No Buts… Save for Retirement… NOW

by David Ning · 16 comments

I have credit card debts to pay off, student loans to service, bills to pay and a down payment to save up for. I can’t afford to save for retirement.

Sound familiar? With all these obligations, how the heck are we supposed to start saving for retirement, something that could be decades away?

In honor of the National Save for Retirement Week, let me tell you a secret that shouldn’t be a secret to begin with. When you can’t afford to save, you do it anyway.

Why Saving Anyway is Possible

Like you, I’ve contemplated on whether I should contribute to my retirement accounts this year. I just switched from having a full time job plus a side business to having just the income of the business. I also wanted to buy a home in the near future, and everyone could use a little more down payment.

Yet, I diligently added funds to my IRAs. I didn’t keep up because I think the stock market was heading north, nor was it because of some advanced saving technique. I contributed to my retirement account because the more I had access to, the more I would spend.

  • The more down payment I had, the more house I’d want.
  • The more I had in liquid assets, the more I would likely buy.
  • The more income coming in, the more I’d likely splurge.

We have been looking to buy a house for a few years now, and we were fortunate that prices have come down to more affordable levels. What we could buy a few years ago cost roughly half as much, but instead of feeling like we could save some money, all we did was look at nicer homes. It wasn’t because we somehow needed more space, but simply because we could afford a bigger house.

The More We Could, The More We Want

Money in our savings is like food on the plate, we will consume more if we can see it and get to it. The more you contribute to your retirement funds, the less you will waste because you can always make due. It’s almost like magic but the less you have, the less you need.

Stop making excuses and start contributing already. In fact, contribute today and do it now. You will be glad you read this when you retire.

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{ 16 comments… read them below or add one }

Financial Samurai October 21, 2009 at 6:52 am

No excuses towards getting to financial freedom for sure.

In my case, it’s getting to early financial freedom, so that’s even more of a reason to save like a banshee.

Life speed accelerates, NO REGRETS.

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marci October 21, 2009 at 7:39 am

Save early and save often :)

And remember, the bigger the house, the bigger the upkeep, maintenance, and utilities, and probably taxes.

Think small :)

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MoneyNing October 22, 2009 at 7:55 am

Timely advice for me, especially since I’ve been contemplating about my first home purchase. :) Do I really need a nice and big house?

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Melanie October 21, 2009 at 9:09 am

I’ve been telling everyone to invest for retirement all year. There are so many people thanking me and others who wished they followed that advice. Many of us are almost back to even while those who took money off the table are still 30-40% off despite the bull market. Keep investing for your retirement and you will do okay.

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MoneyNing October 22, 2009 at 7:57 am

You definitely should keep investing, but I wouldn’t think too much about the whole timing thing. Markets go up and down, and it’s a full time job just to keep up.

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Sally October 21, 2009 at 12:30 pm

Retirement is so far away and it’s always hard to give it the attention that it deserves. Maybe we should have National Save for Retirement Month instead of Week to give it even more emphasis.

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Dr Dean October 21, 2009 at 4:45 pm

Great Post. An article in today’s WSJ (www.wsj.com) confirms to me the reason for automatic funding of your retirement account.

With the market advance this year, Karen Blumenthal reports those that deposit monthly or bi-monthly out of their paycheck, and into their 401-k’s have taken advantage of dollar cost averaging. Their losses, when viewed over the past two-three years are not nearly as severe as those that froze and quit depositing into their accounts due to fear.

As long as you have a long term investment horizon, and alter your balance of your investments as you near retirement, stay the course.

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Greg October 21, 2009 at 4:56 pm

It is said that nature abhors a vacuum. Buying a bigger house will prove this scientific fact. Another lesson learned the hard way… the more house you buy the more space you have that must be filled. I share because I learned….

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MoneyNing October 22, 2009 at 7:59 am

I keep saying that we will buy so much junk if we get a big house, not to mention all the extra cleaning that we will have to do.

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Financial Samurai October 23, 2009 at 10:10 am

David – You will most certainly buy more junk to fill up the house. Our house is pretty large for SF standards (having a house itself in SF is rare), and it’s just two of us and the place is cluttered like crazy.

Keep it simple.

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kenyantykoon October 21, 2009 at 11:55 pm

i haven’t actively started saving cash for my retirement. i am planning to start very soon. right now i am just increasing my financial and business acumen with the future always at the back of my mind

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thomas October 24, 2009 at 8:37 pm

I sometimes question the purpose for such generic articles that we all have seen 1000 times before.
1. The US dollar is loosing value, so having cash savings and lots of it may not be a good idea.
2. Before focusing on retirement, are all your other financial affairs in order?

On the positive end, retirement savings can be handle the same as normal savings which is through automated transfers where you don’t touch or see me money and it just sits in a separate account.

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MoneyNing October 25, 2009 at 8:36 am

It’s only natural to do so when you’ve read a similar idea already, but until everyone has it drilled in their head that savings rate is the most important factor to a good retirement (not killer investment ideas, not some hot stock), I will continue to talk about it, even if some feel it’s repetitive.

Also note that you can always invest in investments that will lessen the blow of a falling dollar. Saving for retirement is about putting money towards it, not necessarily in specific investments (that would be a topic for another article).

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Davd July 19, 2012 at 6:05 am

Live the life that you can afford!

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R. January 27, 2013 at 11:08 am

Be careful if you are a veteran. Money in an IRA, Bank account, 401K, value of 2nd home, Business assets, Income of you and spouse and children, Wifes assets, stocks and bonds, childrens assets if living with you, collectibles value (coins, stamps, art, antiques, etc) all add up to be your assets and will be used against you to make you pay for your veterans care that you earned serving for your country. Only exception is major disability status. They don’t want to hear about minor long term disabilities. Being poor or homeless seems to be a blessing when it comes to the VA for service.

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lana April 25, 2013 at 8:21 pm

We’re saving, we just paid off our home. Our family’s four cars are paid for. We are doing a max 401K and now we are saving as much cash as possible. I hope to start doing c.d.s in a ladder fashion. We have 18 years to retirement. Hopefully, we will be ready.

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