By Craig Erwin, Ph.D. 12-21-20
Can you save too much for retirement? It seems as if every other day some journalist writes an article about the danger of saving too much for retirement. These articles always give me a chuckle. In my opinion, it’s impossible to save too much for retirement. There are too many unknowns, too many assumptions and calculations that must be made.
Consider a woman who develops and executes the perfect retirement plan with professional help. Everything might go perfectly for years while she saves money religiously as she planned. Then, suddenly she could lose her job or suffers a big financial loss. All of a sudden, all of her assumptions and calculations would be thrown out the window. She might be forced to retire early. This would mean that she wouldn’t be able to save as much money as planned and would have to stretch her money farther over more retirement years.
Life is too full of uncertainty for us to accurately determine how much to save for retirement and to stick with our plans come hell or high water. There are far too many things that can go wrong. Divorce, serious medical problems, pregnancies, layoffs, downsizing, economic downturns – all of these and more can throw a wrench into your best-laid plans.
The vast majority of Americans are at risk of saving far too little money for retirement. Relatively few are in danger of saving too much. The statistics are staggering. Read this post for statistics and more information. FOR MOST AMERICANS SAVING MONEY IS HARD | WOMEN RETIRE DOT COM https://womenretire.com/for-most-americans-saving-money-is-hard/
What is the danger of saving too much money? Has anyone every complained about having too much money? If you saved too much money, you would be able to retire early and spend money freely on travel, clothes, entertainment, and luxuries. I am not worried about saving too much money – I think it’s a problem I could learn to live with.
In the worst case, if you save way more money than you need, you can always give it to charity. Would that be such a huge problem?
Click on the following link for a discussion on different approaches to saving for retirement.
Click on this link to learn about the best way for most people to save and invest for retirement.
For a discussion of how difficult it is to save money for retirement, click on the following. SAVING FOR RETIREMENT IS HARD! | WOMEN RETIRE DOT COM