"We've Got Time!" Said Chicken Little to the Sky, Daringly.

AKA: The Dangers of Deferring Retirement Planning

(suspense) Dun, DUN, DUHHHH!

The Mr. and I started meeting with financial planners when I was 26. We interviewed a couple of them to ensure we got a good fit, as financial advisers are like other professional services where personality and relationship matter. Both of the people (from two different firms) we met with though had the same two reactions to us and our financial breakdown.

1) You guys are much younger than my usual clientele.

2) If nothing in your savings, 401k, stocks, bonds, etc. changes, you will only reach a fraction of your retirement goal by the time you want to retire.

Here are the facts about us:
I am 27, the Mr. is soon-to-be 29 (I like to round up to 30 to irk him).
We BOTH have 401ks that we max out and then some.
We have no credit card or student loan debt.
We have savings, a low-rate mortgage and a low-rate car payment.
I have some educational bonds that are vested.
The Mr. has done moderately well conservatively playing in the stock market.
The Mr. may have some inheritance, but that is uncertain at this time.
We are interested in retiring early with enough money to enjoy our golden years*.

So. I thought to myself, "Self, you're set! Look at how well you've planned and how you allocate your debts and savings! Pat your self on the back and go have a BLT**."

I and think the Mr. and I aren't far from the norm in our planning.

Many youngun's have some retirement planning in place. Some have more. Some have none. But most of us think, in my experience, that we've got time.

Here's what "time" and our pre-adviser planning would get us, according to CNN's retirement calculator:

(some spaces have been whited out for our privacy)

Blah blah blah, basically the bottom line is this:

We will only have a 55% chance of being able to retire when and how we want if we don't change our plan.

And that means taking action now. This is how we changed our tune. "Finance" is the category to notice.

The more accurate, robust breakdowns of our financial trajectory done by the professionals showed that most of our investments only made big bucks in the final, compounding years before retirement.

Two words. Compound interest.

And think that 6-figure number is atypical for retirment? This basic calculator says that a modest retirement at a later age even costs $1.5 million, accounting for inflation! Pensions are going the way of the Atari*** and don't count on Social Security, friends!

As my vibrant 92 year old Grammy says: "You always need more than you think you do."


*Travel and buy lattes.
**Had a BLT in Minnesota that was on pita bread... I recommend it!
*** Pac-man!

Happy Retirement!

Two of my most favorite people retire today.

Love you Mom and Dad!

You'll be officially celebrated when we get together in June!

Tipsy Tuesday: The Quarterly Financial Roundup and Retirement

(The last time I did this was for October, so therefore, 'tis quarterly when measured on my own, made-up cycle.)

**Update at the bottom**

Get excited! I've got charts for you:

The first chart shows how conservative we are with our spending. When I say "not spending" I don't always mean "saving" because sometimes that extra money sits in our checking account (instead of our higher-interest savings account) until we move it over to savings. Which we/Mr. S recently did. 

Boom... and...

The second chart shows the breakdown of our expenses. There is some wiggle room in there as we did just pay for flights to Nicaragua in January (the dark blue slice) and we pay for a family plan for cell phones when we get reimbursed for the cost of some of the users (the lighter blue slice) and that reimbursement isn't reflected here.

BAM! 

These charts reflect January's spending, saving and where all the money went. It's it glorious!?

When we were in Nica with our friends B.Lill and her husband (collectively they are called BaM), B and I started discussing investments, particularly retirement. (If retirement savings isn't considered an "investment", please leave a comment to correct me. I love learning and am working on humbly accepting fault!)

Anyway, BaM saves aggressively for retirement. M's parent's retired early after selling their dental practice and are still living-da-vida-loca as young retirees. BaM want to do the same and are busting their butts to make it happen. 

Their primary goal is retirement savings (as they already own their forever-home, a car and probably have a nice cushion set up if/when kids come along in the next few years). 

Hearing about Social Security in the news and learning how flawed of a plan it is for both our parents and our own golden years makes me scared for retirement. Not for me necessarily, because I believe Mr. S and I are aware of the issue there and realize that we need to start planning now if we want to take it easy in our older years, but for our generation.

Are you scared about retirement? Do you know where your security is going to come from when you're older? Are you squirreling away ANYTHING now? Yes, even in your 20's. 

My advice to you: start saving for your retirement. Max out your 401k. Is a Roth IRA better for you? More tips for planning for retirement while in your 20's. 

Also, keep a handle on your finances. Check them regularly (I have made charts quarterly, but I check Mint.com regularly). Get a handle on overspending and reward yourself when you've done well.

What tools do you use to plan for retirement? To save?

Drink Pairing: fresh orange, pear, parsley and strawberry juice. We juiced this morning (as we committed to  do everyday this week for breakfast) and it was our best combo yet. Parsley may be an odd choice, but it has vitamin K!


**Update**
I had a comment from what I assume is my college roommate, RM. Not sure what happened to the comment, but she said she uses Mint.com and that her transactions are appearing twice. Does this help? If not, should you alert Mint to your problem? I know Mint is working on fixing things overtime and opening tickets with them might help you and others get solutions faster. :) So glad you use Mint!!