Why you don’t need a net worth target to retire

The magic number to retire wealthy

You often see articles and blog posts talking about your retirement net worth… a level to reach in order to be financially independent and comfortable. But why you don’t need a net worth target to retire? Actually you don’t… People seem to need this factual goal to keep them moving and stay motivated. It’s much easier when you can use something you understand (like a number) on a concept which can be too far ahead, vague or complex.

Why you don't need a net worth target to retire
What’s the amount of savings you need to retire?

So what’s my number? I have no idea today and to be honest, no plan to get one! Life is full of surprises and whatever number or simulation you come up with, it will probably not make sense in 10-20 years. Remember those who invested heavily in stock market and saw their portfolio collapsing in 2009 just before retiring? Closer to us, we are in the middle of a global health crisis with the COVID-19, creating an unprecedented situation where some industries will have to reinvent themselves to survive (airlines are a good example).

The “No number” strategy

Warren Buffet always recommends to keep company stocks forever, but he recently sold all its stake in the 4 major US airlines because of the coronavirus. This is a very strong message and makes you think twice about your investment strategy and goals. No one can tell what some industries will become and how long it will take to recover after the pandemic. The same goes with your number to reach. Anything may happen and would impact or delay your plans.

Airlines are at risk with covid-19, so is your portfolio
Airlines are taking one of the biggest hit from

Don’t get me wrong, investing is the right thing to do and we should always look for market recovery. Long term planning requires you to be more cautious than ever about the approach to take. What if you can’t reach your goal by the time you retire? Will your confidence and mood take a hit even if you ended up savings a reasonable amount?

The approach, of not using a targeted net worth for retirement, is to never stop investing! it’s not about a number, it’s about building something that will support you and your family’s needs while you are here and even after you are gone. Having a number is good if you need something concrete, a reference or a goal to reach. The other approach keeps you on your feet and makes you enjoy the journey even more (hopefully!). Whatever the size of your net worth is when you retire, it should be the best result you could get and be happy with it. The key: track your portfolio performance every now and then and be aware of your risk exposure.


So why you don’t need to set a net worth target to retire? Investment is like exercising, loosing weight. You started a diet and hit the gym for 2 weeks and suddenly reached your dream weight, congratulations! But what will happen if you keep your old eating habits and sit on the couch afterwards? Your weight bounced back… (trust me, I’ve been there too many times). Do not expect the short term efforts to last forever. Investment is the same, you need to constantly build and leverage your past effort and future ones. 

the key is about the investment journey, not the target.
The long and exciting journey to investing


I’m not a professional investor nor an advisor of any kind”, The objective of this post is to share my view and experience in investment and estate planning.

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