Precision and the Retirement Planning Process

Planning for retirement is a big deal—if it weren’t, you wouldn’t be reading this. And when something is this important, we naturally want control. Ultimately, we want to feel confident that our retirement income plan checks all the boxes and will carry us through the years ahead. But here’s the thing: planning for retirement isn’t about achieving absolute precision. There’s simply too much uncertainty involved. Think about the variables at play.

To name a few:

• Will unpredictable stock market returns negatively impact my plan?
• How long will you need your savings to last?
• What will healthcare costs look like?
• Will your interests and lifestyle change as you age?
• What about inflation?

We can make educated guesses (some of them quite reasonable), but the reality is that uncertainty compounds over time. And that’s okay. The goal of planning isn’t to get every detail exactly right—it’s to build a flexible strategy that keeps you on track no matter what life throws your way.

The Trap of False Precision

Think back to high school science class and the concept of significant figures. You can only be as precise as your least accurate measurement. If a scale rounds to the nearest half ounce, you can’t claim something weighs 8.6 ounces—it’s either 8.5 or 9.0.

Retirement planning works the same way. It’s easy to get caught up in the math, calculating numbers down to the fourth decimal place, but that level of precision isn’t useful. It creates an illusion of certainty where there isn’t any. Many of us—especially those who like numbers—crave a clear, detailed roadmap. We want to know exactly how much we need before retiring or precisely what our grocery bill will be at age 78. But real life doesn’t work that way. Life is messy, and things change. The more we try to lock ourselves into a hyper-detailed plan, the more fragile that plan becomes.

Instead, we should build a plan that embraces flexibility. What if you live longer than expected? What if you develop a passion for travel—or hang gliding—at 75? What if markets take a downturn? A good plan isn’t about predicting the future; it’s about creating a framework that allows you to adjust as needed.

Many people treat retirement planning as a one-and-done event—something you do once to get “the answer.” But that’s not how it works. Planning is an ongoing process. New information, such as market changes, shifts in tax laws, or personal lifestyle adjustments, need to be accounted for. Your plan needs to evolve alongside your life.

Building Flexibility into Your Plan

While we may not be able to map out the next 50 years in exact detail, we can set ourselves up for success by planning with flexibility in mind. We don’t know what the markets will do, how tax laws will change, or what healthcare will look like in the decades ahead, but you can build safeguards into the plan to address these unknown variables. The end result is a plan that not only works today but continues to work for you as life unfolds.