Preparing for the Future Means More Than Saving for Retirement

At the moment, many of us don’t seem to be feeling too good about finances. Not only are we wary of the overall economy, but the pressure it’s exerting on the markets is making us apprehensive about investing too. So this makes preparing for the future far more difficult.

We know that retirement planning is extremely important, but perhaps equally important is to plan with your goals in mind, leaving room for adjustments as you, your ideals and circumstances change over time. 

And this is where I am finding myself in. This is in a way a summary of my thoughts post-pandemic (well it is still out there?), and also post-natural disaster (Typhoon Odette). 

But before you invest, consider this.. 

Having an emergency fund of at least 3-6 months worth of expenses is definitely no longer applicable. Well this is in the context of post-lockdown (of 2 years+) world. While factoring in inflation, paying off high-interest debt, and consistently investing for retirement. Once the emergency fund box are checked, sure, invest whatever amount is left over as you please. 

Revised retirement planning tips they don’t tell you 

Goals first, money second: Ultimately, it’s the goals behind them that determine almost everything about the details of your retirement money. Having a general idea of what you want your post-working life to be like will drive how you plan, invest, and spend in the present, and allow you to mold your future accordingly. 

Simply wait: Periods of rising rates and quantitative tightening have not been kind to investors historically, and many economists are calling for an ongoing contraction for the foreseeable future. This means we could be waiting a while for prosperous conditions to return, and it might be best not to fight the Fed with active investing right now. 

Focus on income: It is far more easier to find ways to increase or at least double one's income than waiting for your investments to double. Now this requires some strategy in terms of hopping jobs as well as building a skillset that is highly valued and in-demand increases your chances to double your income.

Clean Up Your (Online) Spending: This is for both online and offline expenses. From hidden subscriptions to shopping online, you're probably spending way more than you realize. Without physical bills or regular reminders, it's easy to forget about what we're spending and how. Try to eliminate if not reduce/re-negotiate to lower the fees of these expenses (Car insurance, loans/debt, subscription plans or the like).

Keep an open mind: It’s easy to think you know what you want in retirement, only to get confronted by a totally different reality once it arrives. This is why keeping an open mind and experimenting is important, and know going into it that things will change. 

Leave room for error too: Because of the inevitable reality of the unexpected, we have to leave room for error in our planning too. Or at least some form of flexibility. This means expecting the unexpected both financially and mentally—saving a little more than needed, and saving time for mental adjusting too. From an investment stand-point, you can also never predict the market.

So for me, this quote captures what preparing for the future means more than saving for retirement means.

“Wealth consists not in having great possessions, but in having few wants.” ―Epictetus

If you like this post, please do share it on social media like Facebook, Twitter or any other site that you like (of course with a credit link back to this blog post).

Also, don’t forget to follow me on FacebookSpotify or (for the Podcast), and Instagram for more updates and random stuff about me and this blog.

Preparing for the Future Means More Than Saving for Retirement Preparing for the Future Means More Than Saving for Retirement Reviewed by Vernon Joseph Go on Friday, September 30, 2022 Rating: 5

No comments