Yeah, this "contrarian view" of saving too much for retirement is making the rounds and getting quite a bit of press as of late.
I've said it before, and I'll say it again: I think this notion is utterly preposterous. Preposterous!
If one plans on retiring, say for 20 years starting at age 65, and decide that it would take a minimum of 30k a year to be able to retire comfortably, that basically amounts to no less than $600k in retirement savings. And that's the bare minimum!
Yes, I know this math is being overly-simplistic, but I don't think it's
unrealistic and enough to get the point across. This is especially true if you consider someone like me, who won't be retiring for at least another 30 years. By then, that 30k a year will only be worth 15k in today's money! In my mind, if I don't hit at least a million in retirement, I highly doubt I'll be retiring on time and in comfort.
I also contend that I am
not squandering my youth. There are some things that I still enjoy that costs me quite a bit of money. Specifically, I've decided that I enjoy dining out too much to have it cut out of my budget. Admittedly, part of that has to do with coping with divorce, but reasoning aside, the point is, I cut back on places that isn't as important to me, and I keep those that still are. I think the term "squandering" is a bit harsh.
Actually, I take that back. Yes, I do think that the youths today are in fact "squandering" it. How you ask? By not minding their finances as closely as they should. Like the cautionary tale of Pinocchio, our excesses can end up imprisoning us through borrowed money, and thus, borrowed time. Borrowed time! Exactly the thing that these contrarian doomsayers are warning us against.
In my personal opinion, pushing hard towards your retirement savings for example, is exactly what you WANT to do when you are young. You can get away with so much more when you're young. You can work longer, not get fatigued from it as quickly, and you have time to recover from life's setbacks, and do it much more quickly.
Plus, by pushing hard early, you actually BUY BACK TIME(!) by giving your money time and the boost it needs to COMPOUND! And anyone with any basic knowledge in finances knows that compounding interest is argueably the most critical component for long term financial growth.
Now, I know that some will say, "Oh, but what if you die before you can enjoy it?" Yes, that can and does happen, but ever since I was 16(!), a great high school friend of mine has been saying that. "Dude, what if I get run over by a bus tomorrow? You gotta live life now! Carpe Diem!" The last time I heard him say that was when I visited him last Novemeber... almost 16 years later. He's a great guy, but the manner he's been seizing his days has now caused him to become TRAPPED in a mountain of debt! His accountant wife has confided in me that it will take at least 5 years before they have enough room to start saving! Things are so financially dire for them that they've even gone as far as taking out loans against their 401k.
I don't know about you, but I INTEND to live long enough to fully enjoy my retirement and then some. Besides, the statistics of accomplishing just that stacked well in our favor. I myself have been beating the odds for a good 32 years now.
And again, I don't think that I am making myself miserable due to frugality. In fact, most of my misery has nothing to do with frugality believe me.
Better yet, if you work hard enough and early enough, you may even have the luxury of being able to semi-retire or even retirement early! Think about that. Even though my parents have made decent money, they were also frugal. Now, as they approach their 60's, they're thinking about retiring early. Why? Because they can!
That said, I won't go so far as to say that these doomsayers are entirely wrong. There just may be some who already have a nice, healthy nest egg, and could probably stand to enjoy money a bit more in their lives. I suspect it's a very small minority that fits in this category though.
Some day, I would like to do that too. BUT! In order for me to get to that point, I must push hard first, while I'm still young, until my nest eggs are indeed large enough for it to take over and grow on its own. Then I'll be more than happy to ease up and enjoy my life a bit more. And I'll be able to do so comfortably, knowing that money is working for me rather than the other way around.
And don't even get me started by implying that I don't have a short term and mid term financial strategy. They can be surmised quite easily by reading my signature. But that's enough ranting from me for now.