When you’re planning a vacation, you probably think about where you want to go, how you’ll get there, and what activities you’ll do once you’re there. You can easily calculate how much money you need to make that trip a reality. However, when it comes to planning the biggest, longest vacation of your life—retirement—many people miss a critical step: envisioning what they want their life to look like.

Instead, people often focus on how much to save, where to invest those savings, and how to minimize taxes, but they rarely take the time to think about how they want to spend their time in retirement or what their health will allow them to do as they age. According to an article in CNN by financial expert Chris Perkins, this narrow focus on saving without a clear vision of retirement can lead to a situation where people are saving too much—but still feel unprepared for the future. So, how can you avoid this pitfall and plan for a retirement that truly reflects your desires and goals?

Reevaluating the Traditional Retirement Approach

 Many people follow the conventional wisdom of saving as much as possible for retirement, often aiming for a specific dollar amount that will ensure financial security. But Perkins argues that this “save more, work less” mindset may be missing the mark. In fact, over-saving for retirement without considering your lifestyle can result in financial strain that doesn’t even align with what you want to do in your later years.

The key question here is: What do you want to do in retirement? Without knowing how you want to spend your time, it’s difficult to know how much money you actually need to live that life. This is a crucial part of the equation that’s often overlooked.

The Importance of Purpose in Retirement Planning

 Having a sense of purpose is one of the most important factors for long-term health and happiness, especially as we age. Studies have shown that retirees who engage in meaningful activities, whether through work, hobbies, or social connections, tend to live longer and experience lower levels of depression and stress. In fact, research from the National Institutes on Aging found that people who feel they have a purpose in life are less likely to develop Alzheimer’s disease or other cognitive disorders.

This doesn’t just apply to your career—purpose can come from anything you are passionate about, from volunteering to learning new skills or traveling. Understanding what you want to get out of retirement, beyond just financial security, is key to a fulfilling retirement plan.

Action Steps:

1.  Define Your Retirement Goals

Take some time to think about what you really want to do in retirement. Write down your goals and envision a day in your ideal retirement. Use tools like FutureMe to send yourself a letter with your goals and dreams, and use it as a reminder to shape your financial and lifestyle plans.

2.     Create a Retirement Budget Based on Your Lifestyle

Instead of saving for an arbitrary amount, design a budget based on your actual retirement activities. Do you want to travel? How often? What hobbies or classes do you want to pursue? Start by using a budgeting app like Mint to track your expenses and ensure you’re saving for what truly matters to you.

3.     Factor in Health and Healthcare Costs

Don’t forget to plan for healthcare. As you age, healthcare expenses can become one of the largest costs. Consider using a tool like HealthView Services to estimate your future healthcare costs and plan accordingly.

The Dangers of Over-Saving for Retirement

The idea of “over-saving” may seem strange. After all, isn’t saving more always a good thing? Not necessarily. Perkins highlights how people often focus so much on saving that they forget to live today or enjoy their journey toward retirement. In fact, over-saving can create a false sense of security and cause unnecessary stress about accumulating the “perfect” amount of money.

Another issue is that people may aim to reach a savings target without fully understanding how it will translate into the lifestyle they envision. For example, many assume that they’ll spend their time in retirement traveling, but don’t account for the reality that health issues may limit travel or that they may prefer a quieter lifestyle in their later years. By focusing solely on money, it’s easy to overlook the ways in which your personal preferences or health status might change over time.

Action Steps:

1. Balance Saving and Enjoying Life

While it’s important to save for retirement, it’s equally important to enjoy your life now. Use apps like Spendee or You Need A Budget to help you create a balanced approach to saving and spending, ensuring you’re able to live well today while preparing for the future.

2.     Adjust Your Saving Strategy Based on Life Changes

Be flexible with your savings plan. If you’ve saved enough to feel secure but have the flexibility to adjust for changing needs, you’re more likely to enjoy your retirement years without feeling financial pressure. You can use tools like Personal Capital to adjust your savings strategy as your lifestyle goals evolve.

3.     Consult a Financial Advisor

A financial planner can help you find the right balance between saving and living. They can also help you ensure that you’re investing your savings in a way that aligns with both your current lifestyle and your long-term retirement goals. Use platforms like NerdWallet to find certified financial planners who can guide you through your retirement planning.

Planning Beyond Money

Ultimately, retirement planning is not just about the money—it’s about crafting a life that aligns with your goals, passions, and values. By taking the time to consider what you really want from your retirement, you can ensure that your financial decisions support those desires, not just arbitrary savings targets.

As you think about your retirement, consider this: Are you planning based on what you want to do in the future, or just what you think you should save?

Join the conversation on how you’re shaping your retirement plans and share your thoughts at the Age Brilliantly Forum.