Insert Click Bait Title Here
I read an interesting article on Business Insider today. The article was titled “Here’s how much money you need to save to retire on a beach and play golf all day by age 40.”
So, obvs… a little click-baity.
But click I did.
And the article didn’t contain anything I didn’t already know. It spoke about using the 4% Rule as a guide to retirement and it has a graph chart to help you visualize that if you click through.
But one paragraph did stick out at me:
“To get to your goal, saving sporadically simply won’t cut it. Even saving 10% per year consistently during your career means you’ll have to work nearly 52 years before you can afford to maintain your lifestyle in retirement. If you’re 22 today, that means getting a paycheck until you’re in your 70s. If you only save 6% — the average savings rate in the US — you’ll have to put in 62 years before you’ll have enough saved to match your current income in retirement.”
Fifty-Two years of working your ass off just to retire at age 70. That is… pretty intense.
I’m working with my husband to make sure that is a reasonable goal for us to aim for and right now it does seem reasonable.
He doesn’t think he’ll want to retire ever (we’ll see about that), but I know that my full-time job is not going to be something I will want to do forever. I do intend to keep working my side-job into retirement (that’s a gig that is limited in how much money it can make us), so we’ll hopefully have some income from me at that point, but I really want to be done working by 55.
That seems like a “Pie in the Sky” dream when I tell it to people – but the thing about finances is that it’s all hard numbers. As long as you make your short term goals each month, the numbers will never lie to you.
And when I say retire… I don’t necessarily anticipate insane beach vacations at expensive all-inclusive resorts. I anticipate more like having the same life I have now but with less work and more dogs rescued.
Not too lofty of a goal, I don’t think.
But there is more to this paragraph that is interesting to me. Or terrifying. Take your pick.
The average savings rate in the US is 6%. SIX PERCENT.
My husband and I are saving 30% of our incomes in 401ks and retirements accounts, extremely adamant about reaching the number that the 4% rule teaches us is important, and socking away as much extra fundage as we can via things like Acorns, extra Roths, and other savings vehicles and we’re working our assess off to get there.
How terrifying must it be to only be saving 6% and to not really have a clue as to what your future retirement will look like (or even if you’ll ever be able to retire)?
Is it only terrifying to me?
Are people just of the mindset that they won’t think about it in the present because they’ll just let their future selves deal with it?
Let me let you in on a little secret, Basic Bitches. Your future self? She sucks. She’s tired and she’s lazy and she is busy with work and PTA and aging parents and all sorts of shit. If you don’t take care of yourself now? You never will.
So here are just a couple of things you can do RIGHT NOW to jumpstart your retirement savings and give your future self a teensy little break.
Action Item: Do your future self a favor and bump up your retirement savings by 1%. Right now. 1%. Do it.
If you don’t know how to do that, e-mail your HR or benefits person and ask them how. That’s all you have to do. It takes 30 seconds.
I have mine auto set to update by 1% every January. I never even realize its happening and it’s such a small amount that my overall budget never feels it.
The problem that I see is that people will start their retirement savings accounts when they get a job that offers one (if they never get a job that offers one, do they ever start one? I really don’t know!). Then they leave it alone. Forever.
Maybe they initially start with enough money to get whatever match their employer offers. But then it gets ignored and out of sight equals out of mind.
Do it now. Seriously.
Action Item: Set a recurring calendar reminder on your Outlook or Gmail or whatever to revisit your 401K every January (or July or whatever month works for you) and then when it goes off, REVISIT YOUR FUCKING 401K.
My husband and I call this “The State of the Financial Union” and each year (well, more than yearly because I am a psycho) we do a quick check in to see how much we saved (or didn’t save depending on house projects, etc…) and where we want to be at this time next year.
Look, make this shit as easy on yourself as it can be. Be better than average. Don’t work for the next 52 years if you don’t have to. Just do the thing.
And remember. Your future self is a lazy fucking bitch and it’s your job to set up the future for her so that she can be as lazy as you dream of being right now.