Collectively people seem to be far more in tune with their retirement prospects than before the financial crisis. Perhaps the reason for this is the increased awareness of how far behind many Americans are in saving for retirement comes from the various studies with shockingly low numbers for average savings rates and average retirement balances.
The job of an advisor is to is to help devise a realistic plan ( a person with no savings have very little shot of retiring in ten years with 70% replacement income) and when appropriate err on the side of caution. This accounts for why people’s retirement numbers tend to be high. I agree with this approach as having too much money is a much better conversation to have than the one about not having enough money.
The risk for most people reading this post is not having nothing for when they want to retire but not having enough. Someone whose plan calls for $800,000 and who ends up with $700,000 is not in a disastrous situation, they could still run out of money if they don’t cut back some but that would most likely be of their own making (barring some extreme, unpredictable event) but this situation really just calls for some modest changes in spending.
Accumulating $400,000 versus an $800,000 plan doesn’t have to be ruinous but will require some serious plan changes (likely that planning occurs along the way, hopefully no one wakes up on their first day of retirement only to see they’ve only got half of what they think they need)which could include not retiring when planned, taking up some sort of post retirement endeavor to supplement income, doing a serious downsizing (in terms of housing and spending) or some combination of all of the above.
I believe in the concept of having a number (or dollar range) but it is just a goal that is either reached or not and just as coming up short does not have to result in disaster, neither does hitting that number ensure success. If you’ve ever had some sort of financial trouble whether serious like losing a house or not so serious like running out of money three days before pay day when you were 23, you obviously figured it out and are alive today reading this post. Retirement should be no different, you’ll have to figure out how to overcome any retirement obstacles and one way or another, you will.