When it comes to my retirement accounts, I've made a conscious decision to be a slacker in my 40s. It's not that I won't need money when I'm retired. I just don't think I'll need as much money as most of the financial experts say I'll need. Also, I am preparing for retirement with the financial decisions I'm making right now such as paying off my mortgage. I don't have to invest in a 401(k) or Roth IRA in order to be retirement ready.
According to a recent article in Time, most financial planners recommend people get together enough retirement money to replace 70 percent or more of their pre-retirement income. My goal should be to maintain my current lifestyle, experts say.
Paying off my house
Instead of socking more money away into my 401(k) account, I'd rather just pay off my house. That way, I won't have to make a mortgage payment when I'm retired. I'll simply have to have enough money to pay for my property taxes, home owner's association fees and home owner's insurance. I'm tired of so-called experts telling me to invest my money in the stock market instead of paying off my house. I just want to keep things simple. My slacker side likes to keep things simple so I don't have to worry about whether or not I have enough dividends every month to cover my rent or mortgage.
Living in the now
I could invest more money in a Roth IRA or a 401(k), but I would like to be able to access my money in the near future if I so desire. I am not going to spend the next 20 years of my life waiting to live. If I put my money in some retirement accounts, I'll be smacked with an early withdrawal penalty if I access the money early. At age 40, I'm not willing to put my life on hold for another 25 to 30 years as I wait for my hair to go gray. If my investments in my regular brokerage account do well, I'll still have plenty of money for retirement as well as the years leading up to retirement.
Being confident about my future
At this point in my life, I feel as though I've already put so much effort into saving for retirement. According to a retirement confidence survey cited in the Time article, only 14 percent of people are very confident they will be comfortable in retirement. Sixty percent of the workers surveyed had less than $25,000 saved. I am confident I'll have the $1 million I need for retirement by the time I'm old enough to claim a Social Security check.
Finding my retirement number
I don't plan to spend a lot of money in retirement because I have fairly inexpensive hobbies and interests. I know I'll have to keep up with inflation, but that would be an issue whether I'm retired or not. I picked $1 million as my retirement number based on the fact that I won't have a mortgage. If my money doesn't grow to $1 million by the time I retire, I'll have to learn to live on less. It shouldn't be too hard to do, since I've had lots of practice.
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