You might imagine that we work with quite a few people who are in the run up to their retirement years. So, what do you think is the first thing people consider when thinking about their retirement? Yes, you got it — it’s their money. Yet, according to a Bankrate survey, 61 percent of Americans don’t know how much money they’ll need to save for retirement.

We’ve been advising people on retirement for a few decades. Our experience has shown that there is a common misconception out there about retirement. That misconception is that it’s all about the money.

If you were able to be a fly on the wall during one of our retirement planning meetings, you would hear us ask little in the first few meetings about money. While the money is important, without knowing what it is you want to do in retirement, it would be very difficult to confirm how much money you’ll need.

We like the way the MIT Age-Lab has considered retirement and also the life phases before retirement. We find that—even financially—they tie together in important ways. Joseph Coughlin, Founder and Director of the MIT Age-Lab and author of The Longevity Economy considers people’s lives in these segments; each one being approximately 8,000 days long:

Learning — birth through college;

Growing — begin professional career, relationship/marriage, start young family from your 20s to mid-40s;

Maturing — this one begins at what we often call the mid-life crisis years and ends near retirement—prime career years, bigger homes, raising older children from mid-40s to mid- 60; and

Exploring — retirement journey beginning mid-60s.

So, as you think about retirement, consider how you made it through each of the 8,000 day periods in your life so far. In the Learning days, it was Mom, Dad, or some other significant role model in your life who helped you to know what to do. In the Growing days, you made decisions based on what you had learned, by that point, about yourself. With relationships, perhaps marriage, kids, career, this period probably felt like it went quickly. Then, the Maturing days: age 40’s to mid-60’s. It is somewhere within this 8,000 days that you truly plan for your retirement. Yet it is the Exploring (final 8,000 + days of your life) that, so often, people do not give serious enough consideration. Often, it’s easier to define day 1 through day 300, but what about day 3000?

As you are considering retirement and how much money you’ll need, consider first, what you want to be doing on day 1 of that last 8,000 + days and also what day 3,000 might look like. There’s a lot to consider in the way of costs in retirement…lifestyle, health, income, taxes, legacy, longevity.

Take the time to contemplate, discuss—and even write down—how you envision your longevity lifestyle in retirement. With this information, you’ll have a better understanding of how much money you’ll actually need and be able to set a plan in motion.

Important Note: 

Nothing is intended to be, and should not be taken to be, investment, accounting, tax or legal advice. If you would like investment, accounting, tax or legal advice, you should consult with your own financial advisors, accountants or attorneys regarding your individual circumstances and needs. No advice may be rendered by Lenity Financial, Inc. unless a client service agreement is in place.