When you turn to a retirement calculator to plan your future it’s wise to remember that this method is only part of a bigger solution. Finding that elusive sense of well-being is a bit more involved than relying on a simple formula. The story goes like this: “ invest well, do your sums, retire early and live a rich and rewarding life”. Sounds pretty smart but there are some dangerous assumptions at play for the uninitiated. There will never be a magic formula that suits everyone. We are by nature unique and the variables of our individual lives are beyond any calculation. Punching information into an algorithm is at best a wish list for a possible future lifestyle that you’d like to achieve. It’s important to understand that when projecting your future needs these calculators are based on historical investment returns, data that firmly belongs in the past. Given Covid-19 is in the process of reshaping our economies it’s reasonable to assume that if future investment returns are now changing then any calculations regarding your future liveable income could turn out to be a little inaccurate, regardless of how sophisticated you believe the advice to be.

Do you already have your ‘date with destiny’ calculated by an algorithm? The typical financial modelling doesn’t account for happiness at all, do you know that happy couples can outlive the ‘statistical average age of death’’ by around 10 years. Could that assumed algorithm potentially throw your retirement calculations out the window?. The truth is no matter how well you plan your budgeting it will be wrong. There are always unforeseen circumstances that ultimately determine the final outcome; i.e your quality of lifestyle in retirement. The way you react to these challenges sits squarely in the unknown future.

If we are being real with ourselves then we know that pushing numbers into a calculator to create a sense of future safety will only ever reveal some of the answers. This financial mirage masks a much more complicated reality that we must face and when retirement forums focus solely on ‘how much money do I need to retire’ they are missing the point entirely.

Having a benchmark for your savings plan is essential and in another post here, I have discussed the ‘rule of thirds’ as one way of achieving that. Creating a plan well ahead of time is far better than having no goals at all. Planning is critical and necessary. The problem we face is that no calculator on earth can prevent us from getting angry when unexpected obstacles prevent us from getting what we want. Frustration and depression can linger close to the surface and any happiness can be frittered away by our constant complaining and no real change occurs to the difficulties that we face. Fretting over the small stuff in life seems to be a uniquely first-world problem and endemic across western culture.

So what’s the solution? Even if your calculations do work, can this financial algorithm guarantee a deeper understanding of the human condition i.e. your problems? It’s one piece of the puzzle for sure, an important one, but we’ve been fooled into believing it’s the whole story. Even with a vault of money how can you still be bored, why does inertia set in when you least expect it and, are constant new experiences giving you the contentment outcomes you’re looking for?

It appears that financial advice skirts around these issues and if we are upfront with ourselves then we must also understand why these desires and the accompanying emotional turmoil continue to arise.  Mastery of life is recognising that we are responsible for our own position, we alone are responsible for our emotional, financial and spiritual well-being, there is no one else. This is regardless of whether you live in a mansion or a cold single room rented apartment. In the long march through life, we must be ever mindful and very careful not to arrive at the end only to find ourselves depleted and weary of trying to find our purpose in things, particularly things that are here one minute and gone the next. This is the most important calculation to consider.

Confronting the reality of the future is an essential first step if we are to recover hope. We are at the beginning of massive social change, not nearing its end. Covid-19 has shown us that one of the most important protections we can have is owning your own home – creating a safe place to retreat too when the going gets tough and by all accounts, it’s going to be getting tough again. If folks have any doubt about getting rid of debt as their best financial strategy then this pandemic has shown us that. The calculation to focus on is retiring with zero debt, this will surely equal your freedom. Sincerity is now the only currency worth pursuing and sincerity is doing what you intended to do right from the very beginning. Don’t let others get you sidetracked with a fistful of colourful balloons. Remaining flexible is key and carrying bank debt into retirement will kill that completely, just when you thought everything was going ok.