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Retirement – The Math and Emotion

In a recent meeting with a client, we started talking about his upcoming retirement. As we have discussed previously, we at Gainplan believe that almost every money decision has two dimensions – math and emotion. These two dimensions are part of the reason that financial decisions are rarely cut and dry. I think my conversation with this client was illustrative of the potential dilemma faced in these situations.

As we were catching up and finishing our breakfast, I asked what he was thinking regarding his retirement timing. Our analysis indicated that he has accumulated enough assets to retire tomorrow (the math). Yet his answer was very waffling. I asked, “What if you had double the money saved, could you retire?” His first answer was an immediate yes (the math). “Would you?” A pregnant pause, followed by pensive silence (the emotion). His “reasoning” was that he did not know what he would do all day.

It’s been our experience over the years that the emotional dimension usually trumps the math and this client is the perfect example. Not recognizing those two dimensions would have resulted in a very different conversation between the two of us; because while I would preach math, the client would be hung up on the emotional. Due to our understanding of the two dimensions, our conversation moved positively into a discussion of his options to fill his newfound “free time” – volunteer work, business mentoring, travel, part time work… It did not result in the “yes you can”, “no I can’t” conversation that I have seen so often.

The math of money is important, but so is the emotion behind the money. Think about it. 










This commentary on this website reflects the personal opinions, viewpoints and analyses of the Gainplan LLC employees providing such comments, and should not be regarded as a description of advisory services provided by Gainplan LLC or performance returns of any Gainplan LLC Investments client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Gainplan LLC manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.


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