My Advisor Says I'm "5 Years Behind"

In My Plan

Normally, I would post this kind of member conversation in the Madrina Molly ™ Community, behind the paywall. But I was so incensed motivated by my member Financial Advisor’s lack of emotional intelligence that I felt compelled to publicly shame him write this blog post for the newsletter.

Kidding. (Sort of.) If you’re a Financial Advisor, and you need to deliver the news that a client is not able to retire on time, whatever that means, the least you could do is make a few suggestions for what to do about it beyond telling her to “work longer.” But that’s what just happened. I’d like to add, if someone is behind on their savings plan, is it necessary to imply that a happy retirement is doomed? I think not.

Let’s dig into this a little more:

My member told me that the Advisor indicated that she’s five years behind on her plan. I asked if that meant …

… that she needs to save the equivalent of five years’ more money to retire in a specific year;

… if she needs to work and save for five years beyond her planned retirement date to make her money last to 100; or

… if her savings are fine, but she needs to wait five more years to start distribution of her assets.

She didn’t know because he didn’t explain himself to her. No doubt knowing he was delivering sobering financial news, he had not thought to suggest how she might “fix” the problem, whatever it turns out to be.

Her goal is to retire at 67. She’s 60 today. She has a particular lifestyle, and she’d like to maintain it.

I don’t know all the details beyond that. But I do know that’s not a fair thing to say to a client. And it’s not necessarily true.

Just because his model tells him only one thing doesn’t mean there aren’t other creative ways to solve the puzzle of retirement readiness. I’d want my Advisor to go the extra mile and suggest creative solutions. Luckily, my member has a Boldin Financial Plan Model too.

My first question to this member was a clarifying one: Is it more important to you that you retire at 67 or that you be able to spend exactly what you spend today in retirement? She said she’d consider seeing what it looks like if she retires on time but lives a smaller lifestyle.

I’d run what’s called a max spend analysis to indicate how much is the most she can spend monthly while retiring at 67 and not run out of money. I might also keep her lifestyle exactly as it is to age 80 and then reduce it further to represent her slow-go years, wherein discretionary spending would naturally decrease (rather than inflating her expenses in a straight line).

But here are some other scenarios I’d run to help her decide what she wants to do to improve her retirement readiness:

• I’d run a scenario that tells her how much more she needs to save over the next six years to retire at 67 and give her the option to commit to saving it.

• I’d run a scenario that shows her building a consultancy that offsets some income from 60 to 72. Distributing less from her portfolio in her first five years of retirement will give her more assets to spend later. And, who knows? Maybe she’ll want to consult until she’s 80!

• I’d see if Roth conversions before she’s retired or claiming Social Security later would benefit her. I might also suggest getting more aggressive with a piece of the portfolio (to be used last in retirement, since it’s illiquid for a number of years).

• I might combine consulting with additional saving, so that she still has the option to retire at 67. Too often, we jump to spending less to solve a retirement readiness problem, like it’s some kind of penance for living our lives. What if we found a way to make just a little more money and saved all of the extra income?

When I suggested this last idea to her, she started giggling. She told me that she had been a Saturday afternoon bartender for a few years after college and put every extra penny she made toward paying off her student loans. They were paid in just a few years, well ahead of schedule. She could not have imagined that the solution to retirement readiness might be returning to moonlighting in service to her goals.

She decided she would look at hanging out a consulting shingle and doing some additional work for a few years. The new goal is to consult for a number of years leading up to—and after--retiring from her corporate employment. And, with seven years to grow her income in a consultancy, there won’t be any pressure to be successful right out of the gate. Maybe she could even leave her employment early if she replaces enough income.

So that’s the solution she thinks she’ll likely undertake—after she runs her model scenarios.

I applaud her for two reasons:

First, she’s owning the solution and not expecting her Financial Advisor to create some kind of mathematical magic.

Second, she recognizes that retirement isn’t a ”hard stop” that leads to sitting on a beach with an umbrella drink. (That’s called a vacation.) She wants to do things and have spending flexibility. She just doesn’t want to be part of the 9-to-5 after age 67. By building a consultancy and saving some income, she can solve her retirement puzzle and build an income stream that she can turn off when she’s fully funded or wants to end her consultancy.

But there’s more to this conversation than just modeling something that provides a satisfactory direction and promising outcome. Both my member’s Financial Advisor and I have a limited understanding of how she will spend her money in retirement, and importantly, how she will feel about that.

And a financial planning model shouldn’t dictate how happy someone is in retirement. Metrics aren’t quality of life.

There is a body of data, recently highlighted by David Blanchett in his paper for the Retirement Income Institute of the Alliance for Lifelong income, indicating that retirees might not need to replace the same income in retirement as pre-retirement to be happy. He asks if we are over-emphasizing financial wellbeing as a happiness metric and under-emphasizing the benefits of free time and other life choices in determining retirement satisfaction.

The data indicates that the older one gets, the easier it is to maintain financial wellbeing with less consumption. Thus, while we can target modeling perfection--having the same consumption in retirement as we do pre-retirement--being five years behind may not be a recipe for misery. From Blanchett:

“While targeting the same level of consumption in retirement seems like a reasonable goal for American workers, this analysis suggests that those who may not achieve this target are likely to fare far better than commonly assumed in retirement models.”

I’m always happy to help members run their own models. That way, they can correct course as soon as they sense there’s something else they want in the future. It’s important that you own your decisions. As always, your best investment in retirement happiness and financial wellbeing is in your health. But I happen to be a fan of normalizing “working less but for a little longer” as a way to fund a happy retirement.

In the end, you’re probably not five years behind. By exploring a few scenarios, you can be right on time.

Reading: David Blanchett, Retirees: Doing Better with Less, May 2025 Institute Note, Retirement Income Institute, Alliance for Lifetime Income

https://www.protectedincome.org/wp-content/uploads/2025/05/IN-22-Blanchett_v2.pdf

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The information contained herein and shared by Madrina Molly™ constitutes financial education and not investment or financial advice.

Sherry Finkel Murphy, CFP®, RICP®, ChFC®, is the Founder and CEO of Madrina Molly, LLC.