By John Deglow

After twenty-five years in financial planning, one pattern stands out to me which often surprises others. That is, the clients who worry most about having enough money for retirement are often the ones who have the most. 

Some of the most anxious people during investment meetings are, by any reasonable measure, financially secure. They typically have comfortable homes, meaningful careers and well-funded retirement accounts. However, the burning question beneath most conversations is the same: Do I, or will I, have enough? 

It is probably the most important financial question many people ever need to answer, but for some, it goes unanswered. Frequently, they are too concerned about making “more,” without ever stopping to determine whether they have “enough.” 

We live in a culture that excels at measuring accumulation but is not so good at measuring sufficiency. Portfolio balances update in real time on your phone apps. Financial media celebrate reaching target milestones such as the first million, the second, $5 million and so on. Often, however, after reaching one goal, eyes are focused on the next target on the horizon. The implied finish line is always further down the road. 

Financial Freedom Starts Defining Your Enough

Perhaps the focus should be more about defining “enough” and less on a future arbitrary round number goal. Research on happiness consistently shows that above a certain threshold, additional wealth contributes very little to daily wellbeing. A landmark 2010 study by Princeton economists Daniel Kahneman and Angus Deaton found that emotional wellbeing tends to plateau once household income reaches a certain level (roughly $75,000 at the time, or about $110,000 – $120,000 in today’s dollars depending on location). The gains beyond that point are real, but they are diminishing. 

What drives lasting life satisfaction, study after study confirms, is not the size of the portfolio. It is clarity and purposefulness–a sense your resources are aligned with what actually matters to you. In other words, financial freedom is not a bigger number. Instead, it is the right number, unique to you and your personal situation. Knowing you have enough is the key to financial peace of mind, while avoiding the anxiety of simply wanting more. 

Calculating Your Enough

To calculate whether you have “enough,” honestly think about the following four questions as they pertain to your situation. 

What does your lifestyle actually cost? Of course there are basic needs such as food, utilities, housing and medical care. But do not forget about some of the extras. Sometimes people underestimate spending during retirement, particularly in the early, active years when travel and other discretionary spending tend to run higher than anticipated. A common guideline suggests retirees can happily live on retirement income of approximately 70% of their preretirement income, while recent studies suggest it may be trending higher. Instead of guessing, add up your typical expenses and planned retirement splurges to better estimate what’s right for you. 

How long will your retirement funds need to last? A healthy 65-year-old couple today should plan as though at least one of them will still be drawing on assets well into their late eighties or beyond. Careful consideration is needed to design an investment portfolio that provides the desired income stream that holds up to inflation for twenty-five years or more. 

What do you want to leave behind? For many clients, “enough” is not just about themselves. It includes supporting children, grandchildren, or leaving something meaningful to a church or other charitable organizations. Your legacy goals should be a part of your financial planning conversation. 

Finally, do you have sufficient cushion to weather the inevitable financial storms? Financial markets can be volatile at times. Tax laws change frequently. Healthcare costs rise unexpectedly. Unexpected home repairs can wreck a budget. Your plan needs enough cushion to absorb the inevitable financial swings without creating more anxiety during your golden years. 

Start by listing four things: your estimated annual spending during retirement, the age you want to stop working, your current assets and income sources, and the legacy you want to leave. Share those things with your financial advisor and ask them to stress-test the numbers for you. That single conversation does more to quiet financial anxiety than almost anything else. 

Keep in mind, once determined, your “enough” is not a one-time calculation. It should be revisited regularly–when income changes, when health shifts your priorities or when a new life chapter begins. The most effective financial plans are living documents, adapted to your ever-changing life, not simply filed away and forgotten. 

This is the type of conversation we are here to have with our clients, and we can help explore what financial freedom looks like for you. 

If you have not had that conversation recently, do not hesitate.  At American Trust Wealth, we can help create and monitor your retirement objectives based on your “enough,” and help you reach that goal on your timeline. The clients who seem most at peace with their finances are not necessarily the wealthiest. They’re the ones who know what they have, know what they need and know they have a plan to get there.