Financial advice on retirement is everywhere these days. You see it on TV commercials, you hear about it on the news and read about it all over the internet. It’s all “save as much as you possibly can,” and “invest smarter and harder”. But, you have to remember that retirement isn’t a race. In fact, there are many milestones that come before it. While saving for the future is incredibly important, here are 4 times it makes sense to scale back on retirement savings.
1. Starting a Family
For most people, raising their family is an extremely high priority – but, let’s be honest, as rewarding and joyful as raising children are, it’s pretty expensive.
Often, expenses like childcare, come at a time when you are still fairly early in your career. Or, if one parent stays at home to look after the children, your family income can be split in half. Starting a family is financially challenging, and sacrifices need to be made.
Of course, you can cut back on spendings like eating out, shopping and vacations. But, when there just isn’t enough to go around it’s OK to scale back on retirement savings. The end goal isn’t it retire, but to create a life that you and your family enjoy.
2. Pursuing Meaningful Work
If you’re working for money, but don’t enjoy your job, you’ve probably considered changing it up to do something more meaningful and enjoyable for yourself. Yes, this might involve taking an initial pay cut, but if the work is fulfilling it’s an incredibly enjoyable way to spend your life.
It’s up you to decide if you’d rather work a mediocre job that pays well right now, or going back to school, changing fields, or starting a business and taking a temporary pay cut. Just because your current job allows you to make generous retirement contributions, it’s not smart to stay in a job you hate. There are many situations where taking a step back is actually the correct thing to do.
3. You Can Afford to Save Less
Sometimes, when saving for retirement you can come out ahead of where you really need to be. This is great but can be hard to change as we are so conditioned to save every spare dollar we have. In some respects, saving less money isn’t always the right move as it’s a good idea to prepare yourself for whatever might come your way.
However, what would you do with that extra cash if it wasn’t going towards retirement savings? Would you follow your dreams of traveling more? Working less? Or spend more time with your friends and family? Continuing on the path you are on might allow you to retire sooner but scaling back will let you enjoy life now.
4. Planning for a Lifetime, Not a Retirement
We’re not suggesting that you should neglect to save for retirement. No matter what you want to achieve, there will come a day when you are either unable or no longer want to work for money. It’s important to prepare for that day – as well as what comes after it.
Retirement isn’t the only goal, you’ve got plenty of life before and after it. Your biggest goal should be filling those years with as much happiness as possible. That might mean saving a little less for retirement for a while, and if you do it right, your future self will thank you for it.