Comments on: It’s OK Not To Be Saving For Retirement In Your 20s and 30s

By: Carnival of Personal Finance #232 Thanksgiving Survival Edition

Carnival of Personal Finance #232 Thanksgiving Survival Edition — Mon, 23 Nov 2009 13:04:05 +0000

[...] from Four Pillars presents It’s ok not to be saving for retirement in your 20s and 30s. A reminder from Mike that life happens and not saving for retirement all the time is not the end [...]

By: The Financial Blogger » Blog Archive » Financial Ramblings

The Financial Blogger » Blog Archive » Financial Ramblings — Sat, 21 Nov 2009 20:26:58 +0000

[...] It’s okay to not be saving for your retirement in your 20’s and 30’s at Four Pillars. [...]

By: Canadian Dream: Free at 45 » Blog Archives » Winner and Wander Reading

Canadian Dream: Free at 45 » Blog Archives » Winner and Wander Reading — Fri, 20 Nov 2009 12:58:42 +0000

[...] Cheap points out it’s ok to NOT be saving for your retirement in your 20s and 30s. 20s I can agree with, focus on debt and it still can help out your retirement plan. The 30s is [...]

By: Shevy

Shevy — Thu, 19 Nov 2009 03:55:40 +0000

Yes, saving money is a valuable habit to get into. I think the couple profiled in MoneySense are behaving responsibly for the most part but I would suggest that they open at least one RRSP and put $10/wk into it. No, $520/year isn’t a fortune but it’s something and it’s forming that habit of saving for retirement. Once they feel more comfortable financially or get any kind of raise, they can start to increase the RRSP deposits.

By: Ken

Ken — Wed, 18 Nov 2009 18:14:14 +0000

I do think savings as a habit is valuable. If you’re building a business it may be OK to limit the amount saved but don’t throw the baby out with the bath water. Besides, even businesses go through hard times…ie rainy day fund. Nice post!

By: Credit Card Chaser

Credit Card Chaser — Wed, 18 Nov 2009 02:05:55 +0000

Haha I am definitely going to be using that Buffet quote! BTW I definitely agree with pretty much everything you said in the post especially from the perspective of your friend the business owner.

By: Nolan Matthias

Nolan Matthias — Tue, 17 Nov 2009 21:57:49 +0000

Good article, I especially agree with the concept of living life to the fullest, in fact I recently wrote an article on this myself, the gist was that it is not about living a lifestyle you can’t afford, it is about finding a way to afford the lifestyle you desire.

When it comes to telling someone that it is okay not to save however, it is important not to overlook one key factor, and that is habits. Habits are the foundation of how people save, invest, pay off debt, and spend. Forming a habit around saving monthly, and doing this early is as important if not more important than the compounding effect of interest. Those who learn to save before all else early, maintain this habit throughout their lives, those who get into the habit of paying down debt quickly often end up looking for more debt to pay down because that is what they are accustomed to.

Forming the right habits for when one is debt free, at least in my mind will make or break an individual. Just because one pays down debt now, may not mean they will be inclined to save money in the future.

Saving early also has one other key benefit. If you have a large sum of money saved and you lose your job, have unexpected expenses, or cannot work, a savings can literally, well, save you. The same cannot be said for having an almost paid off mortgage that still has a payment to be made every month.

Kind regards,

Nolan Matthias

By: Four Pillars

Four Pillars — Tue, 17 Nov 2009 21:04:58 +0000

Sampson – Great suggestion about “follow up” articles. That would be interesting.

I don’t think Cheap is saying that young people should “live it up” and then learn to start saving later – but rather that if they are putting extra money into mortgage pre-payments or building up a business or career (ie going back to school) then don’t worry about the lack of retirement savings.

By: Sampson

Sampson — Tue, 17 Nov 2009 20:10:58 +0000

I’m another who loves reading those profiles, however, I think they should have follow ups to see how the people have done a few years down the road.

While I agree that saving later can be done, I personally don’t think its a good idea. My wife and I have always been big-time savers, and are having to ‘learn’ how to spend out money. This is much easier than the reverse. If you’re used to living a lavish lifestyle and are suddenly ‘forced’ to save for retirement, I’m certain this is much more difficult than saving early and maintaining and even increasing it as your salary increases.

By: Financial Samurai

Financial Samurai — Tue, 17 Nov 2009 18:38:58 +0000

Good topic! I’ve told a lot of my younger acquiantances who are earning below $100,000 that the value of their $ is worth MUCH more now than saving it, so spend it freely!

What’s the point of driving a Porsche 911 at 65, when you can look cool driving at 28?

Seriously though, this makes a lot of sense. But, I started saving 50%+ of my annual salary since the age of 24 b/c I wanted to retire by 45. That’s just me. To each their own.