Discipline Necessary for Planning Retirement

Tina Haapala |

By Gary Silverman, CFP®

Today, we’ll finish up our current conversation about retirement. I once read a report that said only 35% of Americans surveyed thought that a typical middle-income family could save enough for a secure retirement. And that was up from an earlier report that stated less than 30% would be able to save enough. Millennials have even less confidence.

Now I realize that times can be tough; I understand that wages have not kept pace with inflation for years. Neither is a good reason for two-thirds of you to think that middle-income America cannot have a secure retirement.

All it takes is discipline.

That’s what makes it hard.

It takes discipline to know what it will take to afford retirement. For instance, when someone comes into my office wanting to save for retirement, I’ll ask them how much money they’ll need to live. They don’t know. Fair enough, many feel that’s similar to predicting the future. Instead, I ask about their current cash flow (or “budget”) to give us a starting point. Usually, they don’t know that either. That’s not a problem; after all, that’s probably why they are coming to me.

So I have them go home and look at their monthly spending (on recurring bills like electricity), periodic expenses (like vacations), and longer-term savings needs (like the next car). Quite a few don’t come back. The assignment is too hard, too boring, or too time-consuming.

It takes discipline to invest for the long-term. The markets go up, the markets go down. People get euphoric, and then they panic (especially if they are going it alone). Part of the reason--they didn’t take the time to learn about what their investments were in. Did they understand that a short-term loss was not just possible, but likely? Did they prepare themselves for it?

Or did they, like so many others, put long-term money in a short-term investment and short-term money in a long-term investment? Were they so surprised by the gyrations of the markets that they sold at the worst possible time? Most people’s savings and investment plans unravel because, frankly, they don’t have a plan.

It takes discipline to put the money aside. It takes discipline to put aside rationalization, too. So many times, I’ve heard that an SUV was not a want but a need; it’s just not safe to be out on the road without one. I’ve also learned that a vacation in the Caribbean is not just a dream, but a family health necessity.

Unfortunately, I rarely hear that putting money away for retirement is essential or a necessity.

Certainly, there are families, including middle-income families, who truly cannot save for a secure retirement. My point is those are well below two-thirds of the potential savers out there. The rest who believe that they cannot just don’t have the discipline to create and follow a plan.

Here’s hoping that you are not among them.


Gary Silverman, CFP® is the founder of Personal Money Planning, LLC, a Wichita Falls retirement planning and investment management firm and author of Real World Investing