Are You Saving Too Much For Your Retirement?

When planning for retirement, many people worry about not having enough money saved up. But what about saving too much? It’s possible to end up with more than you need, which might leave you financially secure but missing out on enjoying life to the fullest.

Here we’ll give you our top tips on how to cut over saving habits and find the right balance between living in the moment and preparing for the future.

Understanding Over Saving

Over saving happens when people save much more money than they need for a comfortable retirement. Those who over save are often guilty of living a restricted lifestyle leading up to retirement – essentially saving for a rainy day that never comes.

It’s important to ask ourselves, “What am I saving for?”. Is it just the high-cost items like holidays or a new home, or is there more to my financial goals?

The Consequences of Over Saving

Living below your means to the extreme can mean missing out on life’s pleasures — a consequence of being overly frugal. This often leads to your beneficiaries being able to enjoy all the things you worked hard for, rather than you. While this is a generous gesture, it’s important to ensure you also get to enjoy the money you’ve saved in your pensions throughout your career.

Why Do People Over Save?

People can over save for retirement for lots of different reasons, with the main one being fear of the great unknown. Worrying about not having enough or running out of money in the future is an understandable concern. And there’s often the feeling of needing to work ‘one more year’ for absolute security. This mentality becomes ingrained over time and prevents people from saving sensibly and enjoying the money they earn.

Assessing Your True Retirement Needs

To avoid the trap of over saving, you need to decide what ‘enough’ really looks like for you. You can use tools like our Retirement Readiness Quiz to help you get a better sense of your current position and how prepared you are.

Knowing how much money is enough to retire involves evaluating your desired lifestyle, anticipated health needs, and what your big dreams are for the future. This could be travelling or focusing on your hobbies – basically whatever you look forward to being able to do in retirement.

Tips for Balancing Saving and Spending

For those fortunate enough to have more than enough, consider these tips to prevent over saving:

Enjoy Your Retirement and Life Leading Up To It:

Keep your happiness at the forefront of your financial goals. Think about what makes you happy and align your goals to reflect that.

For example, if taking a city break brings you joy, don’t stress about saving for decades ahead. It’s important to understand your needs both now and in the future to plan effectively and ensure long-term happiness.

It’s important that you take part in activities that you love. If you turn down experiences or hobbies that interest you out of fear of insufficient retirement funds, you’re sacrificing your immediate happiness for a future that is uncertain.

The key is to strike the right balance between living and saving.

Create a Personalised Retirement Plan:

To avoid putting yourself in a position of over saving, you need a plan.

A proper financial plan will consider any assets that you have now, whether that be pensions, savings and investments, your current costs and what you’ll expect to pay in the future, including care fees.

Seeking financial advice is the first step towards retiring with confidence and clarity. At Joslin Rhodes, we can help you figure out exactly when you’ll need more or less money, allowing you to approach your retirement with certainty and peace of mind.

And for many over savers, a financial plan can reveal that you might be able to retire earlier than you think!

Consider the What’s and the Why’s:

With any good retirement plan, you need to ask yourself the big questions such as WHAT you are saving money for and WHY. Some examples include:

• What would a great retirement actually look like?
• What activities are you interested in?
• What holidays do you enjoy to unwind?
• What is important to you in life?

Having goals besides just financial accumulation allows you to still live your life whilst saving for the last chapter.

Don’t be Afraid to Live Today and Plan for Tomorrow:

Balancing between saving for your future and enjoying today is wise and necessary. Retirement planning is not only about securing your future but also about prioritising your happiness in the present day.