The chart below comes from J.P. Morgan’s guide to retirement.
I like how they frame retirement in terms of things you have total control over, things you have some control over, and things you have no control over.
The items they’ve identified as out of your control are pretty cut and dried. Markets owe us nothing. They don’t know when we’re retiring and they’re certainly not there to bail you out.
They claim you have total control over over saving and spending, which I’ll quibble with just a bit, not because I necessarily disagree, but because I feel like disagreeing.
At the end of the day, which is a phrase I don’t care for, but seems appropriate here, people are responsible for how much they spend. But I find the “just save more money” message to be lacking in empathy. First of all, saving money isn’t an option for far too many people. And for the people fortunate enough to cover their bills, reality doesn’t adhere to simple rules of thumb.
I’m of the opinion, which I don’t think is controversial, that we make money to spend it. This isn’t to say you shouldn’t save so that your future self can spend, but it’s easy to see how people focus on today and lose sight of tomorrow.
Saving money is difficult, but fortunately the ways in which we can save has never been easier.
When our parents wanted to put some money away, they had to go to the bank, or I guess they could call, I don’t know, but the point is they had to put in real effort to transfer money from checking to savings. Now, we can do this while we sleep.
Every two weeks I have money automatically pulled from my checking account and transferred into a high-yield savings account (I use Marcus). This way I don’t spend and save what’s left over, I save and spend what’s left over.
Saving money is mostly in our control, but like everything in life worth doing, you have to work on it. The good news is it’s never required less work. So after you read this, hit this page and open an account if you haven’t done so already. You’ll thank yourself later.