I recently achieved one of the hiking goals that I have been working towards for the last couple years: hiking my way to the top of Mount Charleston, a mountain that rises almost 12,000 feet above the Nevada desert outside Las Vegas.
Throughout the 16.5 mile hike, I had a lot of time to think, and a theme kept popping up in my head: hiking up mountains like this is a lot like saving for retirement.
People saving for retirement are like the hikers at the foot of a mountain, likely intimidated by this huge task that lies ahead of them. But by setting reasonable goals, planning your route, and starting early, you’d be surprised how well you can take on “the retirement mountain” and set yourself up to achieve or even exceed your goals!
One of the most important things to remember when hiking mountains and trying to summit different peaks is to set reasonable goals.
I know my limits, and I’m comfortable with the fact that they are lower than some of my friends. My friends who live in Colorado, for example, take on “14ers” (mountains with a summit over 14,000 feet) pretty regularly. Their most intense hikes would simply be too much for me at this point, and I would likely just end up frustrated and disappointed.
The same goes for retirement planning. Setting overly lofty goals can lead to disappointment and frustration if you fall short. You shouldn’t compare yourself to other people or base your goals on what others are achieving
For this reason, it makes sense to start by targeting reasonable goals for retirement, for example replacing your pre-retirement income throughout retirement. Then, as you achieve these goals, you can always feel free to start taking on larger ones.
If a person simply started at the foot of a mountain and tried to walk up to the top, the likelihood they would actually get to the top is incredibly slim. But fortunately, there is usually an established trail people have taken to the summit, and you can simply plan to follow this path.
For this I use the AllTrails app on my phone (though they have a web version at www.alltrails.com) – it provides me with a roadmap of where I’m going. It includes everything from how long the hike is, how much elevation gain you will experience, and even a map of the actual trail route so you can make sure you stay on track.
You know what you’re getting into in advance and can use this information to determine how much time the hike may require and whether it is an intensity level you’re comfortable with.
In retirement planning, your AllTrails app is your financial plan. It shows you where you are heading, the path you need to take to get there, and the amount of “legwork” required (through saving) on your part.
Your plan will tell you in advance if your goals are reasonable, or alternatively if they are not lofty enough and you can achieve more. It will also help you make mid-course corrections if you stray from the path you are taking to achieve your goals.
My friend and I started our hike up to Charleston at 6:00 am. Had we started at 8:00 am we likely would not have made it to the top. Had we started at noon there would have been no chance.
Starting a hike as early as possible allows you more time to complete the hike. You can go at an easy pace and take breaks, instead of rushing to complete the hike in time.
The same goes for saving for retirement; there is a huge benefit to starting early. In the same way that you don’t have to rush as much to complete a hike by starting early, a retirement saver who starts early is going to have a considerably less strenuous retirement savings journey. In addition to the ability to spread out the same amount of saving over more years, those who save early experience more years of compound growth.
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Oddly enough, my friend and I did not set out to get to Charleston Peak. We originally planned to do the hike as a practice run to see how fast we could get to the half-way point and determine if it was even remotely possible for us to make the hike all the way up to the peak later this summer.
Since we started early and were able to take our time, we got to this halfway point fairly early with somewhat fresh legs. We realized we had set ourselves up to continue on and get to the top, and that is ultimately what happened.
This same thing happens to those who set themselves up for a successful retirement. If you set reasonable retirement goals, have a plan for achieving them, and start early, there is a very good chance you will exceed your goals as well, and will get to experience a retirement beyond what you ever could have imagined!