By: Revanche

Saving too much? Heavens no!

January 30, 2007

Both Wanda and mOOm have touched on an article and a subject near and dear to my heart: Could you and I possibly be saving too much for retirement?

You’ll have to let me know what your situation is, but I would NOT make this generalization about anyone, even PF bloggers, and most especially not for myself. Why? Because of SingleMa’s appropriately timed question today about Bailing Out Family Members in Financial Trouble.

Call me a pessimist but when I’m considering the future I’ll probably have more dependents rather than fewer, I don’t consider Social Security a viable source of retirement income and I imagine that healthcare will only remain a high expense. On top of that, there’s always the X factor of family members in need. For that category, I’d really only consider my parents eligible for support because unless there’s a true emergency, I am determined not to become the Bank of Ducky. I can guarantee that my parents, while not terribly spendthrifty, haven’t got anything put away specifically for retirement.

So personally, I can’t see where I could possibly be making a responsible decision by saving LESS than what I’m saving now. I think that’s the core of the issue for me: I anticipate heavier financial burdens
to come in the future and it would not make any sense for me to back off. The examples given in this NY Times article of those who are more than well-prepared for retirement implies that there are numerous people who are entirely prepared for retirement. Look around you, does that seem to be the case in your life? I can think of a few exceptions, Moom’s mom, TBH’s parents and “in-laws”, probably BoyDucky’s parents, and a couple of very wealthy friends who were born into money. That’s the sum of it for my friends and acquaintances, blogging community and all.

It’s really best to evaluate the statements that all these “experts” are spouting and decide for yourself what really truly applies to your own wallet and how you might want to act on the newly issued advice of the month. After all, you’re the one who has to live on that retirement money!

And for the record, I don’t think I’m squandering my youth if I miss out on a few unfinanced adventures, I’m saving my middle aged years from stress!

2 Responses to “Saving too much? Heavens no!”

  1. Anonymous says:

    I think the point of the article is to think about how much you really need. Don’t get scared by some broker saying you need $x million into saving too much. But if a proper analysis taking into account your exact personal situation says you need to save more then do so. These guys “retired” with $1/2 million:

    http://retiringearly.blogspot.com/2007/01/extreme-early-retirement.html

    But you may well need to save much more. My point isn’t that my Mom has $2.5 million she doesn’t touch but that she lives on $15k a year. Of course my father had no idea that the artwork he’d inherit would be worth anywhere what it was worth… but even without that he didn’t need to save as much as he did.

    And even so I’m not planning on stopping saving furiously 🙂 In my 20s though I wasn’t saving at all and I wouldn’t go back and change that (and I didn’t expect to inherit much back then etc.).

    So I guess some of us now in our 40s are saying, if you can save when you are young, do it, but if you can’t don’t worry too much about it.

  2. I’d rather save more than squander it away on meaningless items or fancy vacations like you said.

    It’s possible to enjoy your youth without spending a lot of money. What matters is who you spend it with not how much.

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