You’ve probably heard the phrase, “Money doesn’t buy happiness.” But in retirement, money absolutely shapes your freedom, security, and ability to live life on your terms. The challenge is that we rarely make purely rational decisions about money. Instead, we make deeply personal ones, shaped by decades of experience, upbringing, habits, fear, hope, and emotion.
Before we can plan a purposeful and fulfilling retirement, we need to look back. Understanding your relationship with money is a critical first step to designing a future that’s not only financially stable, but also emotionally satisfying.
Your money story
Every person has a “money story” — a mental narrative built from childhood, early jobs, family values, culture, and past financial wins or regrets. Maybe you grew up in a home where money was tight, and every dollar was stretched. Or maybe money was never discussed — a silent, stressful subject. Maybe you received strong financial guidance early on, or maybe you’ve been figuring it out on your own, piece by piece.
Take a moment to reflect:
- What is your earliest memory of money?
- Was it a source of comfort or conflict?
- How did your parents talk about money (if they did at all)?
- What financial decision are you most proud of?
- Which one still keeps you up at night?
These memories don’t disappear with time — they linger in our subconscious and subtly influence our financial behavior. In retirement, they can either empower or sabotage your decisions.
Why behavioral biases matter
As humans, we are wired with cognitive shortcuts — mental rules of thumb — that helped our ancestors survive. But in today’s complex financial world, these behavioral biases often lead us astray.
Let’s look at a few that often show up in retirement planning:
Loss Aversion: We tend to feel the pain of losing money more than the joy of gaining it. That’s why some retirees hoard cash, even when it’s eroded by inflation.
Present Bias: We focus on short-term gratification over long-term benefits, which can lead to overspending early in retirement or delaying saving in our working years.
Home Bias: We favor investments or financial decisions rooted in our own country or familiar environment. This bias can limit growth potential and increase risk by concentrating exposure in a single economy.
Overconfidence: We might overestimate how long we can work, how well we manage money, or how much we truly need.
Recognizing these biases is not about shame — it’s about awareness.
Once you know how your brain may be tricking you, you can start making more conscious, informed choices.
From fear to flexibility
A client once told me, “I’m afraid to spend any of my retirement money. I grew up poor, and I don’t trust that it’ll last.” Despite having more than enough saved, this deep-seated fear of scarcity held her back from traveling, gifting, or even turning on the air conditioning in summer or the heat in the winter. She could never give herself permission to spend. So most of our conversations were not about taxes or investment ideas, but instead about life—about spending, about what she enjoyed, and reinforcing that she was okay financially.
Another had the opposite story: “My dad died young, so I want to live while I can.” Well, this is more of my story. My dad passed away in a job-site accident when I was eight years old. This has impacted so many things in my life—my desire to be a dad, a sense I would die early, a fear of heights, and a scarcity mindset for years around money. But it also told me to prepare—have life insurance, hug my loved ones close, and make sure I live life to the fullest because it is a temporary and beautiful thing.
Both stories are valid. Both are rooted in emotion. And both required a shift—not in dollars, but in mindset. Retirement planning isn’t just about managing money. It’s about navigating feelings of uncertainty, abundance, legacy, and identity.
Start with grace and gratitude
Your money journey is unique. You are not just a spreadsheet. You are a human being shaped by experience. But do not forget to give others grace when they approach life differently than you do. Think about spouses and family members not as having walked the same path as you but as travelers that saw a different road than you. Don’t immediately go to judgment when they behave differently around money than you do. Instead show some grace for their beliefs and gratitude for your own.
So before we dive into planning, take a moment to sketch this:
- What are three money beliefs you currently hold?
- Which ones serve you?
- Which ones might be holding you back?
- What would financial peace look like in retirement?
Understanding who we were and our experiences allows us to better understand who we will become. Since retirement planning is about planning for the future, this is a crucial step in building out your retirement sketchbook. Make it real. Make it personal. Make it yours.
Excerpted from Your Retirement Sketchbook: 125 Retirement Planning Lessons from Financial Experts by Jamie P. Hopkins and Bonnie Treichel, published by Harriman House, an imprint of Pan Macmillan. Copyright © 2026 by Jamie P. Hopkins and Bonnie Treichel.
