Why it is Hard to Save for Retirement

I was recently attending a leadership event put on by my employer which featured a interesting guest speaker.  While I normally don’t find leadership training particularly interesting, I did find this speaker’s one particular point very illuminating on the problem of why people don’t save for retirement or any other long term goal.  His advice was merely “people can’t commit to what they can’t see.’ To me this seemed obvious, but I had never articulated it here on the blog.

Basically if people can’t visualize it, the ability to commit to a goal is difficult.  Hence this is where long term goals are difficult to save for including retirement.  We don’t have a clear picture in our heads of what we are trying to achieve.  For example, I have a goal to pay off the rest of my mortgage by the end of 2012.  What motivates me to keep working towards this goal isn’t so much the numbers or the logic of the decision, but rather a picture in my head.  In my vision of what this will be like I have a party to celebrate where good friends and family come over.  We drink wine, eat some appetizers, and I’m in a extremely happy mood while I give a little speech and thank everyone for coming out and they cheer our good fortune (aka the plan).  It’s not a complex vision, but I do have one part firmly set in my mind: the feeling of accomplishment.

Yet that vision is what most people can’t even tell you about in all that much detail with regards to retirement plans.  What are you working towards?  What will your days be like?  What will you do to provide a sense of accomplishment?  We have no vision of the event so committing to getting there is difficult to do without the vision to provide emotional motivation to keep going when things are tough.

Not surprisingly I do have a little vision in my head of the ‘perfect’ retirement day.  While the details shift around a little bit the general gist of the story goes something like this.

I wake about 7:30am and the proceed to do a little yoga, eat some breakfast and drink coffee for a while while I lounge around reading the news.  By 9am, I’ve grown restless so I’ve dressed and sit down at my computer to write in the library/den.  I split my morning writing into two periods: one for a paid project or more commercial writing and the other for a fun project like my latest novel.  Selling the novel is irrelevant since I do it for my enjoyment and not to make any money at it.

By noon, my wife and I sit down for lunch together and discuss our plans for the rest of the day.  We typically split our afternoons into personal projects and doing something together.  Today our plans include me working on a simple wood bench for our son’s apartment.  I’m making it more to have a place to sit and take off my boots than for him.  I’m not that good at woodworking so it isn’t a masterpiece, but I enjoy it.  Later that afternoon, about 3pm,  I meet my wife at the library where we browse the latest books and check out this week’s stack of books to read.  Then we go home and cook a simple meal and talk about our day.  Then that evening friends stop by and we visit over a pot of tea and perhaps if we are in the mood play a game of cards, a board game or something that doesn’t distract you too much from chatting.  Then I read for a while after the guests leave and then head of to bed.

You will notice my vision doesn’t involve me a in another country, have any sports cars or sailboats or giant houses.  It’s largely like my life right now, but just more time to do things I like to do.  You might have also noticed it did contain a little paid work, but perhaps only an hour and a half.  Which was mainly to help pay for the other hobbies, I don’t really need the money.

The point of this little story isn’t to say what you should do, but you should have a daydream in your head to work towards.  So go ahead and take some time and dream.  What would my day be like if I didn’t have to work?

6 thoughts on “Why it is Hard to Save for Retirement”

  1. Your ideal retirement day is very similar to what my “sabbatical day” is actually like right now in real life. Which is very like how I imagined it would be years ago. It was more the feeling of relaxed and gentle progress and enjoyment that I focused on than whatever I physically DID for an activity though. Basically not running around like a chicken with its head cut off.

  2. “Retirement has been a discovery of beauty for me. I never had the time before to notice the beauty of my grandkids, my wife, the tree outside my very own front door. And, the beauty of time itself.” ~Hartman Jule

  3. I have two different typical days in mind for retirement. Once very much like yours, except I intend to take some general interest courses at my local university – film studies, wine appreciation etc. I also plan to take many of the 2hr cooking workshops offered regularly at my grocery store. I also want to take a course on calligraphy, and maybe some photography classes.

    Having the luxury of learning for the sake of expanding your mind and skills with no particular career gain in mind would be pure joy to me.

  4. Forgot to add that the second version of a typical retirement day, involves me wandering the local market or galleries, or just people watching from a sidewalk cafe of some city in Europe. I have plans to travel extensively, but frugally, living like a local rather than racing from one costly “must” see attraction to another. If all goes according to plan I’d like to spend 2-3 months per year on the road.

  5. In my 7 years (2001-2008) of working part-time, I was basically living two different (weekday) daily lives. One was the lousy midweek day of working which included the long, tiring commute on the trains after getting up early and hoping to get to my train without becoming too nauseous. It included getting home between 6 and 7 PM and not being able to do much that evening beyond visiting my ladyfriend (who was worn out from her workday) because I was worn out.

    The other midweek day was a much more calm, pleasant one. It included sleeping in, having a leisurely breakfast, usually doing some of my midday volunteer work tasks or personal local errands, having a better lunch than at the lousy food court near my office, taking a nice afternoon nap, then going out to one of my square dance clubs or to my friend’s place (or he comes to my place) for an evening of Scrabble.

    This sharp contrast between these two types of days gave me strong incentive to totally eliminate the lousy one and have only the better one. And in late 2008, just about 3 years ago, I finally made that happen. 🙂

  6. Great post Tim, one of my favorites in a while. Having just finished your book while on holidays in the Baja, I know now that I am on track to retire at, or before, 45. The section at the end of the book with all the calculations for accumulation and draw down confirmed this for me. Very well done book. It should be a bible of sorts for those of us who are pursuing this dream.

    As for daydreaming about what my days would be like after ER, I plead guilty on this count. 🙂 The biggest goal I have immediatlely after ER is to build a cottage on my west coast island property. This the place I will be spending the majority of my post working life. I confess to not having the necessary skills to build it, but with so much more time, I am confident I can learn the basics, and hire professionals for the trickier bits. I love the challenge it presents.

    I envision my typical ER day to begin with morning coffee on the deck of my cottage. I have always been an early riser, so I will witness the sun emerge from the Strait of Georgia, bathing the towering douglas firs with its orange light. Listening to the birds, I am in no rush to do anything except take in the scene before me. Maybe I am reading a book or a digital newspaper on my laptop. Eventually I look down and see the pleading look of my dog (my current life doesn’t allow for a dog)- he wants to go on our favorite hike it seems. Later in the day, I wander down to the beach where my row boat is… I arrange pieces of driftwood to fashion a makeshift boat lauch down the gravel slope to the waters edge. With the boat in the water I row out perhaps 200m, tie up to a kelp bed to keep the boat from drifting in the current. With some luck (and some skill) I catch some codfish or perhaps a salmon for dinner… there is great clam beds and crabbing off shore as well. Then there is the garden to tend, blackberries to pick and make jams or pies. I don’t intend to have to spend much on food in retirement, especially protein.

    I could go on and on, but you can get an idea of the existence I am striving for…

    Tim, this post was a great idea… visualization is indeed a powerful motivator.

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