Labor Day, don’t plan to work forever!

Posted August 26, 2017

1 Thessalonians 4:12 ESV “So that you may walk properly before outsiders and be dependent on no one.”

What are the reason you labor, or should I say why do you work? You are probably thinking you work in order to earn money so you can feed your family, pay for a place to live, pay for gas so you can go to work, etc… Have you ever thought past your immediate needs and thought longer term? For example, do you plan to work forever? When I was young and naïve, I honestly didn’t think about retirement because I thought I would be dead by then so why even plan for something if I am probably not going to be around for it.

Since I am older and hopefully a little wiser, my views have definitely changed regarding wanting to work forever. For example I understand that retirement isn’t an if question, it is a when question. So if I choose not to work forever, there are some things I need to do now so I don’t have too. I have three things for you to consider doing so you may not have to work forever, unless you really want to!

1. Setting the goal of being debt free
Having little or no debt at retirement is extremely important because the less money that is going out, means the less money going out, that simple! For example if you have a $2,500 a month mortgage payment, a $350, car payment and paying $150 towards a credit card each month, that comes out to $36,000 a year or $3,000 every month you need to come up with. If you are working it may not be a big deal but if you are living on a fixed income, you may not have any money left over for anything else.

2. A larger stash in cash
Most money pro’s recommend having at least 3-6 months of your living expenses in a FDIC- insured savings or FDIC-insured money market account as an example, but keep in mind that the 3-6 months are for people that are working. What if you are going to retire? You may consider increasing that amount to at least 1-2 years of your post-retirement living expenses. The thought process for having at least 1 to 2 years is because if you need cash quickly and have to get it from your retirement funds, there could be extra taxes, fees, an or penalties and if the timing is bad and the market is down you would be violating the rule of buying low and selling high.

3. Understanding that inflation is a real risk
Food, housing, clothing, gas, etc. If you think a loaf of bread is expensive now, can you imagine how much more expensive it will be 20 or 30 years from now? I remember when I was a teenager and paid less than a dollar for a gallon of gas and a movie ticket was around $3.50. As you get older many things you pay for now may cost a lot more in the future which means you will need more money to pay for those things during retirement. The only way you can be ready for the risk of inflation is by putting more money away now.

As you celebrate this Labor Day, don’t forget what you are really working for, not just for in the now, but also for the time many years from now.

posted by Steve Repak
on August, 26
Source: Good Reads

Steve Repak