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To People Who Want to Quit Work Someday
By Mike Rowan for www.Erollover.com 2008
How old are you today? Have you started investing in a 401k, Roth IRA, or Savings Plan? Have you ever thought about when you will retire, and how to afford your life when you reach retirement age? If you really want to quit work someday and enjoy a high standard of living when you retire, please give the following some thought!
What are you waiting for?
Some people do not even want to think about retirement or 401k plans today. It is very easy to live in the now, and to ignore the fact that retirement will be here before they know it. Some people would say, ‘I am still young, why should I think about my future or retirement today?’ Well, it is very true that nobody knows what will happen tomorrow. If you have chance to plan your future earlier with a chance of getting a better retirement, why do not you start from now? Which one do you prefer, an enjoyable retirement, free from worry, or would you rather spend your golden years scrutinizing every penny that you have earned?
Start Saving!
I emphasize saving for two reasons. One is that it’s essential. No saving, no retirement. It’s that simple. And the sooner you get into the habit of regular saving, the better your chances of being able to retire in comfort.
That being said, I agree that some advisers and financial planners can get too strict. They create the impression that unless you’re salting away most of your salary you’re a spendthrift. Sure, contributing to 401(k)s and other retirement accounts is crucial. But you don’t want to go through life feeling guilty every time you treat yourself to dinner at a decent restaurant.
I mean, you do have a life to live before retirement. And what’s the point of retiring in comfort if you lived a pinched existence during your career? What’ll you do in your dotage? Reminisce about how much fun it was to forego family vacations so you could boost your 401(k) contribution rate yet another percentage point?
Clearly, retirement planning has got to strike a balance. You want to save enough so you’ll be able to enjoy retirement. But not so much that you can’t also live a satisfying life during your career.
Just try to live below your means!
I think the best way to achieve that balance is to adjust your expectations so that you’re content living a little bit below your means. Let’s say your salary is high enough that you can buy a Mercedes, but doing so would require you to spend every cent you make. Well, maybe you decide to go with a moderately priced Toyota instead so you have some dough left over that you can plow into retirement savings.
It’s that sort of reasonable compromise you want to shoot for in retirement planning, whether it’s choosing a car or a home, planning vacations or whatever.
Don’t go to extremes with your financial life!
Try to avoid going to the extreme end of anything in your financial life. If you try to live like a millionaire while making 30k a year, rest assured that this lifestyle will have consequences in the future. Rather, you want to make choices that will allow you to live comfortably, but not extravagantly during your career, which should also allow you retire without having to ratchet down your standard of living.
Mike Rowan is the co-founder of erollover.com, based in Atlanta.
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