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? Reminisce about
how much fun it was to forgo 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.
Please visit our site for more retirement and 401k
details:
www.erollover.com
