This article about being able to retire well caught my eye yesterday for a number of reasons. The first, of course, being the idea that people are panicked about the state of their retirement accounts, but they shouldn’t worry – they can still have a good retirement. I shouldn’t be one to worry, with 30+ years til retirement, but I like to plan ahead. The second thing that caught my eye was this quote:
“One of my daughters in her 20s said, ‘If I put it in the market I’m going to lose it, and if I put it in the bank I won’t make any money, so I might as well spend it.”
Clearly not the best plan, yet I know that it’s a plan many of my friends and co-workers are following. While I am putting money into my TSP and my Roth IRA, mentally, it’s difficult to do, especially when the accounts are falling. 2008 was a hard year to invest, but I did it anyway because I know that 30 years down the road, I will be glad I did it. For the most part, I try to not think about my retirement accounts. I won’t need them for years and years, so I should just keep socking money away and not think about what’s going on with the money. Of course, you can’t just invest blindly, but I know that my money is in good solid funds, so I need to just trust that things will turn out. And if the status of the funds I have invested in starts to change, then I will have to rethink my plan.
I admit, I’m a little obsessed with retirement calculators. I want to know what that magical number is and what I need to do to get there. And then, as soon as I find out what that number really is, I panic. How in the world am I ever supposed to save that much money? This article addressed that as well.
“To begin with, stop making a fetish of The Number — that fearsome string of digits some online calculator or investment adviser said you need to retire comfortably. Retirement is not an all-or-nothing contest like a basketball game, where losing by one is just as bad as losing by 40.”
That’s something we should all remember. While we all want to save as much as possible so that we never have to worry in retirement and possibly even leave some money for our heirs, you do what you can. If you come up short, you’ll make it work. Just don’t come up too short.
I’ve gotten better about not checking the status of my retirement accounts every day. I might glance at them once a week, just to see the general movement. If it goes up, great. If it goes down, oh well, things will improve later. Besides, I still have a lot of years to work. Might as well focus on the present and not the distant, distant future.
Megan is a 40-something government employee in the Washington, DC area. She got interested in Personal Finance when she got out of college and realized that her paycheck wasn’t going to go as far as she had hoped. Since starting this blog, she has managed to buy a house and make a solid start on her retirement goals, and hopes to help others do the same. Here is her story:
In 2007, I was a gainfully employed 20-something with no debt but not a lot of knowledge about personal finance. It was a co-worker’s comment about Roth IRAs that sent me to the internet, searching for information. It was then that I realized that I really didn’t know a whole lot about personal finance and that my current financial situation was due a lot to inherent frugal tendencies, generous family members, a fear of debt, and good luck. While that was working for me, clearly I needed a better plan.
While I had no debt, I was also pretty much living paycheck to paycheck and not worrying about going over budget (I say this as if I had a real budget) because I had an emergency fund set aside to cover any overages.
Except that’s not what an emergency fund is for.
So I did a lot of research, read a lot of blogs, and decided that I needed a plan. I needed to budget. I needed to know what I was spending my money on. I needed to prepare for the future.
I decided to create a blog not only to make myself accountable to others but also to share the knowledge that I gained along the way. I’ve learned so much from my fellow bloggers, and I hope that my readers can find something useful in what I have to share as well.