MONEY HACKS: Balancing Retirement Savings and Enjoying Life Today

Striking the perfect balance between saving for retirement and enjoying your life now can feel like walking a tightrope. Many of us are caught in the dilemma of whether to prioritize our future financial security or to seize the day and indulge in the present. It's a challenge that involves making choices that cater to both our immediate desires and long-term aspirations.

In this Money Hacks Episode, Alex tackles this pressing issue head-on, drawing from his extensive experience in thousands of coaching sessions and workshops. He shares his insights into how to navigate this balancing act.

Any money questions you’d like answered? Our Money Hacks series is created from conversations we have with employees, investors, savers, and all people planning for their financial futures. What topics are on your mind for our next episode?

Video Transcript:

Hey, this is Alex with Money Hacks. It's episode number 116, and today's topic is saving for retirement versus enjoying my life today. This is a topic I love. It's one we hear about quite a bit and in coaching sessions that we hold with investors and savers, and the organizations we serve in group workshops. You know, there are just numerous hundreds, thousands of opinions on this that you can read on blog posts, on social media, and all over the Internet.

So, what's my guidance? Do I really focus on helping people save for retirement? We are retirement plan advisors or is it about enjoying your life today? You know, “YOLOing” into the summer? What's the right thing? I'll start off by saying in tens of thousands of one one-on-one coaching sessions and hundreds if not thousands of group workshops that our team has delivered to individuals and organizations.

I've not once run into somebody at or nearing retirement that said, you know, “I wish I would have saved less. I wish I would have spent more of my money and enjoyed more of my life”. Now there are things that they wish they would have done differently, but the vast majority, the wisdom that they share in a group workshop, or a 1:1 session is and I stress to people, get started saving in your 401(k), save as much as you can as early as you can.

Do this while you're young. Unlike I did. That's the conventional wisdom from those who are nearing or at retirement. Now, I agree with that, but I also recognize that in real life, in practice, there are financial priorities, goals, and challenges that we face that are important to us that might feel more important to us today or a year from now then our retirement, which could be ten, 20 or 30 years down the road. So, the guidance that I have is helping individuals, helping families or households delicately balance those two things, making the best decisions for your long-term financial life, for your retirement needs, while also meeting the needs, wants, and goals you have for today, tomorrow, a year, three or five years down the road, right?

A few months ago, I posted a picture of my recycling bin, filled with Starbucks cups as a joke to kind of like a show a busy week of you know, doing work as a retirement advisor. And somebody gave me a little grief on LinkedIn saying, if you would just put that money in your retirement account, just think of the tens of thousands of dollars I would add for retirement.

And while from a purely financial perspective, that person is right, I think from a practical perspective, the sort of rule of thumb of, well, don't go to Starbucks or don't eat lunch out, pack your lunch every day comes across as disingenuous. Those usually are the things that are stopping us from ensuring we have enough money for retirement, maybe doing that excessively or not really budgeting for those things in our overall cash flow plan can detract from our retirement income needs.

But realistically, we need to deliver financial education and guidance. It's a balance between helping people make the best decision for their long-term well-being aspirational around enjoying the things that make you happy, that propel you to achieving your personal professional goals today, tomorrow, and over the next three, five, and seven years. So last thoughts on this, in a kind of an example is we want you to be in a position where you're on track for retirement, but also able to meet those financial priorities that come up in the in the medium term.

Maybe it's like expanding or starting a family. I wouldn't want somebody to save significantly in their 401(k) and be well ahead of track in your 401(k), but then get to a point when you're starting or expanding your family and you need to move to for a property that fits your family size and you can't do it or you're financially stressed because you haven't been able to save enough in emergency savings or for a down payment or moving costs or things like that.

You want to be able to navigate both of those things. Enjoying your life today, meeting your income needs and your other goals that you have while also saving for your long-term financial future. So, it's a delicate balance of both. We think that's really the genesis of a kind of comprehensive financial coaching and education. I think it's a great question.

We don't want you to totally wreck your budget and your financial picture by having a great summer, but then realizing that, you know, you did take steps to do a bad job with long-term goals. We want you to be able to do both. Enjoy today, and tomorrow, in your long-term plans. Let's hope that helps and see you again next time!