“The marathon won’t be cheated.” That’s what I’ve told aspiring runners for years. And in the 2019 Boston Marathon, I proved the point. I earned my second “Boston” finishers medal, but also had my slowest race ever, taking over four hours to finish the 26.2 miles from Hopkinton to Copley Square in Boston.
It wasn’t an outcome for which I’d hoped but it was precisely the outcome for which I’d physically prepared. Life got in the way of my training, starting about nine months before the race. I made conscious choices to skimp on the hard workouts. I didn’t run fast enough, hard enough, long enough, often enough. And so, I got the outcome that I earned.
When we encounter clients whose retirement hopes don’t match their preparation, our first mission is to get those two factors aligned. Some have saved way more than needed and can start retirement earlier or reasonably afford a better one than they’d anticipated. More often, like my training for Boston in 2019, life choices impacted the saving or the expected lifestyle, and we must help them make the best of the situation.
While spending too much and saving too little gets the blame, the truth is that starting too late is often the underlying cause. Saving 12% of earned income while working, it takes about 35 years or more to accumulate enough assets to maintain the standard of living1 during retirement.
Also contributing to my racing disappointment, I didn’t follow my own guidance for managing my energy during a race. I learned years ago to go out slow so that my body burned mostly fats for energy, rather than sugars. I felt very good early on, and while I kept the pace on target I forgot to check my heart rate until mile nine. It was in the anaerobic range and I already knew I’d “bonk” later in the race. The first twinges of cramping hit during mile 16, and by mile 22, I was walking more than running.
Retirees who choose to spend more than they should during the early, “go-go” retirement years face a potential “bonking” of their retirement in the later “slow-go” or “no-go” years, by exhausting their liquid retirement funds. But because no one is promised a tomorrow, we often hear “I want to enjoy it while I’m able.”
We routinely monitor our clients’ spending pace so that they can anticipate if they are likely to “bonk” their retirement by outliving their liquid assets. They’ll still get to the finish line, but like my race, it might get harder at the end, if they chose to over-indulge at retirement’s start.
Weather plays a big role in marathon times. It started with perfect conditions, but got hot about half way in, then turned into a storm, and was raining at the finish. Similarly, investment markets provide a constantly changing environment. It’s why we constantly monitor client’s investments, making adjustments as needed.
Most important, with the marathon there is always another chance to have a better outcome. With retirement, not so much. Be sure to find a good coach before it’s too late, and if you’re looking for one, reach out to Enduring Wealth Advisors®, where we pace our clients through their financial milestones so that they can understand the consequences of short term decisions on the pursuit of long run goals.
At Enduring Wealth Advisors, we’re focused on the long run!
1Assumes 7% real rate of return, gross retirement income is 80% of working gross (no longer accumulating 12% per year or paying 7.65% Social Security taxes). More aggressive saving and accounting for other retirement income benefits can improve the projections. Every case is unique.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.