Financial Planning
Three Signs You Might Be Ready to Stop Contributing to Your Retirement Accounts

Three Signs You Might Be Ready to Stop Contributing to Your Retirement Accounts

Jake Skelhorn
May 29, 2024

When thinking about retirement, a common question that arises is, "How much will I need before I can confidently retire forever?" This is undeniably an important figure to determine, but it doesn't necessarily mean you have to contribute to your retirement accounts until your very last paycheck. What if I told you that you could stop contributing to your retirement accounts and spend that money elsewhere? In this blog post, I'll share three signs that it may make sense for you to stop contributing to your retirement accounts and increase what I call your "return on life." This post is essentially the blog version of this YouTube video I recently posted. 

1. You Already Have Enough for Retirement

This might seem obvious, but many people don't realize how much they actually need to save before they can retire. If you've been diligent about saving throughout your career, you might just assume you'll retire at a certain age, like 60, 65, or 67, and continue contributing to your retirement accounts without truly assessing your needs.

For example, let's say you're 60 years old today, you want to retire at 67, and you plan to spend $8,000 per month in retirement. If your expected Social Security benefit is $3,500 per month, you'll need an additional $4,500 from your portfolio to support your lifestyle, which amounts to $54,000 per year. Using a standard 4% withdrawal rate, you would need $1.35 million saved to live comfortably without a significant risk of running out of money.

In this over simplified example, if you already have $1.35 million or more saved, you could theoretically retire today instead of waiting until 67. Think about what you could do with those extra years: more family time, travel experiences, and reduced stress. By reassessing your needs and realizing you already have enough saved, you can buy back your time and start enjoying life more now.

2. You're on Track to Meet Your Retirement Number

Even if you haven't quite reached your retirement savings goal yet, you might be on track to meet it without needing to contribute more. For instance, if you need $1.35 million and currently have $1.1 million saved at age 60, your portfolio would only need to grow by 2.92% per year over the next seven years to reach your goal. This is a conservative and achievable growth rate.

If you're maxing out a 401(k) at age 60, that's over $30,000 per year you could redirect towards things that bring you joy, like travel, a new vehicle, or even charitable donations. Gradually shifting from a saving mindset to a spending mindset while you're still working can help you adjust to spending more money in retirement and fully enjoy the fruits of your labor.

3. You're Missing Out on Life Experiences

Saving for retirement is crucial, but there can come a point where it compromises your quality of life today. Some people become so focused on saving that they miss out on meaningful experiences, constantly pushing the goalpost further. You might tell yourself you'll retire at $1 million, then change it to $2 million, and so on, missing out on life in the process.

You don't want to look back with regret, having missed out on experiences like seeing your favorite band, upgrading to business class, or dining at a Michelin-star restaurant. If you have enough saved, consider spending more now to enhance your quality of life instead of constantly chasing a larger nest egg.

Real-Life Example: Kevin and Katie 

Let's look at a real-life example from our clients, Kevin and Katie (names changed for privacy). Kevin is 59, and Katie is 57. Together, they have nearly $1.9 million saved across various accounts. They plan to retire in about eight years, living off $7,000 per month plus additional allocations for healthcare and long-term care.

Net Worth BluePrint in our planning software, RightCapital

Currently, Kevin and Katie contribute significantly to their 401(k)s, but their financial plan shows an 88% probability of success for their retirement goals without any changes. By stopping their 401(k) contributions, they could redirect over $33,000 per year towards other goals, like buying a new car for Kevin and funding Katie's travel desires. Even with these changes, their probability of success remains strong, around 82%.

Current vs. Proposed Plan ($0 retirement contributions, instead purchasing a new vehicle and spending $10k/yr on travel)

This shift allows Kevin and Katie to enjoy more of their money now, enhancing their quality of life without jeopardizing their retirement.


Reassessing your retirement savings strategy can open up opportunities to enjoy life more fully now, especially if you're already on track or have enough saved. It's about finding a balance between securing your future and living your life to the fullest today. If you'd like to learn more about how to optimize your financial planning, schedule a complimentary intro call today.

Disclosure: The examples in this post should not be taken as tax, legal, or investment advice. Probability of Success is a result of a Monte Carlos simulation and does not guarantee any specific outcome.