What Are We Saving For, Anyways? Our Life Goals and Retirement Plans

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I’ve talked about this in bit and pieces under the Goals category, but I thought I should organize our life goals into one post. Hopefully, this will outline our priorities and shed some light on why we choose to do the things we do.

First, I’d like offer what I am afraid people think our life goals are:

Incorrect Goals

  1. Find the highest paying job possible. Work long hours, but tolerate it for the money.
  2. Live a very spartan lifestyle, with minimal luxuries and worrying about money constantly.
  3. At age 65, abruptly stop working so hard, finally relax and begin enjoying our life. Hopefully live long enough to enjoy this period.

In fact, that’s not what we want at all:

Actual Goal #1 – Finding A Job That Fits
If your going to spend almost 50% of every weekday doing something, shouldn’t you enjoy it? Sure, even great jobs have their challenges – bureaucracy, boring meetings, office politics, the occasional annoying co-worker. But finding a job where you don’t dread getting out of bed in the morning was a huge priority for me. It took a few different degree programs, a couple of resignations, some stressful interviews, and several rejections, but we are definitely making progress in finding work that is challenging, enjoyable, and reasonably well-compensated.

I would also add that having a simple lifestyle initially allowed us to take some risks in order to get where we are now.

Actual Goal #2 – Less Work, More Life
People talk about not wanting to look back and wish they spent more money and had more fun. I’m afraid of the latter, but don’t see how it relates to the former. I’m not afraid of that at all. I’m afraid of looking back and spending all of it working. I like working, but I also like a lot of other things as well.

What if you could get by with working only 20 hours a week? Right now we work full-time jobs, but from age 35-55 we hope to only work about half-time. This means we are trying to construct a lifestyle where we spend less than 50% of our take-home, including saving for retirement. That way, we can spend more time raising kids (possibly), running around with our dog, and whatever else we want. This is what we are saving for. We want freedom, not stuff.

Actual Goal #3 – Our “Retirement” Plans
When I envision our retirement, I don’t really have a date in mind, and I don’t see myself playing golf or sipping margaritas. It will be more of a gradual move towards even less work, and more freedom.

Ironically, in my “retirement”, I still see myself working here and there. I like the idea of trying out different jobs – barista, airline employee, real estate agent, craft maker – just to see what it’s like and maybe qualify for perks like free flights or group health insurance. Traveling about 2 months out of the year would be nice. Starting my own non-profit organization with a local focus. Building a Factory Five kit car with a donor car scavenged from the local junkyard.

So, those are the priorities we are working towards. Are yours similar? Or completely different?

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  1. It is ridiculous to even think about retirement then you are in 30.. Live today! Enjoy!!!

  2. Covax, it is ridiculous to not plan your future! Live for today and plan for tomorrow! That way when I am 40 I will be a millionaire and you will still be working some crappy job. And when you have to retire you will be relying on your kids to feed you, while I will be paying a nice young nurse with big who ha’s to take care of me. Well, my wife may not put up with that, but one of my retirement goals is to become a dirty old man.

  3. bitterkarma says

    How did you add that networth status bar? Good site btw! Can I add you to my blogroll?

  4. Given the miracle of compound interest, you are literally throwing away opportunities if you don’t start saving young. When you start saving at a young age, all you have to do is save a small percentage of your income, let it grow undisturbed, and meanwhile continue to enjoy your life. Then, later on, when you want more freedom, you have this great nest egg that helps give you options & flexibility.

    It’s not about depriving yourself unnecessarily or failing to enjoy your life – it’s about efficiency. It is incredibly more efficient to have time on your side!

    My husband and I discuss our goals pretty frequently, and they are quite similar to yours, Jonathan. Enjoy our what we do, constantly learn new things, do something to make the world better (even in a small way), save enough money to be able to go on a cool international trip once a year, save enough to know that we will have fun & freedom in the future, and generally live below our means so that we can focus on what is important to us, as opposed to letting stuff rule our lives (bigger house, bigger mortgage, more stuff to fill the house, more stuff to hold the stuff, more time spent organizing stuff and getting rid of stuff and fixing stuff and getting new stuff, etc.)

  5. For me, the goal of my savings is to be able to work on what I find interesting with little regard to the immediate financial compensation and to be able to take on challenges that require a larger financial means.

  6. @Savings Freak,

    I, too, want to be a dirty old man…and for that sole reason I will save!

  7. Good luck supporting an over 500K house working part time. It sounds like your goals are incompatible with your neighborhood.

  8. AC – He’s got at least 5 years to pay down his house a bit before going part-time. 500K isn’t really that bad, at 6% that would be about $3K a month, which is about $1800 more than I pay a month. All my expenses (including utilities, insurance, food gas) comes to about $3600 a month, so his could be $5400, which is the equivalent of $64800 in take home pay. I live in a high price/high tax area, so I would think our expenses would be similar.

    Yeah, two part-time jobs could potentially cover that. Two professional part-time salaries.

    Jonathan — I totally hear you about having freedom over things. That’s exactly what I want now. I really think you need to be brave to get what you want sometimes. Because you can run the numbers and see it work on paper, but be too frightened to take the plunge. You get used to having more money (even if you don’t spend it all) and getting that reduced paycheck may seem scary. That’s where I am right now.

  9. AC – you must be new around here. Take a look at Jonathan’s net worth history, and you will see he set a goal of $100,000 in non-retirement assets for a house downpayment a little over 2 years ago, and has met that goal. How hard is it going to be for him to handle paying off that mortgage?

  10. It truly is all about creating a good work/play mix. I want enough work and side projects to keep me busy and motivated, but I want the ability to transition into less strenuous type of work during old age. I don’t think I ever want to completely retire and not do anything. I would become one of those grumpy old grandpas if that ever happened.

  11. Clearing short term (income-eating) debt is essential. Once you can free yourself from high short-term interest payments, it’s amazing how your cash situation improves. Better cash flow better savings so you pay cash for your vacation, you put some away and you can’t help but start looking at the brighter future.

    Live now hand to mouth and always live hand to mouth.

  12. I am 31, I spend the last 10 years of my life traveling around the world between 6 and 8 weeks a year, with 10 weeks vacation a year(civil servant).

    I have seen my fair share of the world, sat on my ass doing nothing 1,5 years out of the last two years (per choice).

    Now I want to retire ASAP. Right now we have a combined income that is a little over 100k (before taxes) and total monthly expenses somewhere around 2.5k. 50 Sounds like a nice age to retire to me so I am building a financial future that will allow me to do that: A frugal lifestyle, smart investments and a low income when I retire.

    I want to move to South America when I retire and start teaching in a small village.

  13. @ Saving Freak – haha, you and my grandpa would have gotten along great.
    I am turning 21 in a few months and am already planning out my retirement. I’d like to be able to save enough to retire by 45 or 50 at the latest…I don’t think I’m not living for today, but I’m certainly thinking about tomorrow. It is irresponsible, if you ask me, to not plan on the future.

  14. Cavax, it is ridiculous to even think about working then you are in 30.. Live today! Enjoy!!! Work when you are 60.

  15. Well, I believe my statement was very straight.. I meant to say that retirement savings should be not so important then you are in 30… Of course it would be good to save at least 10% of your paycheck, but that is it. Life is so short…, enjoy it now. I’m not suggesting spend money on thing you don’t need…

    Saving freak, You won’t enjoy young nurse then you will be 60, you will be ill and deeply in depression, because only then you will realize that your life is ending and you didn’t get anything from it, even if you will have couple millions in your account..

  16. The problem is that when u are making good money…..u dont want to scale back at a young age as u said…..35 or 40 years old and work less hours.

    In 6 months, I made enough for the whole year….but i did not feel like taking even a week off from my consulting gig.

  17. Joseph Sangl says

    I will invest heavily and live life well – all at the same time. All because of lifestyle choices I have made.

    Life is good. Life doing what you are put on earth to do is good. Life doing what you are put on earth to do without regard to the income potential (because one has saved appropriately) is FLIPPIN’ AWESOME!

  18. I am all for your goal, Jonathan.

    So I take it you would support any sort of initiative that would decouple full time employment from eligibility for health insurance?

    Truthfully, health care costs are really the big unknown in my retirement budgeting…very scary. I am in my benefits open enrollment period, and compared the premiums now vs. 2004. Would you believe…in 4 years that they have almost doubled (the sum of both what I and my employer pay, which means if I had to do COBRA…I pay 12% of my premiums right now, just for reference)

    How do you plan on handling the health care budget, with its out of sight inflation on premiums and high volatility of what it actually covers?

  19. so glad you posted this! It’s a wonderful explanation and a wonderful philosophy. So many people just don’t seem to understand the desire to find the right balance between saving money and enjoying it in the moment!

  20. I’m with you…
    Work to live, not live to work. I also raised my son’s to find a career choice that is compatible with their passions. Like you said, we spend a majority of our waking life at work, we might as well enjoy it a bit…
    I have also harped at them since they his puberty, “If you start saving and investing now…you can retire at 40.” It must have piqued their interest, because for a 20 and 23 year old, they save their cash like crazy.
    Frugality is subjective. The main idea is to outflowing $’s

  21. Healthcare in semi-retirement or working half-time is definitely a concern for us. Attaching health insurance to jobs as a form of compensation is fine, but it should not be a requirement for affordable health insurance.

    For now, some employers offer health insurance as long as you work 51% of full-time. As long as one of us is covered, then we can probably afford the spousal addition.

  22. Nicolas Wilson says

    i work at citigroup at the age of 21, their call centers offer so much opportunity in a job market that is shaky for the young. Not to promote too much but they are completely diversified and give young people a chance to excel in life, with college reimbursement, and a 40+ k salary it is such a good job. take into account us young generations are the ones that service your credit cards a lot of times and we are just trying to make it in life on our own. Although it can be stressful at times, it’s still great overall, and just remember never let one problem overshadow anything, the point is to be balanced, and remember with every bad thing there should be 2 good things.

  23. I think you all are forgetting a very important part of the equation: education. I had the unfortunate circumstance of getting really sick when I was 19 and couldn’t finish school or even work. I had years living off of disability and ranking up debt just to survive. I am now 29 and in remission. I work 35 hours a week and take a class at night trying to finish my bachelor’s degree before I am 40. I have managed to pay off all of my bad debt and am saving 30% of my takehome.

    However, if I was able to get my degree when I was 23, my savings goals and current lifestyle (homework takes up all my free time) would be different. In my situation, my sacrifices now insure a comfortable life in the future. I am not going for lavish, just comfortable.

    Your lifestyle is directly proportional to your education level. Although sometimes considered a privilege – it should be a right. None of the goals you all are discussing would be possible otherwise. Many people aren’t so fortunate to be debating the age of retirement…

  24. I pretty much could have written the same post. Same life philosophy. Not sure how old you are. But we are 30, young kids, and had built up enough savings at 25 for my spouse to retire and for I to take decent amounts off of work.

    HEalthcare. This is very conducive to part-time work for the rest of your life, vs. trying to retire early, etc. We’ve never had health benefits with full-time jobs anyway. We will try to get a government or HMO job when we switch to part-time, to help. HEck, if we could, we could probably go PT today. 15% of my income goes to health insurance/medical expenses. I shudder at figuring out complete retirement when factoring medical expenses. The expense completely blindsided us when we have kids and the future looks pretty questionable (not exactly counting on medicare when I turn 65).

    I would laugh if anyone called us deprived. Sometimes I don’t know what world the middle class is living in. Since when did a designer purse = happiness. Tell me I am deprived in front of someone truly on the brink of poverty. We have a nice house, we don’t want for food or any necessities, and we have plenty to splurge on the luxuries important to us. A few material ones, but mostly not having to work so much.

    Oh, one last thing. It’s not so much living a spartan lifestyle/being overly miserly (not at all). But if you manage your money well out the gate, it’s just that much easier from there on out. A little effort in youth goes a long way… Much as the mistakes you make in your youth can haunt you for a long time. IT goes both ways. Anyway, it doesn’t get any easier when you have kids, mortgage, insurance out your ears, etc. You are on the right path. It might never be so easy to save so much again, for you, and you understand that. But it’s not so much either/or. It’s good planning so you can have your cake and eat it too. 😉

  25. Covax, retirement savings are the MOST important when you are 30 or younger. Compound interest does not favor those who wait till the end of their life and have to save everything just to retire. You are literally giving up free money by doing nothing now, if you maxed out a 401k for only two years and never contributed again and were now 20, make an average of 9% on it, that $30k will be about $1.5 million when you retire at 65. Only a fool would pass up an opportunity like that. You’re right Covax, life is short, so invest early!

  26. The lack of good and affordable health care in this country is certainly one of my main concerns. Picture this: without health care, if something bad and major happened to you and you find yourself in the hospital, your hard earned savings can be riped out instantly. Think about all the years of saving 10% year by year and suddenly it’s gone.
    Of course, having a spouse that can cover you at his/her job is great but how about the single folks????

  27. Hey Jonathan — Surprised to see you mention FF all of a sudden. Didn’t realize you had an interest in their products. I too am looking forward to acquiring a kit from them sometime in the future.

  28. What you say makes a lot of sense to me.

    Though I have less time than Covax, my plans are generally similar to yours. Or maybe I should say, my wishes.

    I have started to do something about it.

    Hopefully in a couple of years, I should be able to say, what JosephSangl commented above.

  29. Saving Freak–as a professional and well paid nurse I find your comments offensive and so would you if someone applied them to your wife or daughter. Even if you managed to accumulate enough money to pay a professional to take care of you, you wouldn’t find anyone willing to do it. There is a worldwide nursing shortage and none of us have to put up with that kind of behavior.

  30. I have no doubt that Jonathan could pay off his mortgage.

    The problem with 750K houses is their other costs as well: taxes (15K in high tax areas), maintenance, homeowners association, repair, utilities… It’s so much money it could easily pay for a simple rental or a very nice house in a cheaper part of the country. That much house is a money pit with or without a mortgage.

  31. skinnyangel says

    ive decided to look for another job! nice post!

  32. Put money into a pension fund if it is a requirement of the job you really want, but forget about it after that. Obviously the fund pays its ees and directors (!) and then you may or may not get it back. If you are 30 today, can you really predict what the world will be like in 2037? Best to invest in what is under your control which is your skill base and your ongoing ability to do business.

  33. “Hey Jonathan — Surprised to see you mention FF all of a sudden. Didn’t realize you had an interest in their products. I too am looking forward to acquiring a kit from them sometime in the future.”

    Mike S – Late reply, but which one? I’ve always wanted the Cobra but I’m drooling over their new GTM Supercar with the Corvette donor engine…

  34. Exactly the same. Although I gave up full time teaching when our daughter was born (I was also burnout after teaching primary school/ school IT specialist). I had the idea of turning my hobby (web design) into a small business – I have found myself a niche market. I only do about 4 websites a year, with updates and hosting it provides some xtra cash, keeps the mind active. I also do one or two days relief teaching at my daughters school (where my wife teaches full time), this gives me a break from my 3yr old son. Like you we live simply but do not go without. We planned the one income deal, we saved to have children, planned to move to a smaller town with cheaper houses with larger gardens that we could afford on one income, saved a huge deposit for the house and will have it paid off in 2 years time (6 yrs total). The only glitch at the moment my wife is still enjoying full time teaching and we are still reliant on her income. But the plan is when she is ready to cut her hours, we will be ready. Like you time is the most precious commodity.

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