You Might Be Saving Too MUCH for Retirement!

No! You’re not.

I stumbled on this year old article and was intrigued, especially given the real problem is lack of sufficient retirement savings and the fact I push for a 100% base income replacement target.

They key word here is comfortable. How each of us defines comfortable varies greatly. I define it as living the way you want to live and not fretting about money each month. It also means one is prepared to handle financial emergencies of all types.

I submit that you cannot do that on half the income you had just before working – unless of course, you have a million dollars stashed away in addition to an income stream.

Why Are People Saving Too Much?

There are a variety of reasons why people save too much for retirement.

Erroneous rules of thumb

For years, the rule of thumb has been to replace 70 to 80% of your working wages to live comfortably in retirement. However, Blanchett’s analysis found that some retirees can actually live quite comfortably on a little more than half of their working income and inflation has a much smaller effect on retiree spending.

So, who is right? Well, one of the difficulties with figuring out how much to save for retirement is wading through the different kinds of advice.  So much of what you read is a one-size-fits-all formula with so many unknowns and a lot that is not relevant to YOU. Figure out how much YOU need.

Source: You Might Be Saving Too MUCH for Retirement!


  1. The article assumptions will give you all the answers you need on this question.

    Will inflation be low or high? – INFLATION WILL ALWAYS BE HIGH AT SOME POINT
    What will your rate of return be? – NEVER WILL BE HIGH ENOUGH
    Will you require long term care? – YOU CAN”T AFFORD IT SO PRAY THAT YOU DON”T NEED IT
    What unexpected expenses might you encounter? – IF I KNEW THEY WOULD NOT BE UNEXPECT AND I CAN PUT MONEY ASIDE FOR THAT EXPENSE

    The answer is you can never save too much for retirement, only too little. Now, of course, if you can’t afford to eat before you retire, then saving for retirement might be too much and expect to live the same way in retirement if you do not save. This mean you have to do something different like changing jobs if you are physically able.

    I wished that I could of saved more in my early working years but with a young family it was very hard to do. But I still saved and increased my savings every year until I retired.


  2. I had read this article previously and it struck a chord in me since I had one sibling who lived on a shoestring and years ago one of my lunch buddies at work was the same way. Couldn’t part with a nickle. Drove ancient used cars and spent for nothing that wasn’t absolutely necessary.

    My sibling has passed on and left money to children and grandkids and I lost track of my old lunch buddy but I’m sure if he is still going, it is in a 1985 Honda Accord he was wringing the last mile out of. Did they save too much, yes they did, was it in the name of retirement, I don’t think so since in both cases, there was no concept of accumulating retirement funds but simply not spending now for the sake of not spending now or ever.

    I don’t really count these cases as examples of retirement saving and spending. Income replacement ratios are a different subject than inability to spend for enjoyment and living.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s