Leigh asks:
How [does] having careers, not jobs and not wanting to retire early, while still having healthy retirement savings all ties in together. How does that affect how much you put into retirement accounts vs other accounts each year, etc.?
TBH it really doesn’t. But I do think it accounts for some of the calm we wouldn’t be feeling if we weren’t in good financial shape right now.
Back tracking a bit though…
As Leigh notes, we’re working because we want to, not necessarily because we have to. We do like our high incomes, but a lot of why we work is because we’re trying to make the world a better place and in my case partly because of ambition. We have no plans on retiring ever, though we may change our minds in the future. Early retirement is definitely not in our plans.
Right now we’re maxing out all of our hassle-free retirement savings. So I’m putting away my mandatory match, my 403(b), my 457, and DH’s 401(k) (now with Fidelity and a much better deal! Asking for change works sometimes!). We are on an “over-saving” track for retirement at this point given our lack of desire to retire early and my relative job security (though who knows what will happen in 30-50 years!).
The main reason we’re putting this much away is to take advantage of the tax advantage and to make it more likely that schools will give our kids financial aid. We (as of this moment in our current situation) have plenty of money leftover to spend. But there’s not much to buy around here and we don’t really have the time or energy to go looking for things to buy. This is the first year that we’re starting to accumulate additional money after the targeted retirement/529/mortgage/sabbatical saving is done since before we bought a house. If the US were stable, we’d be putting it in lump 10K sums into the stock market (with a 25K donor advised fund that we may still do), but instead we did one lump and now it’s accumulating in savings waiting to see what happens with DH’s job and the political climate.
(As we’ve expressed probably ad nauseum to our regular readers– we have more than enough to live on in our current low cost of living area, but not enough to safely buy a house in Paradise, even assuming we move to Paradise for a high paying job for DH. But there’s always the chance we’ll want to move to Paradise with only one job and will be very happy that we “over-saved” even if we can’t afford to buy a house when we get there.)
I guess if we wanted to retire early we’d spend less. I would probably have to actually sit down and figure out what numbers we could retire at assuming different draw down rates and stock market returns etc. Depending on how early we wanted to retire, I’d have to figure out how to ladder accounts to draw down from (probably the easiest way is just to use the 457). And I’d probably be freaking out about money more because it would matter for our “freedom” date. But instead I’m expecting another 30-50 years of work so it’s easier to roll with uncertainty. There aren’t money worries on top of everything else.
If we get more tax-advantaged space to save for retirement (because of changes to tax laws), I guess we’ll use it, but at some point we’d have to think hard about when to stop maxing it out.
So right now we’re just going with the max defaults because where else are we going to put the money?
Grumpy nation: Do you have a career or a job? Are you aiming for early retirement, not retiring at all, or something in between? How does that decision impact your retirement savings decisions?
