This past week I read an article about a 77 year old former CEO who used to make $100,000+ a year in salary who now flips burgers for $10 an hour. By not saving for retirement he is finding how hard it is to find a job that pays him well. Like I previously posted the #1 reason you need to save for retirement is the age discrimination everyone eventually faces.
Yahoo has a first person feature where people post articles about how they manager their money. This author posted on how her family can’t survive on $100,000 a year. Are you frickking kidding me??? That isn’t the only poor decisions she has made as you can read here. In Hawaii the most expensive state in the country you can still live pretty comfortable here and still save with a six figure income. Despite all her bad money moves she still believes that her family will end up as millionaires. If you agree with her money moves I would like you to hit the X button in the upper left hand corner. What they both have in common:
Using family as a crutch. In both cases they are using helping family as an excuse. Unable to say no to others is an excuse to not manage their money. It’s not a want or need, it becomes lack of self control when others can dictate where your money goes.
Paying for their children’s colleges at the expense of retirement. You don’t owe your children a college education. Educational funds can always be borrowed, retirement funds accumulate over a long period of time. People appreciate things more when they have to earn it.
Believing there is always time to make up any shortfall. There will never be a good time to make up for the shortfall. Something will always come up, there will never be “enough” money for everything. Next thing you know your pants are tighter, your hair is thinning and your favorite foods you used to be able to eat gives you gas. You’ll wonder where the time went, compound interest doesn’t wait for anyone.
How do you avoid this type of retirement? Maximize all 401K and Roth IRA. Then save more if you are able. If you can’t maximize your retirement save at least 20% of your income. I can’t stand the save 6% of your income advice, at that rate you’ll be able to retire after 40+ years of working. Buy a home to fix your living costs in retirement and get the tax breaks. If you live in an area where it costs so much more to buy than rent then get a rental property in a cheap area. Start investing and keep investing each and every month through market ups and downs, do NOT be afraid of stocks.
Is it difficult to survive on $100,000 a year? Do you see yourself in this financial situation where family keeps asking you for money. Are you saving at least 20%?