From time to time I write about money. Saving, spending, splurging, and thinking about the future. My childhood and lack of having many things as a child has created a passion inside of me that forces me to make sure that we never have a moment in our life where we have to wonder if there will be food on the table. Chris and I always try to have a back up plan. A Plan A, B, C…Part of the passion I have for living within our means, and saving for the future means that I stay interested in current personal finance trends and different ways of thinking about what you might need to do now to prepare for retirement.
This recent article from LearnVest shows an interesting infographic depicting what giving up a few things can mean for someone thirty years from now. If you scroll down to the middle of the page you will see an image of a pack of gum, with the description that if you cut back on a $2 pack of gum a week you would have $16,652 more for retirement. A $10 glass of wine on the weekend would be to the tune of $83,260 at retirement. The last one is mind-blowing (Chris are you reading this)? If you cut back $100 of your cable bill per month it would be $832,597 at retirement. It makes you think, right?
Thinking about retirement at 20, 25, 30, 35 and up is a very real and crucial aspect of our life. Often though we are barely paying our bills or student loans in our 20’s to 30’s and so retirement is the last thing on our list. I can imagine that many of us could cut back on paying $100 on cable each month, or get rid of it entirely. There are so many online options for entertainment. Regardless of what “thing” you could cut back (or eliminate) from a material consumption standpoint, the key is really to make a focused effort to think about what and how you are preparing for retirement. Have you thought about it? Will you be able to support yourself when you retire? Long gone are the days when your company supported you after you retire. These days a 401(k), IRA, and other options are the basic ways we kickstart our path towards retirement.
While retirement, saving money, and cutting back is not the most glamorous of topics, in 10, 20, or 30 years you may just realize how much you will need to put away each year for retirement and how much time you have lost. A good reminder that pertaining to money: this shit gets real… fast.
I can remember when I was nine I had my own paper route. I delivered the evening paper, which meant that after school I would come home, roll and rubber band each newspaper, load them onto my bike and begin delivering them. Rain, shine, snow, and slush. There were gross snow days where my dad would come home early and we would load up my papers in the back of his truck with the tailgate down. I would sit on the tailgate with my legs dangling and he would take me on my route, stop at each house, and I would jump off and throw the newspaper to its spot on the subscriber’s porch.
coin changer like the one I had for my paper route
I sometimes loved those snowy days, as cold as they may have been, just for the chance to hang out on the tailgate, and know my dad was there with me driving along. My money memory is from my paper route. I cannot remember if I actually got paid for delivering papers, or if the only payment was through tips. Each month I would take my collection book to each subscriber’s house and collect the amount they owed for the newspaper. Often I would get a tip. Tips ranged widely in amounts and really depended on who answered the door that day. The generous wife, the miserly husband, the kid who would just pay me the exact amount. Usually the best tips were around Christmas time.
It was a tough time for my family, my mom often worked many jobs to help ensure there was food on the table. I would give my parents my tip money so they could put it in my savings account, and many years later I found out that my parents were not putting it in my savings account, but that my tips were being spent. Maybe it was for the electric or phone bills, or maybe for the food on the table. It does not matter now, I will always remember that as my first money memory. Not the best lesson to learn, but maybe that is what has made me so careful with my money now.
Have you thought about where you might want to retire? I have not. Maybe it is my age, but I still feel like I have too much to experience in life before I know what I want to do in my retirement. However, whether I know where I want to retire or not, I am going to do all I can to plan for how I will support myself in retirement. The place will eventually be clear to us. In the meantime, we are doing what we can to put ourselves in the right financial place for retirement.
I have strong opinions about setting up a plan for saving for our future. I will tell you why. Just like you might eat well, or exercise so you can be around for many years to come for your children, you have to do the same with your financial future. When my parents passed on, they had not a single penny put away for retirement. I do not blame them. They had to use whatever income they did have to make sure we had food on the table. My mom often worked a few jobs to make that happen. They did not have the luxury to even think about their retirement, and yet when they passed on in their fifties they had not a penny to their name. I have no idea what they would have done if they had lived. Would I, or my siblings be taking care of them?
Life is different now. It used to be that folks would have a pension and Social Security. These days I am not sure that Social Security will be around when I am in retirement. Because of that possibility, Chris and I believe we have to do our own part to ensure we have the funds available to retire. If Social Security is around then it will just be icing on the cake. Yet, according to Fidelity Investments, “41% of couples surveyed in 2011 do handle retirement decisions together—which leaves about one in six couples who don’t.” It is an interesting article, definitely worth reading further.
Yet, I am a bit shocked. 41% is not enough. I am grateful for the 41% of couples that are talking, but what about the other 59%? And, of the 41% that are talking, are they saving, or just talking? How many of you are taking care of your future? Have you begun saving for retirement? It is not an exciting topic, but an important one to ensure that we can continue to live, retire, and enjoy our future.