Why I object to 'hitting a number' for retirement

FILE - Cash is fanned out from a wallet in North Andover, Mass, June 15, 2018. (AP Photo/Elise Amendola, File) · Associated Press · AP Photo/Elise Amendola

CHRISTINE BENZ of Morningstar

Mon, September 14, 2026 at 11:00 PM GMT+3 4 min read

When someone says they're retiring because they "hit their number," my alarm bells go off because it's often a signal that the retirement plan isn't as holistic or risk-conscious as it should be.

Here are my major objections.

Back-of-the-envelope planning

Too often, people use a simple heuristic like the 4% guideline to determine their portfolios' viability. Or worse, they're using their gut reaction to the number. A $1 million portfolio seems like it should be plenty, but it might not be if your tax-adjusted, inflation-adjusted spending is too high.

Dividing your number by your planned withdrawal amount is a good starting point to evaluate whether your plan is on track—for example, if you're 10 or so years from retirement. But if you're getting closer, it's worthwhile to create a more encompassing plan. Consider your:

1. Retirement spending versus spending while working

2. Nonportfolio income, like Social Security, a pension, or working income

3. Planned spending rate and portfolio positioning

4. Taxes, inflation, and investment costs

If your assertion that you have enough to retire rests on a single variable—your portfolio's value—that's your cue to develop a comprehensive plan.

Market highs invite risk

Risk also factors into my reflexive aversion to "hitting a number," especially if someone hits their number in the stock market. Stocks go up more than they go down, and it simply feels better to switch from savings to spending mode when your portfolio is looking robust. Counterintuitively, if you plan to retire with a heavy complement of stocks, it's actually better to retire after the market has been pummeled than to go out on a high note.

Valuations are the main reason. Even as your portfolio has gotten plumper, it's also more susceptible to sequence risk, the possibility of big portfolio losses at the beginning of retirement. In our research on safe spending rates, we found that nearly two-thirds of all-equity portfolios that experienced losses within the first five years of retirement ran out of money before year 30.

Our research on historical safe withdrawal rates also points to the value of retiring when conditions look crummy rather than retiring when your portfolio is riding high. In the mid-1980s, most investors probably weren't excited about the prospects for the major asset classes. Not only had stocks endured a punishing rout in 1973-74, but they also posted losses in 1977 and 1981. Bonds performed abysmally, too, thanks to the Federal Reserve's successful campaign to tamp down inflation. But the mid-1980s were actually one of the best periods in modern history to have retired into. An all-equity portfolio would have supported a starting withdrawal rate of nearly 13%! That's right, a $1 million portfolio would have supported a $130,000 withdrawal in year one of retirement, with annual inflation adjustments thereafter, for 30 years. Those rich withdrawal rates were owed to low equity valuations coming into the period, supporting strong stock market gains over the ensuing 30 years. Bond yields were high and trended lower, boosting bond prices, and inflation was generally quite mild.

That's not to suggest that new retirees and would-be retirees should assume that their prospects are dire today simply because equity valuations are high. As Amy Arnott noted in this article, "lost decades" for stocks, like the one that prevailed in the 2000s, have been quite rare. Moreover, investors can make their plans more resilient by building in a complement of safe assets (cash and bonds) and spending less if their portfolios experience losses. In fact, the best thing that prospective retirees can do if they think they've hit their number is to lock down a portion of their gains in safer assets, like Treasury Inflation-Protected Securities.

Lifestyle considerations

My most significant objection to "hitting a number" is that it suggests that deciding when to retire revolves around money and numbers. Of course, financial wherewithal is inextricably linked to whether you can reasonably retire. And if your job is a miserable slog or you're just plain exhausted, by all means concentrate on making the numbers work as soon as possible.

But it's not all about the numbers. As Maria Bruno, head of US wealth planning research for Vanguard, shares in my book "How to Retire," you need to be able to answer "the three haves." Do you have enough? (That's the money piece.) Have you had enough? (Are you done with work, either because you're exasperated or, better yet, because you've achieved everything you hoped to?)

The final "have" is the most important: Will you have enough? Do you know what you are retiring "to" and will it fulfill you? The most successful retirees put more weight on those questions than they do on money matters.

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This article was provided to The Associated Press by Morningstar. For more retirement content, go to https://www.morningstar.com/retirement.

Christine Benz is director of personal finance and retirement planning for Morningstar and co-host of The Long View podcast. Subscribe to her free newsletter, Improving Your Finances.

Why I object to 'hitting a number' for retirement

Back-of-the-envelope planning

Market highs invite risk

Lifestyle considerations

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