The Five Stages of Retirement Planning Angst

I HAVEN’T a clue what kind of psychiatrist Elisabeth Kübler-Ross was. But I do
know she was a terrific financial planner.

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

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

“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.




Published: February 9, 2013