Beware the ghosts of retirement planning past, present and future

by: phil Wright - December 16, 2022

Looking back at financial regret can be painful but there are clear advantages of saving early and overcoming procrastination. In fact, with the power of compound interest, time is one of the most significant benefits a young investor has.

In the classic short story, A Christmas Carol by Charles Dickens, Ebenezer Scrooge, relieved after a nightmare in which he was visited by three ghosts, proclaimed: “I will live in the Past, the Present, and the Future. The Spirits of all Three shall strive within me. I will not shut out the lessons that they teach!”1

Scrooge emerges a changed man, with a new passion for life and a firm resolve to do good moving forward. If we were to reimagine Dickens’ famous holiday tale in terms of retirement planning, what could we learn that might have positive effect on securing our financial future?  


The Ghost of Retirement Planning Past   

Looking back at financial regret can be painful. You may have wasted much of your financial youth thinking you had time on your side, but time is not your friend when you don’t respect it. For instance, did you ever cash out a 401(k) when you switched jobs early in your career? Did you let your student loans linger too long? Or did you fail to start saving?   

There are clear advantages of saving early and overcoming procrastination. In fact, with the power of compound interest, time is one of the most significant benefits a young investor has. Just take a look at the tale of these two hypothetical scenarios: Self Starter and Self Inflicted.

Suppose Self Starter immediately began saving for his 401(k) in his 20s and invested $10,000 per year for 10 years, then stopped. Compare that to Self Inflicted, who shot himself in the foot by putting saving off for 10 years but then played catch-up — investing $10,000 per year for 25 years. Assuming a hypothetical return of 8% for both, Self Starter will have more money than Self Inflicted in significantly less time despite investing significantly less money up-front.


  Age 21-30 Age 31-55 Total Investment Value at age 55
Self Starter $10,000 per year $0 per year $100,000 $1,071,477
Self Inflicted $0 per year $10,000 per year $250,000 $789,544

This chart is hypothetical and for illustrative purposes only. The assumed rate of return is 8%, which is not guaranteed and should not be viewed as indicative of the past or future performance of any particular investment. This example does not consider the impact of any taxes.


The Ghost of Retirement Planning Present

Kenneth Moore, playing the Ghost of Christmas Present in the 1970 film Scrooge, remarked: “There is never enough time to do or say all the things that we would wish. The thing is to try to do as much as you can in the time that you have.”2

Although there is an advantage to start saving as early as possible, it’s never too late to start being smarter with your money. Working with a financial professional can help you invest and save smarter, and perhaps make up for lost time. Think about what’s happening right now. You have to contend with inflation and market volatility. Knowing what you need in retirement is also about income and protecting your gains. Coming off a global pandemic coupled with an unsettled economy, we are all coping with a period of financial stress. The guidance and advice of a financial professional can be a great source of comfort and help you push forward with more confidence.   


The Ghost of Retirement Planning Future

In Dickens’ story, Scrooge was filled with dread upon meeting the final spirit to visit him: “Ghost of the Future,” he exclaimed, “I fear you more than any specter I have seen."3

Unfortunately, the fear of running out of money in retirement continues to haunt a generation of baby boomers.Looking ahead, converting some of your assets to a steady stream of income could help fund your retirement without the worry of depleting your assets. And when you do retire, will you be emotionally ready to spend your savings? Curiously, three-fourths of average retirees — as defined in terms of income and assets — saw their nest eggs remain the same or increase in retirement according to the Employee Benefits Research Institute.5

So, what about spending your money and your time in retirement? You could have an exciting start, but for many, after the retirement sugar rush wears off, managing the additional time can be an unexpected challenge.

If you have an intentional plan with purpose, your clock can be filled with reward rather than any past regret. Those who lack purpose in retirement have a significantly higher likelihood of experiencing a heart attack, stroke, Alzheimer’s disease, early mortality and other health risks associated with aging.6 A financial plan is not your holistic retirement plan.

When it comes to retirement planning, many of us are haunted by the past, paralyzed by the present and fearful of the future.  Understanding where we’ve been, where we are and where we’re going is a meaningful exercise for putting a plan for retirement together. 

As we consider our retirement past, present and future, it’s essential to stay positive. For, as Dickens reminds us in A Christmas Carol, “… There is nothing in the world so irresistibly contagious as laughter and good-humor.”

1. The Circumlocution Office, “I will live in the Past, the Present, and the Future! The Spirits of all Three shall strive within me,” Dec. 6, 2022.

2. IMDb, Scrooge (1970), “Kenneth More: Ghost of Christmas Present,” December 2022.

3. Page By Page Books, “Stave 4: The Last of the Spirits,” December 2022.

4. Transamerica Center for Retirement Studies, “Retirement Security Amid COVID-19: The Outlook of Three Generations,” May 2020

5. EBRI, “Retirees’ Dilemma: Spend or Preserve?” May 2020.

6. National Library of Medicine, Cerebrum, “New Movement in Neuroscience: A Purpose-Driven Life,” June 1, 2015

About the author

Phil Wright, Assistant Vice President, Content Marketing, Jackson National Life Distributors, LLC

Phil Wright is the Assistant Vice President of Content Marketing at Jackson National Life Distributors, LLC (JNLD), and an award-winning financial writer. He started with the company in 1994 and focuses on the development and creation of marketing business content. He is a Registered Principal and Certified Fund Specialist (CFS®).

Phil Wright is affiliated with Jackson. All other authors are not affiliated with Jackson.


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