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Are you saving for your retirement?
I’m not talking about having enough money to sail through the Caribbean, or have a home and cottage too. I’m talking about enough money to keep a roof over your head and food in your belly. While the retirement ads like to focus on people being able to “maintain our lifestyles,” I’m just praying y’all have enough to be able to eat!
Psychologically, we’re more predisposed to avoiding pain than seeking pleasure. This may be part of the problem when it comes to making people see that saving isn’t an option, it’s a must-do. Most people can’t avoid the pain of not spending today for the pleasure of a secure retirement.
But what if we turn it on its head? What if instead of thinking about the “fabulous” retirement, we think about making sure we have enough to make do. How much will you need to make do? Do you even know?
I knew how much I’d need before I decided to call it quits. I’ve always lived on a budget regardless of how little or how much I made. So I anticipated which of my costs would go away (not so many yet since I still have a kid in college) and which would go up. That gave me a pretty clear sense of how much money I’d need every month to make ends meet. (Since I plan to leave nuthin’ to nobody, I’m including my capital in my spending.)
How about you? Never mind all the blah, blah, blah about travel and retirement activities. Put aside the pretty pictures of sailboats and exotic travel. Will you have enough money to eat, take care of your most basic needs like housing, and have a buck sixty-two left over for the odd indulgence?
If you’re planning to retire with consumer debt, how much of your retirement income will those monthly payments gobble up? If you’re planning to still have a mortgage, how much will your housing costs cut into the rest of your spending?
And if you’re banking on government benefits, have you determined how much you’ll get and how much more you may need to make through a part-time job or pretty creative money management?
If you don’t know where to start, or you’ve been putting it off because you’re not sure what-all you need to consider, it’s time to start figuring it out. If you use “I don’t know” as an excuse, you’re a fool.
What are you doing now that will help or hurt you later? Saving is often seen as painful because it means you can’t have all the stuff you think you’re entitled to.
But think about what your life will be like later if you don’t stick away a little something now.
With as little as 6 to 10 per cent socked away in your 20s and 30s, retirement won’t suck. If you’re already in your 40s, you’ll have to save 18 per cent to make the plan work.
Measure the pain of today against the pain of the future. Then stop worrying and start doing something.