Are You Saving Too Much?

Maybe. How do you know? If you have not developed a detailed plan that looks at all the critical factors – projected expenses, years until retirement, current savings/investments, projected return on investments, projected sources of passive income, current savings rate, and withdrawal rate – it’s possible. In fact, if you have not developed a detailed plan there is almost no chance you are saving the right amount; you are saving too little or too much.

Is it possible to save too much? Of course. We’re all familiar with the idea of finding balance. Ideally, you are currently living life to the fullest and have an adequate plan in place to ensure your future is financially secure. If you are saving more than you need in that future, you are not spending money today that could be spent on activities that bring you pleasure.

Financial Balance

One of the things I discuss ad nauseam with my wife and some friends is the idea of finding financial balance; that sweet spot between living for today and preparing for tomorrow. Over the years, as a result of these conversations and thoughtful reassessments, I have made adjustments to the amount of planned retirement income and hence, the money we are currently saving/investing, to reach our goal.

In Many Paths Lead to Financial Freedom, I noted that my wife and I are fortunate in that when we retire at age 60, I project we won’t even need the money in our retirement accounts. We should be positioned to live a very comfortable life on three employment pensions, the one we’re currently receiving and the two we’ll receive from our current employers at 60. And it gets even better at age 65, when we plan to start drawing our Social Security pensions.

Does that mean we will stop making contributions to our defined contribution plans? No. However, we are aware that we are in a position where we can contribute less, perhaps spend more on activities today or provide financial assistance to family members if necessary, without impacting our financial future.


Considering that detailed plan I mentioned earlier, I noted your projected expenses is one factor. If you structure your plan so that you go into retirement mortgage free and without credit card debt, it’s possible that you could live quite comfortably on a modest level of income.

When I consider how much I might need in retirement, I don’t need to look very far to get an idea. Even though my mother has a mortgage – her and my father, who passed last year, relocated to Arizona a few years ago and purchased a new home – she lives quite comfortably, travels fairly frequently and is engaged in numerous local activities in the community. In the seven years since she retired, her lifestyle has remained the same as her Social Security pension, a pension from a previous employer, and some savings have proven quite adequate.

Develop and manage your plan wisely; and strike the balance that will allow you to live life today and enjoy it in retirement. Stay savvy, my friends.

Blogger-in-Chief here at RetirementSavvy and author of Sin City Greed, Cream City Hustle and RENDEZVOUS WITH RETIREMENT: A Guide to Getting Fiscally Fit.


  1. Finding balance is something we continue to battle with – so far the best technique for me is to never feel guilty about spending money on things I truly enjoy and work to cut the rest down or out.

    • Great approach. At the end of the day the entire point of money is to put yourself in a position to have choices and to engage in the things that bring you pleasure.

      Thanks for stopping by and sharing your thoughts, my friend.

  2. Great article JM and as usual good feedback as well. Mrs C and I are finding out just how tough it is to start spending our hard earned savings as opposed to watching “the number” grow over the past 25 years. As with you and KM, we have a number of revenue streams that will more than cover our monthly living expenses and have no debt. Even with this security blanket, the thought of touching our “Ark of the covenant” nest egg is a tough nut to crack! I think it’s safe to say that Mrs C and I are woefully out of balance………

    • No doubt it has to be tough modifying the habits and practices you’ve cultivated over the last 25 years. It certainly won’t happen overnight. At the end of the day, I believe the answer is to take a hard look at the numbers and determine what you need – trust your calculations – to live comfortably (maybe add 15 – 20% as a cushion) and then start developing a new habit … loosening the purse strings and spending the money you worked hard to accrue. After all, there is no value in hoarding it and you certainly can’t take it with you. Well technically, I guess you can, but then it just kind of sits there.

      Thanks for stopping by, amigo and sharing your experience. KM and I will certainly be looking to learn lessons from you and KC as we approach our own retirement. Looking forward to dinner next weekend!

  3. Nice post, James! Finding the right balance is the right thing to do and it needs to be reviewed / adjusted on an annual basis.

    When I was in my mid 20’s, I had a magic number – aka how much I should have in my 401k at retirement. Now I am in my late 30’s – that magic number has gone up quite a bit :). However, I am on track to hitting the new magic number.

    It would be better to err on the side of caution – it is never a bad idea to save a little more than to come short. You want to retire comfortably and not be broke at retirement.

    Even if you have more than you need at retirement, you could always pass it on to your kids and also be a blessing to people by engaging in charitable works.

    • Like you, my target number has crept up over the years as my financial situation has improved. And I agree that it is better to err on the side of caution for obvious reasons. As you note, “Even if you have more than you need at retirement, you could always pass it on to your kids and also be a blessing to people by engaging in charitable works.” Indeed.

      Thanks for stopping by, my friend and sharing your thoughts.

  4. You and your wife (Mr Groovy and I, too) are very fortunate to be in a position where we can actually debate whether we are saving too much. Many people on their way to financial freedom have a tough road ahead of them. But I’m glad to see many people figuring out their finances decades before we did.

    It sounds like your mom is thriving in retirement. That must make you very happy. My mom was good with finances and planned well for herself and my father. But she didn’t have much of a chance to enjoy the fruits of her labor between taking care of her mother, then my father, and then she, herself became ill.

    • Sorry to hear that your mom wasn’t able to enjoy the fruits of her planning and labor to the extent she – and your family – would have liked. That is one of the things the wife and I talk about with respect to retirement planning and balance. We’re comfortable in the belief we are on the right track financially, a huge focus for us is to be as physically capable as possible – and hope for a little luck – so that we can enjoy our time in retirement to the greatest extent possible.

      Thanks for stopping by, my friend and sharing your story and thoughts.

  5. It’s all about planning and finding that equilibrium point. While savings are nice, ultimately money is meant to make your life better, and people seem to lose sight of that!

    • Indeed. It’s important not to lose sight of the fact that money isn’t meant to be worshipped and hoarded. It simply provides a means to enhance time and experiences with those we love.

  6. A Twitter reader notes …

    “Good article! Balance is tough. My finding it probably cost us 5 years of FIRE but we never felt deprived. Worth it? Yea.”

  7. “Sweet spot between living for today and preparing for tomorrow.” Very important point you make here. While we all want to be frugal with our money we do not want to miss out on living in the moment. Retirement is obviously a major concern for many but what’s the point in saving a ton of money if you are unhappy. Balance is key to personal happiness which, in my opinion, is more important.

    • Indeed. Finding, and maintaining, the right balance is difficult as life factors are continually changing. Therefore, it’s critical that people assess where they are relative to their goals and ensure the actions they are taking on a daily basis supports those goals. Thanks for taking the time to stop by and kick off the conversation, my friend.

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