Everyday Yahoo Finance has a fresh article that pertains to retirement planning, retirement investing or other relevant topic. Yesterday’s article was particularly interesting and might tie in with past concepts covered here.
The basic premise of yesterday’s article, in the context of retirement planning, was that you will be a much different person when you retire. Your interests, health, risk tolerances and whatever else will be much different twenty years from now. Here is a great quote from the article:
Richard Posner, a judge and law professor, has written that aging changes us so dramatically that we should imagine different people “time-sharing” our bodies. And the earlier tenants often leave messes for the next one to clean up.
One bit of philosophy from our friend Bill that pertains to the mess to be cleaned up; Bill says you can figure it out now or you can figure it out later but the sooner you figure it out the happier you’ll be.
How many times have you plugged your numbers into a retirement calculator and it tells you that you’ll have a gajillion dollars left over? Then you go to another one and you’re way short? Not being a financial planner (portfolio manager is a much different job) I come at these things from my own biases and other personal distortions.
My take on not knowing what you’ll be like in the future is simply to just save as much as you can, hopefully as much as you can is more than you think you’ll need, while we’re at it I’ll throw in live below your means. The article notes that someone in their 40s or 50s may want to work as long as they can but then come their mid-60s they may not view working the same way in terms of choice and of course there could be health issues the prevent someone from continuing to work.
The reason to save as much as you can is maybe better thought of as you never know what will happen in the future. With due respect to the article I’m sure there are plenty of people who make a plan at 30 and their life goes as planned, plenty of other people’s lives take all sorts of turns (good and bad) and as the article notes we can’t know where we fit in and we can’t know what will happen.
Whatever life throws at us it is unlikely that more money will make things worse. Save as much as you can.