Os Money|Life
In my last blog, I talked about a different type of retirement, but most Americans, if judged by 401K, has a median amount of $18,000 in their account. Now, I do not put a lot of stock in this number if Americans with a decent wage have realized that the 401K is not the retirement vehicle it was cracked up to be. If you have figured this out I applaud you! However, if $18,000 is what you have amassed in a retirement plan outside of 401K after 10-40 years of hard work, God Bless You! I mean that. I know that often we do not get paid enough at the jobs we are at to barely make the ends meet, but really I also cannot make that the excuse if that is amount you have saved. Even if you already know you have no plans to retire, without a cushion, one medical event could put you in the poorhouse. I am not here to berate you if this is your situation, but you can change that and it starts by reassessing where you are now. I had three things I used for my assessment and that is
- Do I have/make enough money to save 10% at least each month
- Do I have/make enough money to pay my bills each month
- Do I have/make enough money to have some fun
If I can check yes to all 3 of these, then I’m good in life. However, if it’s two of the 3 or just one of the 3, that can last for a little while, but it will be time to make a change because in the long run of life that imbalance will eventually show in my life, so the aim is to check off all the boxes. Maybe you make enough money and are just a overspending, in which case, you will need to introduce restraint or more money. If you do not make enough money, you may need to start looking for a new way to legitimately make more. That may be new job, some investment opportunity, or new skill that can make you more money. During your assessment, you can get a tool like Mint to help you track all the money you spend and aggregate all your finances and from there determine how much more money you need to make or less money you need to spend to check those boxes. I read a book once called “The Richest Man in Babylon” which gave some good pointers on wealth building that is still useful in today’s time. Have a look if this is available in your nearest library.
The point of all this is to say, we all have challenges to make our dollars stretch for saving/retiring, but we cannot settle for $18,000 as all we show for years of working. If we find ourselves in that predicament, reassess and make appropriate change to get on track using my 3 measurements as a guide.
Os
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