Quote:
Originally Posted by Johnny199r
These days, people are living longer, university tuition and houses cost more than ever and pensions are being eliminated from many work places. There's a great deal of personal responsibility needed for people to plan accordingly for their retirement.
Are you putting enough money away for retirement? Do you have a realistic estimate of your yearly living expenses in retirement? Or are you, like some, planning on never retiring?
It's strongly advised that you start putting money away as early as you can, in order to take advantage of compound interest: http://www.moneychimp.com/calculator...calculator.htm
I've always been a saver and am constantly planning for retirement. I've whipped my woman into shape after years and years of her being in debt (she'll have all of her debt paid off this summer at age 36, after spending all of her money on "good times" in previous years).
It seems most of the co-workers I know (I'm a government lawyer) don't really set much savings aside (nice cars, big houses, going out for lunch most days, while some are still paying off student loans)
I get a DB pension with the government, but I save like it's not going to be there, or if it is, it will be in a severely reduced form from today's current state. I hope to be able to have a good retirement at 55 or 60. I don't want end up like some of the 65+ year old guys in my office working (I have to make sure not to get divorced like they did, fingers crossed). |
Other than the humblebrag point already made earlier in the thread, the bold line from the OP is the thing that stood out to me.
When has it ever been anyone other than your own responsibility to take care of your own retirement?
The rare golden handcuffs like DB pensions seem really rare to find, they seem insane for any rational business to offer their employees. The OP is wise to live as if it won't be there when he's retired... even a government might not be able to fulfill the obligation.
OP is right about compound interest, but most people are lousy at allocating their savings in assets that actually earn compounded interest. A HUGE part of this is putting their nest eggs with "advisors" that take huge fees to manage the money... straight into funds that have huge fees for the same damn reason. It's quite the racket.
Here are a few other things that I've grown to consider with respect to retirement planning and personal financial management.
- No one in this thread discussed how much they invest in their health. How often are you exercising, measuring and managing stress levels, monitoring blood test scores that are relevant to you, had your genome mapped, eating food that is right for your body, monitoring how you are responding to your environment? What's the point of saving for some point in the future if you're not being a good custodian of your health and ensuring longevity with a good quality of life?
- "Saving" is equal parts - earning more, spending less, retaining a portion in properly allocated asset classes for your risk and stage in life. Too many people are focused too much on one of the three.
- Mentioned several times in this thread - enjoy the ride up, too. Put a portion of your earnings towards satisfaction in the now. Rewarding yourself for meeting goals, and giving.
- Manage your affairs and relationships well... Be on the right side of social contracts. Be an asset owner instead of just an employee, don't get married to the wrong person, don't go into business with the wrong person, don't go to prison, don't over obligate yourself in debt agreements, own assets where you can respond to inflation/deflation, be insured properly, have a current will... probably more here but I've never really thought to write these out before.
- Mortgages are a huge liability. Pay the next payment's principal every payment you make and you'll save thousands of dollars in after tax interest over the span of your mortgage.
- Look at your finances like a business. If you don't know how to read and prepare a basic financial statement, learn how as soon as possible.
- Time is the one asset we cannot acquire more of. Be good with your use of time.
My personal plan is one thing and I question it all the time. I'm constantly sending PMs to Slava spitballing random ideas and questioning what my assumptions and plans are. What I've come to find is that it is difficult to stick to a path when your emotions on a day to day basis can change your perception of risk.