Everybody on here under 40 should be listening to these views of retirement and bumping up their contributions.
Early on, I decided that we'd increase our retirement contributions by half of any raise, rounded up to the nearest percentage point. I.E. If my wife got a 5% raise, I'd increase her 401k contribution by 3%. There were good years and bad years, but they average out and after a few years, we were both maxing out our 401k's every year and now we have to lower our withholding percentage if we get a significant raise. We are also lucky that our employer offers a Roth 401k option, which increases the effective amount that we can save.
We keep our expenses low for our income. I did take a loan out for my new tractor, but only because it was 0% and I can do better with that money in our investment accounts.
Because our monthly obligations are modest and we save aggressively, I'm not dreading retirement or worrying about how we're going to make ends meet. Instead, we're traveling a lot right now for vacation and to simultaneously scout places we may want a winter home when the time comes.
My father had a lot of expressions he'd repeat to me over and over when I was a kid. Things like, "Save early and save often," "The most important dollar you'll ever save is the first one," and "Never collect anything but money." I took it to heart and, barring any major catastrophes, can live my adult life without having to worry about how to pay our bills every month or what will happen if one of us loses a job, a car implodes, or the roof caves in.
I push the younger kids where I work to participate in the 401k by putting away as much as they can spare, and then to increase their contribution when they get raises (so they never miss the money). Watching friends that I went to high school with buying expensive things, driving new cars every couple years, and taking extravagant vacations on less income than I had was frustrating. A funny thing happened though. Because I was saving, I ended up ahead of my finances where they were (are still!) just working to service their debt.
I'm very grateful to my father for pushing the concept of compounding interest and encouraging delayed gratification. I wish he was around to thank.
Early on, I decided that we'd increase our retirement contributions by half of any raise, rounded up to the nearest percentage point. I.E. If my wife got a 5% raise, I'd increase her 401k contribution by 3%. There were good years and bad years, but they average out and after a few years, we were both maxing out our 401k's every year and now we have to lower our withholding percentage if we get a significant raise. We are also lucky that our employer offers a Roth 401k option, which increases the effective amount that we can save.
We keep our expenses low for our income. I did take a loan out for my new tractor, but only because it was 0% and I can do better with that money in our investment accounts.
Because our monthly obligations are modest and we save aggressively, I'm not dreading retirement or worrying about how we're going to make ends meet. Instead, we're traveling a lot right now for vacation and to simultaneously scout places we may want a winter home when the time comes.
My father had a lot of expressions he'd repeat to me over and over when I was a kid. Things like, "Save early and save often," "The most important dollar you'll ever save is the first one," and "Never collect anything but money." I took it to heart and, barring any major catastrophes, can live my adult life without having to worry about how to pay our bills every month or what will happen if one of us loses a job, a car implodes, or the roof caves in.
I push the younger kids where I work to participate in the 401k by putting away as much as they can spare, and then to increase their contribution when they get raises (so they never miss the money). Watching friends that I went to high school with buying expensive things, driving new cars every couple years, and taking extravagant vacations on less income than I had was frustrating. A funny thing happened though. Because I was saving, I ended up ahead of my finances where they were (are still!) just working to service their debt.
I'm very grateful to my father for pushing the concept of compounding interest and encouraging delayed gratification. I wish he was around to thank.
