Retirement Is Not An Age

Let’s talk retirement. Reaching a certain age does not financially qualify you for retirement.  To retire you need to reach a dollar amount. 

Here’s one measure to consider:
Your annual expenses x 25 = Your Retirement Number.

For example, if you spend $50,000 per year you can retire when you have $50,000 x 25 = $1,250,000 saved up. Being 65 doesn’t mean you get to retire.  If you don’t have any money, you have to keep working. On the contrary, if you’re 40 and you’ve saved up 25 times your annual expenses, then you may never need to work again.So instead of planning to work until a magical age, think about making a plan to lower expenses, invest aggressively and retire young!

If your car payment is more than your retirement contribution you may want to take a deeper look at this situation. If depreciation didn’t keep you from buying a car, downturns shouldn’t keep you from investing and investing in your 401(k). Don’t talk to me about potentially losing money in the stock market when you finance a $30,000 car that’ll be worth $6,000 when you trade it in 6 years later.

The truth is even a car that “holds it’s value well” is worth significantly less that what you paid for it by the time you paid it off. This happens at the same time you’re paying interest which makes the whole situation a double negative. (Paying $35,000 for a $30,000 car that’s now worth $6,000). I get it you need a car but think about it.

On the other side, the annual rate at which the money you put in the market or your retirement would have grown during the last roughly 50 years sits about 10%. 
I’m not saying past performance indicates future performance, but if i was going to take a risk with my money, I’d definitely pick index funds/401(k) investing over something that depreciates as quickly as a car does.

Overall, don’t focus on how much money you “could have made” had you started saving and investing 10 or 20 years ago. Focus on the time you have AHEAD of you and the incredible ways in which you can completely SHIFT your life and finances for the better if you start TODAY.