Retirement Goal Setting

basketball-1511298__180We know it is important, but in our busy lives, retirement goal setting tends to be forgotten and low priority, and this is unfortunate.  When we are stuck in the daily grind, working and paying the bills, raising a family and whatever else, we often either don’t think about retirement at all, much less have a picture of what it will look like, or what we want it to look like.  We might think casually about wanting to retire early, but not about what we actually want to do with all of our new-found time and freedom.  So year after year of life can go on, and lots of potential goals can become unreachable and fall off the table, only because we failed to stop, set goals and make plans to meet those goals.

You don’t want this to be you.  This is why you should think about what life changes will be happening as you retire, and why you need to set retirement goals today, if you haven’t already.  These considerations will direct (to the extent possible and practical) your activities today, as you try to bring about your retirement hopes and dreams.  Setting down your plans now will assure you of the widest possible set of reachable goals in the future, including in retirement.


When describing goal-setting, people often will say things like, well I want to have a million dollars in the bank some day, or “I want to live in Florida” (or Montana, or wherever), or “I want to travel the world”.  We might feel as if we have to want those things too, but in reality they may mean nothing to us.  We may just want more time and freedom to garden all day, or be near our kids to share in their lives.  Others’ goals are not necessary your goals.

There are many retirement-related resources available on the internet, but they totally bypass the concept of picturing your life in retirement.  It is amazing to me what you can come up with with a Google search on “setting retirement goals” – right at the top are a bunch of big-name banks and investment houses which all focus on looking at coming up with some large pot of money – and how you should invest to get you there.  A million dollars (or “whatever your goal is”) isn’t a goal.  It’s just a pot of money.  If it misses a million by a couple thousand, did you miss your goal?  Should you feel sad that you never achieved your goal?

That pot of money may help you do something you’ve always wanted to do in retirement, but that thing you’ve always wanted to do is the goal, not the pot of money!  The banks and investment firms don’t have your best interest at heart – they are doing this so that they can more quickly get you to figure out which of their mutual funds or annuities you should buy, and so on.  This doesn’t help you plan for your best retirement outcome.  And it goes beyond the banks – after the banks in the list there is a US News article written by a certified retirement planner that (also) considers a goal an amount of money in the bank (again, that is NOT a goal, that is a means to reaching a goal!!).  Although it mentions the word goal a number of times, the focus of the article is on providing different investment strategies that a person at age 40 vs. a person at age 64 might use – this isn’t an article about goals at all!

So don’t rush into the process of setting goals – don’t try to come up with a dollar amount you will need in retirement, determine what your investments should be, etc. until you have set real life and retirement goals.  Your goals will then determine how much you will need to save, and things like investment choices will be determined by your risk tolerance and how long your time horizon is.  Your risk tolerance and time horizon can also help you understand how much “cushion” over and above the target savings rate you should plan for.  But future pots of money and investment strategies should be off the table during this process.  There are a LOT of considerations to work through before the required pot of  money becomes clear!


There are many questions to answer for yourself when considering your retirement goals.  Some examples that might be relevant to your goal-setting:

  • Do you want to retire early?  By what age?
  • What do you want to do in retirement (hobbies, travel, volunteer work, etc.)?
  • How much spending money (beyond that needed for bills) do you want to have per month or per year?
  • What changes can I expect to have in my regular monthly expenses during my retirement years?
  • Should I assume my health impact my retirement spending?
  • How long a lifespan should I plan for (among other things, you might consider your family history here).
  • Do I plan to step up my giving to worthy causes (i.e., philanthropy)?  How much would I like to be able to contribute each year?
  • Should I plan for long term care expenses?
  • Do I enjoy work enough to maintain a few hours a week doing that?
  • Given my assumed commitments, how much time can I carve out for my painting hobby, or my volunteer work?
  • Will the mortgage be paid off by the time I want to retire, or will there still be a few years left to pay on it?
  • How large an estate do I want to leave to my surviving family members?
  • Do I envision moving to a single-story house or apartment to avoid stairs?
  • Where do I want to live in retirement?

These are only some of the types of questions that might help you picture your retirement lifestyle and set your goals. Each of these might represent a goal in someone’s retirement plan.  Fill in the relevant questions and answers for your particular situation.

Once you’ve determined your retirement goals here are a few questions to ask yourself as you move toward putting together your retirement plan:

  • What is the most important goal I have?
  • How would I rank my goals in importance?
  • How conservative do I feel I need to be with my income assumptions in retirement?
  • Should I organize my life plan to virtually assure myself of meeting all my retirement goals, or would meeting 80% of them be OK?

What you are trying to do here is to look objectively at your goals and shape them BEFORE you move toward building your retirement plan.


You may have constraints that you want to set on your goals.  Constraints are considerations that are as important to you as goals, and work like limits to what you are willing to do, where you are willing to go, etc. in order to meet your retirement goals.  They do a lot toward assuring that your goals are realistic, when viewed in aggregate.

So for example, you may set a goal of being able to leave an estate worth $500,000 to each of your 3 kids, which may be realistic as you see it right now, but not if at some point in the future you determine that you and your spouse will have to each work 10 hours per day for 5 years after retirement to make that happen.  So you might set a constraint that says you and/or your spouse will not have to work after retirement in order to meet your retirement goals for any reason (unless you decide that want to).

The above constraint is shown relative to the estate monetary goal only for illustrative purposes, but such a constraint probably would be considered to apply across all goals.  So, if a review of your retirement goals at some point in the future ever shows that you will have to work after your defined “retirement” age, the a re-evaluation of your goals is required.


Many of us in our pre-retirement working lives set goals (for our workgroup, business unit, etc.) every day, or at least we are told we should be living by goals that someone else set every day at work.  When we set goals in business, often it is because we are told to by our boss, or we go to some training class that tells us we should do this.  So we likely know how to set goals already.  Why then is it so hard for us to set them in for our personal lives, where they may actually have some real importance to us?

We can apply some of the same lingo used in business goal setting to our personal goal setting.  In business, the acronym SMART is often used when developing goals.  The letters SMART are often defined as:

  • Specific – target a specific area for improvement.
  • Measurable – quantify or at least suggest an indicator of progress.
  • Assignable – specify who will do it.
  • Realistic – state what results can realistically be achieved, given available resources.
  • Time-related – specify when the result(s) can be achieved

These apply to our personal life and retirement goals as well, although some of the “business-y” terms should be made more relevant.  For example, we aren’t targeting an “area for improvement” with our goal, we are targeting our life goals in retirement.

An example goal to test against the SMART criteria is shown below (note that a previous goal that informs the example is “My wife and I will be retired by age 62”):

  • Retirement Location Goal:  Within 2 years of our retirement, my wife and I want to live independently within 30 minutes of where our daughter lives (she currently lives within the Fort Worth, Texas area, but we will adjust if our she moves to a different location).

This goal meets our SMART criteria, because:

  • Specific:  The goal completely defines the location where we want to live (as opposed to:  I want to live near my kids) and how we want to live there (independently, as opposed to in a retirement home or assisted living arrangement).  We assume for planning purposes the Fort Worth location – this allows my wife and I to get started now developing and taking action on our retirement plans, instead of waiting until we are near to retirement to find out where our kids are living.  However, it allows us flexibility in case she moves (some contingency might need to be included in the financial planning to allow for that flexibility).
  • Measurable:  The goal specifies the required timing of the move to Texas (assuming a move for my wife and I is necessary), and therefore clearly defines by when we need to have the resources to pay for that relocation.
  • Assignable:  My wife and I will be the ones to move.  This is sort of obvious for this goal, but other goals may require some thought as to who will have to do what to make the goal achievable.
  • Realistic:  There are various influences to the determination of whether a goal is realistic, but for the sake of argument here we assume that we have intentionally discussed and agreed that a move to the Fort Worth, Texas area before we reach age 64 is a realistic goal for us, from our current vantage point.
  • Time-related:  The goal is to be met by age 64 (within 2 years of retirement – we previously assigned a goal of retiring by age 62).

In the above example, we’ve assumed for illustration that only one goal is specified for retirement.  In reality, you will have a number of goals, and a vision of your life in retirement with all of these goals met should be your focus.  In other words, when considering the “Measurable” criteria, each individual goal should be measurable; and when considering the “Realistic” goal, then of course each should be realistic, but all of the retained goals should be collectively realistic, as well.  With this concept in hand, you may be able to see the value of identifying the importance of your goals relative to each other set, as shown in the questions/considerations listed above.  If a low-importance goal all by itself makes all of your goals taken together become unrealistic, maybe it should be dropped off the list entirely (or maybe some other change is necessary to be able to retain it).


Saying we have goals and actually having them are two different things.  If we actually write our goals down, and post them somewhere where we can see them every so often, we will remember what we’ve promised ourselves.  This is important to keep the motivation up, but so often we don’t do it.  Good intentions with no follow through will stay just that, good intentions.  To reach your goals you have to concretely specify them and commit to them.  If you never write them down, you don’t really have goals.

So, using the questions above as a guide, and some of your own, write down at 5 to 10 goals that come out of picturing your life in retirement, the way you want to live it.  These goals of course can be changed later, but these should be well thought-out.  Life will throw you some curve-balls, surely, and these are perfectly good reasons for needing to re-look at your retirement goals.

However, right now you want to take the time to be thorough.  You want to be as confident as possible that you won’t have to re-do your plans later, simply because you forgot to consider something.

I hope that this page has given you an appreciation for the importance of retirement goal setting.  For a discussion of building your retirement plan, see my Best Retirement Advice page.

Feel free to leave me a question or comment on this page below – I’ll get back to you.  Or, check out my Wealthy Affiliate profile page and leave me a comment there.


  1. Hello: I really wanted to check out your site page as I need to put together a retirement expense budget for my financial advisor to determine how much I will realistically need in retirement.
    I’m getting a “This site can’t be reached” error. Hopefully your site will be available soon?
    Thank you, Barbara

    • Hi Barbara – thanks for the note. I think the site had an automatic software update recently and that may have been when you were trying to reach it – all I can say is try again! Best of everything to you.


  2. retirement have been my dream ever since i have been seeing many people in my community who have just retired as enjoying and even feeling more good. yes retirement can be a boring stage but with information on this post i have gained all i wanted

    thanks for the information


  3. Retirement – ah wishful thinking right now, got about twenty years left on my clock still

    It’s a well worthwhile topic to talk about, so many of us talk about it but never plan it

    Good advice! Thank you for the insight – it’s a well thought out article actually, one that I’m not sure all would take heed of in years to come but c’est la vie

    • Thanks for your comments! It seems that you are not ready to start thinking about your goals yet, but I would recommend you do sooner rather than later! All the best to you.


  4. This is a really important topic and one that people don’t spend enough time thinking about. For some reason, we just never seem to think about retirement planning. Perhaps because it seems so far off in the distance, that it’s unattainable. But that’s ironic because the earlier you start planning for your retirement the better your post work life will be. I agree that being specific about your goals and setting a plan is key.

    • I couldn’t have said it myself better Mike. We are so used to having what we want right now that actually stopping to think about what we are doing just doesn’t enter our brains most of the time. I hope I’ve made a difference for some people with this post. Thanks so much for your comments!


  5. I graduated from college with very idealistic (and naive) goals, especially with the ones related to my profession. The sad thing is that, after 8 years, I realized that I’ve prioritized my career goals more than my personal goals.

    I pay so little attention to my personal life that now I think I’ve missed the boat; finding a relationship that last, creating my own family and spending time with my aging parents.

    Honestly, I don’t want to do all this when I am about to retire. It would be too late by then. Now, my personal happiness is my main goal and I strive to achieve this everyday with my online business.

    • Cathy, thanks for the candid comments. Yes often I think we can feel that we find out about these things too late, however with your new online business you are on the right track. As I explain in my Understanding Your Finances page, the more that your income exceeds your expenses, the more time and effort you will be able to take to focus on your financial situation and improve it.

      So I’m not giving up on you! When your business is creating the extra income you need, you can take some time to work on personal finance to keep more of what you make, and maybe not have to work as hard!!

      Thanks again for the comments – Randy

  6. When you’re in your prime and you’ve got a busy life and a family to look after, the last thing most of us think about is retirement plans. Trouble is, life passes by so quickly and before you know it, you’re at an age when it’s too late to really make a difference with your retirement portfolio.
    This post gives a good insight about what to think about and the different ways you can prepare for that important part of your life.
    It’s too late for me and I’m still working, despite being well past retirement age. So take heed of this quality article. It’s never too early to think about your retirement. Ches

    • Thank you so much Ches for your thoughtful and candid comments. Yes I completely agree, it is so important to think ahead and plan. Your story is a powerful testimony to this! Although we need it, God knows that and will provide – and thankfully, life isn’t all (or even mostlly!) about having money. All the best to you.


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