Time for a taboo #moneymonologue topic.
Society wants us to think that retirement is something we have to wait until our mid 60s to attain.
News flash: retirement is NOT an age.
It’s another number.
25x your annual expenses to be exact.
When you have that in assets (investment balances, dividend/interest income, cash savings, revenue from rental properties, etc – not the value of your home or the continually depreciating car you drive or whatever *hot* item that may or may not be worth anything that you’ve kept for decades) you can say adios to the 40+ hour/week job if that’s what your heart desires.
Do not count on your employer OR the government to fully fund your retirement. I’ve been crunching the numbers for my pension when I hit eligibility & I’d have to work another TWELVE years to take home after taxes what I do right now. Am I going to stay 12 extra years for my current take-home income?
No.
I’ll stay a bit past that eligibility date, but ultimately, I’m going to collect that monthly check & insurance coverage, & head out to find another job where I can max out a 401(k) & IRA + some taxable brokerage instead.
Additionally, I am not counting on SSI to be there in its current state (if at all) by the time I’m eligible [although I am so very thankful that, as a public servant, every entity I’ve ever worked for has paid into social security as many do not. At least my parents are benefitting from those payments].
I want to be able to live on what we do now, or a bit less. Inflation means that I have to invest on my own to get there. Cash savings making .01% at a local bank or even the current 4+% in an HY savings account will not be sufficient because inflation will depreciate its future value & the pitiful pension check will only make a dent in covering the essentials.
Is investing risky? Yes, but so are so many other things in life – but that doesn’t stop us from doing those things!
Furthermore, do not count on a paid professional (aka financial advisor) to always have your best interests at heart – some will talk you into buying an investment that pays them well not what will meet your money goals; that’s another topic for another day. Also, just an FYI, whole life insurance is a horrible investment tool for retirement needs 😎
