with their investments, endlessly chasing after more.
It is not that uncommon to come across individuals who have saved enough to live a comfortable lifestyle for the rest of their lives, even if they kept all their portfolio in cash. While we would never recommend this ultraconservative investment strategy, some in this situation will still invest very aggressively in stocks even though a lower-risk, more stable and secure portfolio would be more than enough. Why risk anything to gain something you don’t need?
So, how would you answer the question How Much Is Enough? If you are seeking a life with fewer financial burdens and stress, one focused on spending time with those you love and doing things you enjoy, then figuring this out on your own or with the help of a financial adviser could change your life. For many Americans, the amount of money needed to comfortably retire may be less than you think.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Jeff Harrell is a wealth adviser and director of portfolio management at McGill Advisors, a division of Brightworth. Jeff graduated from California State University at Sacramento with a degree in Business Administration (Finance Concentration). He formerly worked at London Pacific Advisors as a research analyst. Jeff obtained his Chartered Financial Analyst designation in 2003. He is a member of the CFA Institute and the CFA North Carolina Society.
-
Cord Cutting Could Help You Save Over $10,000 in 10 Years
How cutting the cord can save you money and how those savings can grow over time.
-
The '8-Year Rule of Social Security' — A Retirement Rule
The '8-Year Rule of Social Security' holds that it's best to be like Ike — Eisenhower, that is. The five-star General knew a thing or two about good timing.
-
You Were Planning to Retire This Year: Should You Go Ahead?
If the economic climate is making you doubt whether you should retire this year, these three questions will help you make up your mind.
-
Are You Owed Money Thanks to the SSFA? You Might Need to Do Something to Get It
The Social Security Fairness Act removed restrictions on benefits for people with government pensions. If you're one of them, don't leave money on the table. Here's how you can be proactive in claiming what you're due.
-
From Wills to Wishes: An Expert Guide to Your Estate Planning Playbook
Consider supplementing your traditional legal documents with this essential road map to guide your loved ones through the emotional and logistical details that will follow your loss.
-
Your Home + Your IRA = Your Long-Term Care Solution
If you're worried that long-term care costs will drain your retirement savings, consider a personalized retirement plan that could solve your problem.
-
I'm a Financial Planner: Retirees Should Never Do These Four Things in a Recession
Recessions are scary business, especially for retirees. They can scare even the most prepared folks into making bad moves — like these.
-
A Retirement Planner's Advice for Taking the Guesswork Out of Income Planning
Once you've saved for retirement, you'll need your nest egg to support you for as many as 30 years. For that, you need a clear income strategy, not guesswork.
-
Why Smart Retirees Are Ditching Traditional Financial Plans
Financial plans based purely on growth, like the 60/40 portfolio, are built for a different era. Today’s retirees need plans based on real-life risks and goals and that feature these four elements.
-
To My Small Business: Well, I've Been Afraid of Changin', 'Cause I've Built My Life Around You
While thinking about succession planning might feel like anticipating a landslide (here's to you, Fleetwood Mac), there are strategies you can implement to manage the uncertainty and the transition.