First Person: I Saved Early for Retirement and Then Stopped

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I started saving for retirement in my 20s and now have stopped in my 40s. It wasn't a financial strategy or retirement plan. It just happened. I'm sure what I'm doing is not what financial experts mean when they say it's never too early to save for retirement. They probably expect early savers to continue to put money aside or even take advantage of catch-up contributions in their 50s. For some, the goal is to save up as much money as possible for retirement. For others, the goal is to have enough money to retire early. I have other financial priorities at this stage in my life. However, saving early for retirement has given me to ability to invest a big chunk of change or about $100,000. According to a recent article by USA Today, people should start saving as soon as they have earned income. It's not necessary to save up quite as much if a person plans to delay taking Social Security benefits until age 70.

Being extra cautious

Because I'm not contributing any new money to my retirement accounts, I am extra cautious about how I invest my money. I stick with exchange-traded funds that are diversified with small, medium and large companies. My brokerage firm prevents me from making any risky trades by not letting me buy more than a certain number of shares of speculative stocks or higher-risk funds. I only allow myself to use 5 percent of my retirement money on higher-risk funds anyway.

Avoiding another bubble

Another reason I stopped saving for retirement in my 40s is because we are in the middle of a bull market. According to a recent Market Watch article, we may have entered a stock market bubble because of the Fed's manipulation of interest rates. I don't want to put new money into the stock market when I may be buying at all-time highs in some cases. I overpaid for my home by buying during the housing bubble, and I won't do the same with my retirement accounts.

Building a retirement nest

Instead of putting money into my retirement nest egg, I'm working on building my retirement nest. I am not literally building a retirement home, but am paying down my mortgage with a 15-year-rate fixed mortgage. At this time, I should have my home paid off in 14 years even if I only pay the minimum. That means I'll be free of my mortgage just before I'm age 55 or eligible to live in those age-restricted communities that I don't like.

I'd rather have money in an emergency fund than a retirement account simply because I need the peace of mind. I don't want to have to pay penalties or early withdrawal fees for accessing my money before a certain age. If I owned my home outright and had an emergency fund of at least $50,000, I'd go back to saving for retirement. With an emergency fund at about zero and $100,000 owed on my mortgage, I have a long way to go before I'll resume my retirement contributions.

More from this contributor:

Planning for an Extreme Early Retirement

Tapping Retirement Funds for College

Overcoming Retirement Savings Burnout

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