This Is the Key to Successful Retirement Planning

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published 22 June 2025

Here is a simple, but often difficult, concept to understand when it comes to financial planning (and, truthfully, also life): You have to control the inputs and let the output take care of itself.

All too often, I work with clients who spend too much of their time thinking, watching and worrying about the output.

As a matter of fact, I think most people spend more time focusing on the output than the input, and this is a grave mistake. Why? Because you can actually control only one of these two things.

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For instance, neither you nor I have any impact on what the markets will do today or even this year. We have no control over tariffs or geopolitical happenings. We don’t have control over interest rates either, and the list goes on.

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However, what can we control? For starters, we can control our emotions or outlook on things. We can control how we act or react to what is happening globally. More important, I think, is that we can also control the inputs at the end of the day.

When we do financial modeling for our clients, it is all about the inputs, including but not limited to:

How much do you save?
When will you retire?
How much do you spend annually?
What kind of lifestyle do you want to live?
Will there be other incomes post-retirement?

These inputs are so much more important than the outputs. Why? Simply put, because you can control them directly.

I like to focus on the long term and the averages. For instance, we know market returns average about 10% a year, and we also know that “average” means there are years when the return is higher and years when it is lower.

Thus, we can worry about the fact that markets are erratic, or we can focus on the big picture and the things we can directly influence.

Maybe there is some element of blind faith here. That said, isn’t it better to believe that what has happened over the past decades will continue to hold true than to think that whatever issue we face next is the end of capital markets as we know them?

Assumptions

When I build and review financial plans, including my own, I like to make conservative assumptions. From there, I don’t let current market conditions thwart my outlook. Rather, I focus on the things I can control — the inputs.

I know that if I keep saving XYZ dollars each month, along with paying down my debts and maxing out my 401(k) and health savings account (HSA), the current trajectory of inputs will have me sitting pretty 20 years from now.

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Now, if I viewed this with an output-only lens — as all too many of us do — I’d say, despite all my efforts, I might lose money this year. So I’m going to stop contributing to my accounts (the worst offense, by the way) because I feel like every time I do, the markets go down, and I am simply wasting money.

False, false, false!

This type of thinking is not only detrimental to your finances but also does more irreparable damage than almost any single output can do.

Averages

At the end of the day, finance is a world of averages. We have a choice about what we want to believe and what we want to focus on. Only you can decide where to put your efforts.

However, I can tell you that after decades of working closely with individuals and families to optimize their outputs, the best way I see this realized is by being highly attuned to the inputs you can control.

So if you remember to control the inputs and let the outputs take care of themselves, you’ll live a more stress-free life.

As always, stay wealthy, healthy and happy.

Financial planning and Investment advisory services offered through Diversified, LLC. Diversified is a registered investment adviser, and the registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the SEC. A copy of Diversified’s current written disclosure brochure which discusses, among other things, the firm’s business practices, services and fees, is available through the SEC’s website at: www.adviserinfo.sec.gov. Diversified, LLC does not provide tax advice and should not be relied upon for purposes of filing taxes, estimating tax liabilities or avoiding any tax or penalty imposed by law. The information provided by Diversified, LLC should not be a substitute for consulting a qualified tax advisor, accountant, or other professional concerning the application of tax law or an individual tax situation. Nothing provided on this site constitutes tax advice. Individuals should seek the advice of their own tax advisor for specific information regarding tax consequences of investments. Investments in securities entail risk and are not suitable for all investors. This site is not a recommendation nor an offer to sell (or solicitation of an offer to buy) securities in the United States or in any other jurisdiction.

Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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In March 2010, Andrew Rosen joined Diversified, bringing with him nine years of financial industry experience. As a financial planner, Andrew forges lifelong relationships with clients, coaching them through all stages of life. He has obtained his Series 6, 7 and 63, along with property/casualty and health/life insurance licenses. Andrew consistently delivers high-level, concierge service to all clients.