First Person: Investing for Retirement Is My Last Priority

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I regret funding my retirement accounts in my 30s because I've discovered there are so many other ways I could have used the money. A lot of financial experts insist a person is better off investing for retirement at an early age. That way they get the benefit of compound interest. In a perfect world, the interest I make would be added to the principal so the new interest earns me future interest. However, in reality my retirement accounts experienced losses, not gains. Also, I have discovered I will be hit with a 10 percent penalty by the IRS if I do withdrawal money from my retirement accounts early.

Now saving for retirement takes a backseat as I work on other savings goals.

Saving money for real estate

I rather have money in my 40s for my home since I can live in my house. I can't live in my retirement account. Now instead of putting $500 into retirement, I pay an extra $200 toward my mortgage. I put another $300 aside for other housing goals. If I had simply saved my money in a regular savings account, I'd have more than $100,000 in cash that I could use to make a real estate investment purchase. Instead, the value of my account went down with the stock market crashed. I could already be living in my current home with no mortgage if I had used my retirement savings each month to pay down my mortgage.

Building up an emergency fund

Even though I put aside money faithfully every month for my 401(k) and IRA, I can't access the money easily when I face emergencies. I regret investing for retirement before I had a fully-funded emergency account of at least $50,000. Any additional retirement savings will have to wait until I can accumulate liquid savings that can be used as a backup if I face a job loss or illness. I realized I made a mistake funding my retirement when my car broke down several months ago. I shouldn't have to use a credit card with a high interest rate after 10 years of saving.

Putting money aside for grandchildren

While my children are still in college, I know they may eventually get married and have children. Experts say more grandparents are saving money for their grandchildren's college because the costs are so high. I hope to be able to help my grandchildren with various expenses throughout their lives. I want to fund a grandchildren fund before I max out any retirement accounts. I may have grandchildren anytime in the next 20 years, but I won't reach full retirement age for another 25 or so years. For me, my children and grandchildren will be a higher priority.

I may live to be 100 years old, but I don't want to look back on my life with financial regrets because I followed someone else's financial plan. I have my own set of financial priorities. Having millions of dollars set aside for retirement isn't my top concern.

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More from this contributor:

My Smartest Financial Moves in my 30s

I'm Not Retiring to a College Town

The Spent Challenge Changed My Perspective on Saving
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