Saturday, July 28, 2012

Planning for your financial future and your mortality

I don't know why I keep having this thought I'll die young. Maybe because it is because I see young people in their 30's, 40's and 50's in the obituary section of the newspaper. I think something like 20% of people die before they are 65 years old. And by the time I retire the "retirement age" might be 70, and I'm guessing even less people make it that long. For some reason I am having trouble motivating myself to put more money into retirement. I have been putting in $200 a month since March, so if I continue that I will have put in $2,000 by the end of the year. But I still keep thinking I should max it out again this year and put in the full $5,000.

Another issue is there is a lot of stuff we need to save for in the short term future. The big one is both our vehicles are getting old and will need to be replaced within a few years. I don't want to tie up so much money into something I can't access for another 30-something years. I am still thinking about possibly doing a regular IRA instead of a Roth because then at least I'd get the tax break today, but I would still be putting something away towards the long term future. I wish I had a job that actually had a 401(k) because it would make it less painful to have it taken out of my checks automatically (and if there was matching that would be even better). I don't really even think about the fact I have been having an extra $50 a paycheck taken out for Federal and State taxes.

I know I should just assume that I will live well into my retirement years, but it's tough when I have to be frugal right now and not enjoy life as much because I have so much else to save for. I want to enjoy life now while I know I have it. That extra $5,000 that I would put into a Roth IRA could allow us to be more generous with other people, buy a few nicer things, and just enjoy life more.

My sister is getting married, so of course it would be nice if I could get her something nice and splurge on her bridal shower. It would be nice to take my friend who is unemployed out for lunch. I would be nice not to feel cheap going to a wedding and only giving them $40. It would be nice to get myself a pair of shoes that cost more than $20 so my feet won't hurt as much at the end of the day. It would be nice to get a massage once in a while. It would be nice to get a VIP ticket for my favorite band's concert. It would be nice to get a new computer since mine is crashing more often. It would be nice to take a short trip to a warm weather destination when it's -20 degrees in January. It would be nice to buy myself a few nice shirts instead of the cheap K-mart shirts that are so thin you can see my bra through them. It would be nice to get some more jeans that actually fit me. Or better yet,it would be nice to spend a little extra to get healthy foods and supplements so I can fit into my jeans again. Having an extra $5,000 would allow me to do more of these things. But reality is I can't really justify spending money on this stuff because we have so much to save for now. Even though investing in an IRA is a supposedly wise investment, I feel like I'd be better off saving short-term for a new car and allowing myself to loosen the reins a bit and enjoy my money. After all, why do I drag myself to work every day? For one reason and that's money. I wish I had such an abundance of money that I could max out my Roth IRA, not stress over taxes, pay cash for our replacement cars and new windows and siding for the house and still have money left over to do all that other stuff. But reality is I have to make choices. And right now the biggest choice is do I bother locking up more money in retirement accounts or just use the money now? I wish I knew how much life I had and how to save for it.

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