Hey my financial friends, if somebody walked up to you and asked you, How much you saved for retirement? Would you answer the question honestly or would you dodge the question? The way you answer might shed light on how confident you are with achieving that magical retirement number everybody talks about in the media. I can bet some greenbacks that the people who answer honestly and without hesitation have all their finances in order, plus they might even know the exact number they have saved to the penny. On the flip side the people who have no idea how much they have in retirement, might not be saving enough thus might feel scared that they will never be able to reach that perfect retirement relaxing on an island beach house.
This is obviously an assumption but you get the idea behind how certain subliminal feelings might come to the surface when asked a personal finance question that might be too personal for some people. I totally understand how this might shock some folks to become guarded, but for the most part talking about money should not be so secretive. The one awesome behavior I have witnessed when I speak with others about money is that talking about it, triggers something within them and then they take greater notice to step it up with finances. This hopefully will lead to them being more competitive with how they manage money for the future. In addition to this it can open up great ideas or discussions with how to make more money. If the person is open mined enough to begin the money dialogue.
Now after you have released the secret CIA information behind how much you have saved for retirement. Can you answer by a percentage how close you are to reaching your ultimate retirement number? For example, are your assets currently at a level of 30% towards reaching retirement bliss? I think once you reach the 50% mark that the compound interest and the monthly contributions you make become such a huge component that will help you reach each milestone that much quicker. If you can just hold on and reach 50% you will not regret the effort you have made and now you will have time on your side for ultimate financial growth. The money snowball is growing every day as it goes in your favor, that interest you received ten years ago is steadily giving you hundreds of dollars now every quarter.
Another method some bloggers and financially inclined folks like to discuss behind the how much is in your retirement, is the good reliable X number of years’ worth of living expenses. Supposedly if you save 25 times annual living expenses you can literally retire and the nest egg should provide you with enough income to cover all expenses for life. If you stay within the 4% withdrawal rule and do not blow the principle. For example if your living expenses are 25K a year, multiply that by 25 and that will give you a nice round figure of 625K.
When it’s all said and done, people who do not want to discuss their retirement number status, maybe they feel embarrassed that they do not have enough savings. On the flip side maybe people are guarded due to protecting their nest egg if substantial, from the added risk of releasing that information. People become weird when a topic makes them uncomfortable. We can never know the reason why certain people do not want to divulge finances, but either way we have to respect their choices. I am a firm believer that if you can’t answer at least a range, then money might be a topic that can be intimidating to talk about. We never will know if that intimidation will help or damage your money life.
I struggle with completely divulging my financial information, and I guess by writing this I am trying to decide if it will help me or not to do so later on. Many bloggers release all of their assets willingly and I give them extra recognition for being brave to face something that is different from the norm. Bloggers please chime in how you feel about expressing how much you have saved for retirement without concern?
Would you be willing to discuss how much you saved for retirement?
Comment if you would like to provide what % you saved towards reaching financial freedom?
Rich Uncle EL
I don't make that much compared to some but I have a Roth IRA and I save as much as I can. I don't blow money and have a strong urge to save and sacrifice to do so. My comment is that any of it can be blown away by an accident or illness. Faith in God's provision is a guideline while I am wisely doing my part.
Yes you are right emergencies can hit at any time. A roth IRA is a great tool to help you save. Thanks for the comment.
I think you are correct in your premise that people who are actively engaged in working toward their retirement goal know exactly how much money they have. For me the number (today) is $2.307 million in investments and about $650k in my own home and $247k in a rental condo. Yesterday the number was $2,310 million. I have built myself (in my opinion) quite a complex spreadsheet to track all investments and do some retirement projections. It even does some Monte Carlo analysis and based on my assumptions, I could actually retire now if I keep my retirement income to ~$90k per year. What has all this done for me. I think it has helped me keep my eye on the ball and it ensures that saving for retirement and saving in general gets at least as much attention in my life as who is going to win the Superbowl. BTW, I am 50, married, one daughter who will be going to university this fall (my spreadsheet includes spending for her education too), no debt. I am going to venture a guess that most people who read your posts are in the same position as I am. They know where they stand financially and know what they must do to reach their goals.
I think you are set for life my friend. That's awesome that your plan for financial freedom worked. Even doing Monte Carlo, wow thats great. Thanks for the comment.
We're over $500K so far and keeping it going! It's hard to say, but I'm pretty sure we're above 25%.
500k wow your closer than you might think. Remember when people retire expenses drop by about 20% on average. Keep on Compounding my friend.
From my experiences in real life my friends don't like talking about money. I think it's because many of them have either not started saving for retirement or are behind on it, whereas they know I am far ahead of most people since they know I want to retire early. But I have also noticed that people online like to be voyeurs about money. They like to know how much people have.
I personally don't share that information with my readers. The most I have ever mentioned is that I have about 7 times my annual spending expenses saved up. So about 1/3 of the way to retirement. But on the other hand, I also know that I my expenses will change before I retire so that number is very flexible.
My recent post What Is Middle Class Income?
Agreed, its a very difficult topic, but we must be more open to talk about money. It helps us be more aware and accountable to do better with finances. If we keep things boxed in, we will not have information as to what worked or didn’t work regarding personal finances.