I made the mistake this weekend of actually reading the paper's business section (yes, we still get the newspaper. I wouldn't be able to feel good about recycling it with only digital media now, would I?). As it's January, albeit the end, and we are approaching tax season (I'm even kinda sorta organized! Now if my company would just send me my W-2...) there is of course a plethora of articles on what you should be doing, you dumb hick who is destined to live in your children's basement, subsisting on a diet of mixed grill and salmon surprise cat food if you don't get financially healthy this minute!
Yes, savings rates have fallen off in this country. Yes, I'm betting a large number of my peers have little to no retirement savings. Yes, this is a massive implosion waiting to happen.
Articles telling you that if you aren't socking away the maximum allowable in your 401(k) ($17,500 a year I believe) then you are beyond screwed are not helpful. You get the virtual sigh and 'well, if you can't do that, then at LEAST get the company match' runner-up tone. This is of course assuming that your company offers any sort of a match. Listen, I've been with my company for over 16 years now and I do okay but there is not a chance in HELL I could afford to put away over 25% of my salary for retirement. Maybe someday but not with a mortgage and kids in daycare/aftercare. I mean, I guess I could if we gave up the little things like a house or eating.
You're putting away the maximum into your 401(k)? Great! But you aren't done yet. You are a fool if you aren't maxing out personal IRA contributions of $5000! YOU WILL DIE BROKE AND ALONE, YOU WORTHLESS CONSUMER WHORE.
Consults budget - Let's see...well, we have clothing and we don't have a house anymore so don't have to worry about heat or electricity. Layers are in this year after all.
Got your $22,500 squirreled away? Good work but you aren't done yet. Do you have six months of expenses saved up in an easily liquefied account? You know, what, it's so hard to find a job, better make it a year's worth. Hm, that's another $48,000 to put away which may be overkill seeing as we don't have mortgage, food, or heating bills anymore as you don't need them in a cardboard box. Oh! No electric, no need for TV so we can cancel that too. Still need cell phone service and car insurance so those have to stay...good news! We can drop the amount needed to save to $28,800. Well that's certainly a lot more doable. I'm feeling pretty good about this plan.
To hit these numbers, we would have to save $5900 a month. This...is a lot more than what we bring home. So thanks guys for pointing out in 12-pt type what miserable failures we are.
Now if you'll excuse me, I've got a wine rack to polish off. Might as well enjoy it while I still have a house to drink it in.