Keeping an eye on the big numbers of retirement

Critics panned it, but there's a great line from the 1979 film "The Main Event" that pretty much sums up our weird relationship with money.

Barbra Streisand played an entrepreneur who has just learned her business manager has run off with virtually all of her financial assets.

"When you say I have no money, do you mean I have to be careful at Saks or I can't afford toothpaste?" she asks another of her advisers.

And there you have it. There are the big numbers in our lives — the final pay stub, the 401(k) balance, the net-worth statement, the debts owed.

But the numbers mean very little without context.

Amid all the financial-market crystal-ball gazing at the recent Morningstar Investment Conference in Chicago were a few takeaways investors can use to improve their retirement outcomes regardless of when the bull market ends:

Having a positive money role model — someone whose financial life you admire but that is pretty close to your own financial circumstances — was associated with positive feelings of financial well-being in a Morningstar study by the data firm's Sarah Newcomb, a behavioral economist.

And it matters to whom you are comparing yourself, the study found.

Keeping up with the Joneses — or always striving to outdo friends, family and neighbors who appear to have vastly more — led to negative feelings of well-being, while making comparisons to the less fortunate created more positive feelings.

That's intuitive, but hard to change, Newcomb said. For the healthiest comparison, think about someone whose financial life you admire and why, she said. What decisions or behaviors got them there? Do you have any of those qualities? What is one thing you could do right now to be more like them?

The exercise is designed to get participants to see themselves in the role models' behavior and emulate it.

This one is really tough in a long bull market, but Nobel Prize-winning economist Daniel Kahneman noted that the ultimate goal of a portfolio shouldn't be profit maximization.

Using this philosophy, some money managers create two distinct portfolios for clients, representing the highest and lowest levels of risk the client can or should handle, he said. The separation tends to give a comfort level to investors that they are getting enough exposure to high returns but with an anchor of conservative investments.

Retirees often think of this as a bucket strategy, keeping money that will be used for living expenses in the near term in conservative investments, with riskier strategies for money earmarked for years down the road.

Fidelity recently took some internet grief for its chart suggesting how much people should have saved by various ages, in multiples of their income.

It's similar to what other firms have suggested, and it attempts to offer a pathway to the longtime suggestion for people to save about 10 times their final pay in a lump sum to be able to afford retirement.

The understandable backlash came from younger savers who have scant job opportunities, soaring college debt and paltry pay. The stark reality, though, is that the average pre-retiree is on track to replace just 51 percent of income in retirement, and that's including Social Security, said Steve Wendel, head of behavioral science at Morningstar.

The key is for individuals to figure out for themselves what they will need and work on any shortfalls with a multipronged approach, he said.

Rather than drastically cutting living standards or "working forever," as many exasperated workers tend to imagine, little changes taken together can make a big impact, he said.

Think about delaying your retirement to age 67, scaling back a bit on lifestyle expectations and contributing at least 6 percent of salary to retirement accounts if you are just starting, he suggests.