We’ve all heard the news about baby boomer retirement savings. In a recent poll, 24% revealed they had no savings outside of home ownership. I’m not in that boat, but there are a lot of reasons Mr. Boomer and I don’t have a larger amount.
Parenting
Raising kids increases expenses greatly. There’s the obvious expenses of food, clothing, and education. I think the biggest purchase we make, a home, is largely influenced by whether you have kids or not.
Without kids, would you care about the quality of the school district? Do you need extra bedrooms, bathrooms and a play room? We don’t regret the choice to have kids, but it is a financial sacrifice.
Career Choices
I never thought about income potential when making career choices. It was all about whether I could get a job doing it and if I liked it. It would have been smarter to find something that met those criteria in a high paying field.
Don’t get me wrong, I ended up doing okay but could have earned more earlier if potential income was a factor in future careers.
Divorce
My husband and I each have previous marriages and both started over in our thirties. We didn’t recover the assets given up in our previous marriages, but have managed to build new, smaller nest eggs.
There’s no doubt that in general couples that never divorce are better off financially than people that do.
Move On
These are just a few reasons people not have the amount of savings that could have been. There are probably many, many more. They don’t matter.
At the end of the day, we should be prepared to retire with the security that there’s enough money. Figure out what you need and start planning on how to get there. It might mean working longer, downsizing homes or moving to a lower cost area.
There’s nothing more important than being prepared for the rest of your life. What decisions have prevented you from saving more?
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It’s important to understand why you don’t save more but what I think is of greater import is what you are going to do now to make sure you save.
In the past I didn’t give retirement a lot of thought and missed out on a lot of potential saving and investing. Lesson learned. Now I realize we have to plan now to put money away to make sure our later years are comfortable. What we do now has ramifications on our family and financial future.
Nothing! Nothing prevented me from saving more and that would just be an excuse anyway. I do not believe in excuses. If something prevented me from saving more money, then I need to work harder to overcome whatever stopped me.
It was 1984 when my husband brought home information about something called a 401k. My parents and his had never heard of it . I read all the paper work to get the gist of it . (there was no internet so Goggling it was not even thought of ). I remember thinking with this thing pensions are going to go away and well have to cover our own retirement.
We were living paycheck to paycheck. (and I know how to pinch a penny -you would laugh if I told you some of the things I did to make ends meet ) I later found out we would have qualified for food stamps – so contributing to the 401k was out of the question at that time . Two years later – tired of being overworked and underpaid husband got a better job with a decent raise.
On my insistence we began then to contribute 5% into the 401k to get the 3% match . Each year we raised it at least 1% . (Until his income got high enough that we maxed it out ) We now do Roth accounts as well, as well as the 5K catch up for folks over 50.
We did not drive fancy cars or buy more house or car than we could handle so we could still pay into the 401k and save for our children to go to college. No cable until the 90’s , internet or cell phone until 1997 . think Eating out was a treat . Sales were the way to buy stuff. Vacations spent with relatives, credit cards paid off in full each month. Kids went to public universities and are working. They are also credit card debt free..
Bit by bit choice by choice we are the millionaires next door . You would never know – we still drive our modest cars till they wear out and eat out with coupons . My cell phone is prepaid and costs me $100/year. Soon our portfolio should be able to support us and the lifestyle we want to maintain.
You can do it do . Just decide to make yourself the priority.
I have three reasons why we don’t have more money saved: Kid1, Kid2 and Kid3. You are so right in your assessment. It isn’t just the daily expenses, but the house you buy, the career you choose, the sports, the tuition, the everything. However, they are worth every dime we spend and every emotion they evoke. I couldn’t care less about money. I want security, but I can wait for it.
I was partially responsible for the financial obligations of a relative for some time… say what you want, but I think this falls under a valid excuse.
I think a little bit of greed, and a little bit of desire to just live it up more has prevented me from saving more.
I feel I need to spend more, and not save so much!
Had I known a little bit more about money when I was younger, I would also have selected a career more carefully. An anthropology degree doesn’t get you very far! 😉
At least now I’m on the right road (I think!) If all else fails, I’m not opposed to moving out of the country to retire comfortably.
Our retirement savings are great…but I had the desire to start saving for retirement when I was 16. I didn’t know what an IRA was, what stocks were about, or anything, and it all intimidated me. Yet I knew in my gut that I should start that early and give myself a real leg up. Unfortunately I didn’t, and instead started at 23 (not bad). That’s the only thing that held me back–fear of the unknown.
I was partially responsible for the financial obligations of a relative for some time… say what you want, but I think this falls under a valid excuse.
I love how you mentioned Career in this post. There’s a large reason why I’ve stay/stayed at my current job and with my current position– despite not actually loving and liking what I do everyday…
There’s is a job at the company that will be opening up in 3 to 5 years when we are out of our hiring freeze when a coworker of mine retires… my IDEAL job… with good benefits and i’d get to keep earning more service years with my current pension system too. Right now they are slowly training me for it so they don’t have any weird transition time and so the gal who has the job will actually be able to take a vacation and enjoy herself. She also loves the help in the summer busy times so its a win win all around.
If I were to leave that department or the job all together I’d loose out on the job in the future because they like to promote from “within.” So it’s a trade off i’m willing to make. 3 or 4 more years of grunt work, and then i’ll be making better money doing something I actually would LOVE to do.
Mine would be conservative investing – I put plenty away but it grows very slowly. Education will also be one for me – my MBA program will wipe out all my non-retirement savings, but hopefully it will pay off in the long run with a higher paying career.
An important aspect of successful financial planning and investment, is doing adequate research and consideration before making a commitment on specific financial institutions and savings account opportunities. One of the biggest mistakes I’ve seen is from those who have become bogged down by previous credit debts without leaving much room to work with before any substantial savings amount has been collected. The easiest way to allow your savings to grow is to ultimately avoid debt and high interest rates on credit accounts from the very beginning.
I made some bad investment choices (too much savings in my company 401K which was mostly my company stock that nosedived in 2009).
My children have certainly had a big impact too as daycare alone was almost $16K, not to mention that vacations are much more expensive buying 4 plane tickets instead of 2, but we have a richer life too, so it’s all good.
Lastly, we’ve never had a “trailing spouse” I don’t know if that’s good or bad, but we both have reasonable careers at decent pay. We’ve had a few opportunities where one person could make a lot more money but at the expense of the other’s career and we chose not to go that route for many reasons.
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