I was recently part of a book study with a group of men who happened to all be younger than me. During a discussion, one of them candidly commented in passing that he thinks too much about his retirement savings.
It may have been a confession of sorts, but there wasn't time to discuss it further. (And no one in the group piped up with, "Really? I hardly think about that at all!")
My friend is a humble, godly man—a husband, father, and servant in our local church and community. He works hard and lives below his means. He is generous with his time and his money. He saves consistently and, as far as I know, in reasonable amounts. So why would he say that he dwells too much on his retirement savings?
I haven't discussed this with him individually, so I don't know exactly. Those who are middle-aged and older have probably experienced this at one time or another. We think (and perhaps, dream) about what it will be like in retirement. We check the stock market and our 401(k) and IRA balances. We tinker with our investments. And we do these things quite often. (I read somewhere that the average person thinks about retirement at least three times a week.)
Thinking and planning are good
God wants us to think about our money—but he wants us to think about it biblically. We also need to think about planning for retirement, and that includes our retirement savings accounts. Therefore, if saving for retirement is wise, then it isn't wrong to think about our savings.
We need to think about how much to save, how to invest, and how much is "enough." We also need to think about our asset allocation, how to eventually convert our savings into income, and how to make it last for a possibly long time in retirement.
We can't do any of these things unless we think about them. And sometimes, we will have to give them a lot of careful thought.
Then what's the problem?
As I mentioned, I know my friend pretty well. I think the reason he made that comment is that he wanted to be honest about a struggle he was having. Although it's possible, I doubt that he was struggling with his retirement savings account balance (though it may have been in his thoughts). Instead, he may be struggling with his heart attitude toward it. And that, my friends, is something we can all probably relate to.
But why do we think about our retirement savings more than is necessary to plan well? Here are a few thoughts:
1. We can be overly pre-occupied with retirement.
We are a country obsessed with retirement, and this could be due to our general desire to do something other than work. According to a recent Gallup study, about two-thirds of us are disengaged at work, or worse. Another 2017 study found that over 58% of prospective retirees said it was "important or very important" to them to retire because "they wanted to do other things."
The freedom to "do other things" necessitates reaching our "magic number"—the amount we need to have in savings to be able to retire—so we begin to think more and more about our number and how close we are to achieving it. It's good to have a savings goal—a reasonable estimate of what you will need to have saved to retire. We can, however, become too fixated on it.
2. We can get too concerned about how much we have saved.
An obsession with our "magic number" can tempt us to become anxious or fearful. A survey by the financial firm Primerica found that 43% of Americans say that their number one fear is not saving enough for retirement; only 25% percent said that they fear death the most.
We may fear that we aren't saving enough, or that we haven't saved enough to retire when we want to (especially if the goal is to extricate oneself from an oppressive work environment). No one that I know wants to live in poverty in retirement. Therefore, due to the looming threats of inflation, taxes, poor health, scams, etc., it is easy to become nervous and even fretful about our financial futures.
Then there is the opposite problem. Some Christians with significant savings can feel guilty. They wonder, "have I saved too much?". They are (perhaps rightfully so) concerned that instead of saving enough to reasonably maintain some semblance of their pre-retirement lifestyle, they are going way beyond it.
The Bible contains many, many warnings to the rich. And most believers don't want to be like the rich fool in Luke 12. We know that those who desire to be rich will run into trouble because the love of money is the root of all kinds of evil (1Tim.6:10). However, not everyone who has saved for retirement is in love with money. Some amount of retirement savings can be a helpful blessing in later life that can we can use for our good, the good of others, and the glory of God.
3. We are afraid we might lose our savings.
Regardless of whether we have saved a little or a lot, we may fear that it will be wiped out by a catastrophic economic or geopolitical event, robbing us of our future financial security. Psychologists and economists call this "loss aversion," and it tends to be a significant factor in how we think about our finances, especially our savings. Research has consistently shown that the emotional fear of loss is twice a powerful as the pleasure of expected gains. And, as we all know, fear is a very powerful emotion.
Many people will end up with a pretty large account balance after saving and investing for a lifetime. According to data from the Federal Reserve Survey of Consumer Finances, the average savings for retirees in 2019 between the ages of 67 to 74 is $358,000. The median (which is a more accurate reflection of things—half have more, and half have less) is $126,000. (By the way, both of these falls short of what many experts say many families will need.) A large number (50%) have more than $126,000 saved. And once we have amassed a nice little nest egg, and especially as we get closer to spending from it in retirement, the fear of loss starts to creep in.
It seems counter-intuitive that those who have saved a reasonable sum could become fearful since most people think that having more savings will make them less so. But it appears that we are inclined to worry about money whether we have a lot or a little.
4. We struggle with contentment.
Almost paradoxically, as our savings grow, we can still be tempted not to be content with what we have. It seems that the more we get, the more we want.
John D. Rockefeller, once one of the richest men in the world, was asked, "how much is enough?", to which he answered, "just a little more." We may need to save more to reach a reasonable goal, but that is different than not being content with what we have. What if we are not able to reach the goal, will it still be "enough" so that we will be satisfied and trust God for the rest?
A lack of contentment can make us uneasy, always working, hoping, and grasping for more. It can wreak havoc on our savings, and also our lives. We will not be resting in what God has provided; we will not be at peace. Instead, we will always be striving, often in our own strength. Enough will never be sufficient; we will still want more and more.
5. We doubt our plan.
A lot of people have nagging doubts about their retirement "plan." By that, I mean how they are saving and investing for retirement. We can become unsure about our plan if we believe we're saving too much or too little (as discussed above), and we can get tripped up by all of the different investment options out there.
Every time we see an article that says something like "5 stocks you should add to your retirement portfolio now!"; or, "Avoid the coming recession by de-risking your portfolio!", we can be tempted to start re-thinking things; we do more research, read more articles, run more numbers, etc. We may even jump online, access our account, and start "doing stuff."
Please don't get me wrong—I think it's appropriate to reassess your investment strategy periodically. Where things go off the rails is when we feel compelled to react every time we see or hear something that sounds better than what we are already doing. All of a sudden, we have a different plan, all because someone seemed to have a better idea.
What can we do about it?
Our tendency to think too much about our savings can be a challenge to deal with. We can try to muster the will power to be less focused on our savings in unhealthy (and ungodly) ways, but we will likely fail. There is only one way to change: We have to first think biblically about money and savings and the part it plays in our lives. Then, our hearts can be changed by the truth of the Word and through the power of the Holy Spirit as we humbly submit ourselves to God.
Here are some basic (but not necessarily easy) things that we can take from God's Word and apply to help us change:
1. Trust in God, not savings.
Whoever trusts in his riches will fall, but the righteous will flourish like a green leaf. (Proverbs 11:28, ESV)
God loves us and he cares about us, including our savings and our futures. We can trust in him, rather than riches. As our savings increase, we can be tempted to view them as our primary source of security. Even if we have little, we can become fearful, also because we are trusting in savings rather than God. We can only find real security in God himself.
2. Trade "if only more" for "enough."
Set your minds on things that are above, not on things that are on earth. (Colossians 3:2, ESV)
The primary aim of saving for retirement is to have enough money to live on when you eventually retire. That implies there is a reasonable savings goal you can shoot for. If you are on track to meet the goal or have already exceeded it, then there is no reason to stay focused on it. Set your heart on something else.
3. Stop trying to control the things you can't control.
And we know that for those who love God all things work together for good, for those who are called according to his purpose. (Romans 8:28, ESV)
There are things we can do to plan for the future wisely, and saving is one of them. And once we have something saved, avoiding loss (especially permanently) is a valid concern. But it's important to remember that there are a LOT of things that are totally outside our control. We can't control the economy, inflation, geopolitical events, politics, or much of anything else. However, God is in control, and we can trust him to work all things out for our good and his glory.
4. Practice gratitude for what you have.
Give thanks in all circumstances; for this is the will of God in Christ Jesus for you. (1 Thessalonians 5:18, ESV)
Because we are prone to compare ourselves to others, or to how much the media or financial professionals say we should have saved for retirement, we need to learn to practice gratitude for whatever God has provided to us. That does not mean that we should not try to save more if we need to; it means we focus on what God has blessed us with instead of what we lack.
The problem, of course, is this doesn't come naturally. If our retirement savings goal is $750k, and we have $500k, we are more inclined to think of the $250K we don't have than the $500K we do. We focus on what we lack instead of what we've been given.
5. Revisit your plan and make sure you're comfortable with it.
My son, do not let wisdom and understanding out of your sight, preserve sound judgment and discretion. (Proverbs 3:21, ESV)
Since most retirement investors are in it for the long-term, they don't need to check their account balance regularly. If you have a solid plan and a well-diversified portfolio with low-cost, high-quality investments, you may only need to check it once and twice a year. (Most retirement professional suggest rebalancing once a year.) You can also revisit your risk tolerance and check your stocks versus bonds mix. You also need to check to verify trades or requested personal data or profile changes, but these happen infrequently.
Doing these things while resting in the love and promises of provision by our Heavenly Father will help us to think rightly about our savings and retirement plans.