Saving too much? For retirement?

When I run ESPlanner it suggests this year I should save tens of thousands less (the recommended amount is negative savings), increase discretionary spending by tens of thousands, and reduce life insurance to zero for myself and my spouse.

I interpret that as ESPlanner telling me I'm saving too much. Question: why would it ever tell me I'm saving too much? Wouldn't saving more just increase my Living Standard Per Adult? (I guess I am thinking that saving more now, should increase my future Living Standard Per Adult, and future Living Standard is what ESPlanner is generating).

What I really want to know is can I retire this year and not have my current living standard decline -- what are good indicators from ESPlanner that would answer that?


dan royer's picture

The program is calculating your sustainable, smooth discretionary spending pattern. (see Annual Suggestions report and the consumption or discretionary spending column.

I assume you are in Economics Planning mode and not "conventional" or "upside" mode.

When the goal is smooth discretionary spending, it's not actually true that saving more now is always better because that could mean a low living standard for some period of time and then a high living standard later; the opposite of course is spending too much now and not having enough later. The program is showing you how to have a steady, sustainable, and smooth living standard.

ESPlanner will definitely answer you last question. That's the very purpose of the software.

Make sure you are using Economics mode.

Then, look at the discretionary spending pattern. You want it to be smooth and as high as possible.

It's difficult for me to give you any better interpretation without seeing your report. If you want me to take a look, create a support ticket and upload your database.


It is in Economics mode.
Living Standard per Adult is completely smooth; Discretionary spending is smooth except for decreases when kids are projected to leave the house in a few years.
I will open a support ticket.

dan royer's picture

Sure. I can look at it if you upload it to a ticket. But if all is smooth now as you say, then saving now will raise your future spending but lower your current spending (and it will no longer be smooth).

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