Dr. Kübler-Ross, who died in 2004, is best known for identifying the five stages of grief that people go through once they understand they are dying. And those stages — denial, anger, bargaining, depression and acceptance — describe perfectly my reactions when I read recently that, according to Fidelity Investments, my wife, Alison, and I will need to save eight times our current annual income to come even close to having the kind of retirement we want.
Here’s how I reacted when I got the depressing news, which came as I was assembling our financial records in order to do our taxes.
DENIAL “That figure can’t possibly be correct. Eight times annual income? How can any couple possibly put away that kind of money? They can’t. Clearly, it’s a typo. Has to be. That’s it, someone has the number wrong. Good. Now I feel better. I am not going to think about it any more.”
But, unfortunately, countless people have cited that multiple, or even more chilling ones, as a retirement savings goal. Denial was out. What replaced it?
ANGER “Those financial planners haven’t a clue what things cost in the real world! We had four kids to put through college. Then there is our home, an 1870 farmhouse that should have come with a live-in electrician, plumber and carpenter. And do you know what we are paying in property taxes? We have been conscientious about saving for retirement, and now you tell me we aren’t even close! This is America. There has to be somebody I can blame for this.”
Ranting made me feel better — and I pretended that I didn’t hear Alison mumble under her breath that I was acting like a toddler long overdue for his nap. Once I wore myself out, I figured that there was some way I could cut a deal or figure out an angle. That eight-times-income figure must contain some wiggle room.
BARGAINING “O.K. We’ll need eight times our income. Well, 7.5 would round up to 8, right? So maybe we can get away with that. And maybe I’ll just put in 60 hours a week until I’m 83. Beyond generating more money, that would cut down on retirement time. But that’s probably not going to work. Who the heck will hire me when I am 83? Well, what if we cut our current income in half? That would make the 7.5 times figure doable, although I am not quite sure how we would pay the mortgage. Or we could … . ”
When I couldn’t find any way around the problem, I was, just as Dr. Kübler-Ross predicted, miserable.
DEPRESSION “How could this have happened? I write about this stuff in my work. I know that retirement is expensive and that people are living longer than ever, which means the money has to go even further. This is awful. I should have seen this coming. I wonder how cat food tastes?”
Fortunately, I don’t have the discipline to wallow. My attention span is too short. And so, in a surprisingly short amount of time, I broke through to the other side.
ACCEPTANCE “Well, facts are facts. We are not going to have eight times our current income socked away when we finally hang it up. Probably not seven, either. But you know what? To quote that great sage William Stephen Belichick, otherwise known as the head coach of the New England Patriots, ‘It is what it is.’
“And there are some advantages in the fact that we are going to fall short. For one thing, I don’t have to agonize every day whether our retirement accounts closed up or down. The final figure will be, to quote Bill, whatever it is, and I think I am O.K. with that.
“We can’t increase our retirement savings contributions without jeopardizing how we live now — and I like how we live now. And I am not going to regret the fact that we paid for the kids to go to the colleges of their choice (although it would have been nice if even one had picked a state school).
“Yes, we have home-repair services on speed-dial, but Alison loves this place, faulty wiring and all. And the saying is on target: Happy wife, happy life.
“Given all this, I am going to be O.K. with whatever number we end up with when we retire. If we remain diligent, it looks as if we will have about six times current income. And between that and Social Security, we will make do. I am at peace with it. Effective today, I am not going to spend hours agonizing over whether to save tax-deferred or not. I am going to make one decision — with a lot of help from our accountant — and let it go.”
WHAT have I accomplished by going through these five stages of grief? Well, I have to tell you that I am happier for having reached this point. And I know that I won’t have to live on cat food, but I have tripled-checked the numbers just to make sure.
I am not arguing that you should give up on saving money for retirement. Rather, I think that you should try to save as much as you can, but that when you have done all that you humanly can do, accept it.
The good doctor was right.
Article source: http://www.nytimes.com/2013/02/10/business/yourtaxes/retirement-planning-angst-the-five-stages.html?partner=rss&emc=rss