Monday, February 28, 2011

Younger and faster

The most conventional retirement advice is to start early and save slowly. Articles like this one show you how you can become a millionaire with as little as $100 a month if you start when you're 25 and save for 40 years. Great, except who wants to wait 40 years?

Not to be morbid, but the so called "Golden Years" are the time we're most likely to experience failing physical health, death of a spouse and friends in our age group, and eventually....well, you know the rest. Happy Monday.

I'm of the view that as a society we need to start saving younger. But it's tough. Look at the cost of getting an education. If higher education were free - like it is in the Netherlands, for example - we wouldn't have students graduating $20,000 in the hole. If you were working part-time during school, and tuition was free, you could even save money while completing your studies.

Setting the retirement bar at 65 is such a dismally low target. Why do you think it's been set there? I hate to sound cynical, but it probably has something to do with declining productivity after a certain age. Your value as a worker bee starts to decrease. My point is, retiring at 65 isn’t designed to be in our best interests. It's in the best interests of corporations and shareholders.

If you could save enough money for retirement in 10 or even five years, would you? Would it be worth the discomfort? Or does the saying, "slow and steady wins the race" apply?

The attitude I commonly encounter among people my age is "I want to enjoy nice things while I'm young." But are you really enjoying them when you're standing on the edge of the precipice of debt? Wouldn't it be better to enjoy these things a little later in life - when you're grounded and have your head on straight, but you still have all your teeth?

1 comment:

  1. I would. In fact, we have started making the first step of trying to understand how the retirement fund (called super here) works and we are hoping to start contributing to it by next year.

    That said, there are certain nice things in life that we would like to do while we are young and so, have set aside a budget for it.