Ever wonder if you are saving Too Much?

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sapper1371
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Ever wonder if you are saving Too Much?

Post by sapper1371 » Thu Jan 03, 2019 6:08 pm

Wife and I are by no means wealthy but we have recently seen significant increases in our wages (~$250k combined) that now allows us to easily max out two 401ks, Backdoor ROTHs and HSAs with plenty left over while still living comfortably.

We were not able to max everything until recently so our retirement portfolio is only at about $600k (both 39) but jobs are stable and likely to increase further so with any luck this will grow quite nicely using the BH philosophy over the next 20-25 years. We also both have modest pensions to help as well.

I have recently discovered that my employers 401k allows after tax deductions and in-service rollovers so naturally I’m now tempted to start doing MBR with the excess funds. However part of me keeps asking if it’s possible that one day I will wish that I had taken more time off work or went on more vacations instead? I have 2 young children so these are years I won’t get back.

Anyone who’s retired have any regrets on how much they saved vs lived during their younger years? I know there are probably a lot of people who regret not saving more!

These are good problems to have, just trying to find balance so any thoughts would be appreciated.

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bottlecap
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Re: Ever wonder if you are saving Too Much?

Post by bottlecap » Thu Jan 03, 2019 6:09 pm

No. I can spend it at any time. Once spent,it cannot be saved.

JT

livesoft
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Re: Ever wonder if you are saving Too Much?

Post by livesoft » Thu Jan 03, 2019 6:12 pm

We saved quite a lot when we were younger. It allowed me to go to half-time at age 50 and spend lots of time with my kids when they were very young teenagers and older.
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Rus In Urbe
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Re: Ever wonder if you are saving Too Much?

Post by Rus In Urbe » Thu Jan 03, 2019 6:12 pm

You never know what is going to happen in the future (illnesses, job losses, other black swan events).

You can't save too much.

Unless you feel like you are missing out on life by not spending something to enjoy yourselves---yes, do that!

But if you are spending enough to enjoy life, and doing your duty philanthropically if you are so inclined, then with every additional dollar: save, save, save, save, save.
I'd like to live as a poor man with lots of money. ~Pablo Picasso

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MortgageOnBlack
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Re: Ever wonder if you are saving Too Much?

Post by MortgageOnBlack » Thu Jan 03, 2019 6:12 pm

bottlecap wrote:
Thu Jan 03, 2019 6:09 pm
No. I can spend it at any time. Once spent,it cannot be saved.

JT
To play devil's advocate, every day lived cannot be re-lived. I believe a balance is in order; personally, I don't see the point in amassing a great windfall for someone else.

22twain
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Re: Ever wonder if you are saving Too Much?

Post by 22twain » Thu Jan 03, 2019 6:16 pm

In the immortal words of Yogi Berra, "it's like déjà vu all over again." :wink:

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bloom2708
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Re: Ever wonder if you are saving Too Much?

Post by bloom2708 » Thu Jan 03, 2019 6:21 pm

It sounds like you are saving enough. Mega-Back-Door-Roth is nice in power earning years. Saving to taxable is also nice.

Definitely take your vacation. Spend time with wife/kids. Those don't seem like "or" decisions with Mega-Back-Door-Roth. Unless you are hourly and have to work more to save more.

Save "enough". Spend the rest.
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MiddleOfTheRoad
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Re: Ever wonder if you are saving Too Much?

Post by MiddleOfTheRoad » Thu Jan 03, 2019 6:29 pm

This is where having saving goals help. Save enough to achieve your goals (with conservative assumptions). Spend as much of the leftovers as you desire (you don’t have to spend all :happy )

FOGU
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Re: Ever wonder if you are saving Too Much?

Post by FOGU » Thu Jan 03, 2019 6:30 pm

I'm not sure I get the implied direct correlation between spending money and enjoying life.
~ Don't just do something. Sit there. ~

stoptothink
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Re: Ever wonder if you are saving Too Much?

Post by stoptothink » Thu Jan 03, 2019 6:33 pm

No, we are very happy with out current quality of life while still saving 50%+ of our gross income. I can't think of many things I could spend money on that would significantly (if at all) increase my happiness. But, I derive great happiness from knowing there is almost nothing that could happen which would risk our financial stability and that we are in a position to be financially independent at a very early age.

Silverado
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Re: Ever wonder if you are saving Too Much?

Post by Silverado » Thu Jan 03, 2019 6:37 pm

FOGU wrote:
Thu Jan 03, 2019 6:30 pm
I'm not sure I get the implied direct correlation between spending money and enjoying life.
+1

Most of my enjoyment comes from a couple hundred dollars of stuff.

cbr shadow
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Re: Ever wonder if you are saving Too Much?

Post by cbr shadow » Thu Jan 03, 2019 6:45 pm

I agree that there needs to be some type of balance. If you feel like you're not getting enough time with your kids, not going on any vacations where you could make some wonderful memories, etc, then you need to make a change. If you've already struck that balance but now you're just making a lot more money then there's no reason to change your lifestyle.

Also there's nothing saying you have to make huge permanent changes. Maybe try taking a nice vacation with your family and decide afterwards if it was worth the expense. If so, do more as long as you're still able to save a significant portion of your income.

Keep in mind that by saving money you're also buying security for your family, which they benefit from if times are tough in the future. Lots of things could happen to the economy in your field, your job specifically, your health, etc where having a big cushion would relieve a lot of stress.

smitcat
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Re: Ever wonder if you are saving Too Much?

Post by smitcat » Thu Jan 03, 2019 6:55 pm

Silverado wrote:
Thu Jan 03, 2019 6:37 pm
FOGU wrote:
Thu Jan 03, 2019 6:30 pm
I'm not sure I get the implied direct correlation between spending money and enjoying life.
+1

Most of my enjoyment comes from a couple hundred dollars of stuff.
There are many things that we do that are mostly free.
There are also many things that cost a bit of money.
And there are things that can be pretty spendy.

I would hate to think that we would not be able to do all the things we like.

ge1
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Re: Ever wonder if you are saving Too Much?

Post by ge1 » Thu Jan 03, 2019 7:01 pm

We are healthy spenders, so no, definitely not :D

FOGU
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Re: Ever wonder if you are saving Too Much?

Post by FOGU » Thu Jan 03, 2019 7:02 pm

smitcat wrote:
Thu Jan 03, 2019 6:55 pm
Silverado wrote:
Thu Jan 03, 2019 6:37 pm
FOGU wrote:
Thu Jan 03, 2019 6:30 pm
I'm not sure I get the implied direct correlation between spending money and enjoying life.
+1

Most of my enjoyment comes from a couple hundred dollars of stuff.
There are many things that we do that are mostly free.
There are also many things that cost a bit of money.
And there are things that can be pretty spendy.

I would hate to think that we would not be able to do all the things we like.
You can do absolutely anything.
You just can't do everything.
~ Don't just do something. Sit there. ~

smitcat
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Re: Ever wonder if you are saving Too Much?

Post by smitcat » Thu Jan 03, 2019 7:08 pm

FOGU wrote:
Thu Jan 03, 2019 7:02 pm
smitcat wrote:
Thu Jan 03, 2019 6:55 pm
Silverado wrote:
Thu Jan 03, 2019 6:37 pm
FOGU wrote:
Thu Jan 03, 2019 6:30 pm
I'm not sure I get the implied direct correlation between spending money and enjoying life.
+1

Most of my enjoyment comes from a couple hundred dollars of stuff.
There are many things that we do that are mostly free.
There are also many things that cost a bit of money.
And there are things that can be pretty spendy.

I would hate to think that we would not be able to do all the things we like.
You can do absolutely anything.
You just can't do everything.
I have found you can do most all of the things you want as long as you do not follow the paths of the pack.

FOGU
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Re: Ever wonder if you are saving Too Much?

Post by FOGU » Thu Jan 03, 2019 7:18 pm

smitcat wrote:
Thu Jan 03, 2019 7:08 pm
FOGU wrote:
Thu Jan 03, 2019 7:02 pm
smitcat wrote:
Thu Jan 03, 2019 6:55 pm
Silverado wrote:
Thu Jan 03, 2019 6:37 pm
FOGU wrote:
Thu Jan 03, 2019 6:30 pm
I'm not sure I get the implied direct correlation between spending money and enjoying life.
+1

Most of my enjoyment comes from a couple hundred dollars of stuff.
There are many things that we do that are mostly free.
There are also many things that cost a bit of money.
And there are things that can be pretty spendy.

I would hate to think that we would not be able to do all the things we like.
You can do absolutely anything.
You just can't do everything.
I have found you can do most all of the things you want as long as you do not follow the paths of the pack.
That has been my experience too.
~ Don't just do something. Sit there. ~

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ruralavalon
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Re: Ever wonder if you are saving Too Much?

Post by ruralavalon » Thu Jan 03, 2019 7:26 pm

I never wondered if we were saving too much.
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GerryL
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Re: Ever wonder if you are saving Too Much?

Post by GerryL » Thu Jan 03, 2019 7:27 pm

As others have said, set savings goals but also make sure to enjoy your life in the here and now. Just be aware that if you become accustomed to a more expensive lifestyle, you'll need to save more to support that lifestyle in retirement.

I am one of those people who did save "too much." But having been through long bouts of unemployment (both voluntary and involuntary), I never thought of that as an issue. And never felt like I was missing out. Now that "too much" is supporting a very fun and comfortable retirement.

delamer
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Re: Ever wonder if you are saving Too Much?

Post by delamer » Thu Jan 03, 2019 7:51 pm

I do have some small regrets that we seem to have “oversaved.” Mostly I wish we had done more traveling overseas.

But -

1) hindsight is 20/20 and we made it to semi-retirement without any major financial or health setbacks.

2) we both have pretty robust pensions (plus Social Security) so our circumstances are different than most. In other words, we don’t need our savings to be financially comfortable in retirement.

gluskap
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Re: Ever wonder if you are saving Too Much?

Post by gluskap » Thu Jan 03, 2019 8:12 pm

I think it depends on when you want to retire and what kind of lifestyle you want to live. When I first started the idea of early retirement was really motivating so I tried to go all in and up our savings. I just found it wasn't sustainable and I was miserable cuz I couldn't do the things I wanted to do (eat well and travel). Finally decided there is a nice compromise. I still try to eat well and travel but I do try to find more cost effective ways to do it and then save the rest. I don't beat myself up if I don't save exactly what my goal is as long as I am doing the minimum which is maxing out 401k, Roth IRA, and contributing regularly to 529 and taxable.

JBTX
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Re: Ever wonder if you are saving Too Much?

Post by JBTX » Thu Jan 03, 2019 8:17 pm

Seems like this is 3 different questions.

1. Should I take more vacations? If you can get the time off to do so, and afford it, and think you will enjoy it, probably yes. For us vacations weren't so much about the money but about everybody's schedules.

2. Should I take more time off work? Not sure what that means. Are you contemplating quitting your job? Do you like your job? Is more time off at your existing job an option?

3. Should you save more? If you have enough available to save, I would. Even if you needed some money from retirement accounts you could pull some from individual Roth contributions.

You don't know what the markets or the economy may do in the future. I would not stop saving. But I wouldn't bypass quality vacation opportunities either if you can make them work.

blinx77
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Re: Ever wonder if you are saving Too Much?

Post by blinx77 » Thu Jan 03, 2019 8:23 pm

A few years ago my wife and I restructured our life. We had a few kids (3), bought a house, I quit an intense job for a less intense one (shorter commute to boot) and she quit a less intense job to watch the kids. Our savings rate dropped from 70% to 15%. A few years and some raises and completed home renovations later, it's back up to 30-40% (depending on whether you count mortgage payoff as savings). So I suppose, due to our choices, the answer is yes, and that we decided to dial back on money earning to pursue other goals and to spend on worthy goals.

But do I think that my life is somehow harmed by driving an old used car rather than a leased Mercedes?

Not for a minute.

The two main constraints in modern life are time and money. "Stuff" is increasingly irrelevant (and, IMO, so are really expensive "experiences" when fantastic experiences can also be had much cheaper).

Grt2bOutdoors
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Re: Ever wonder if you are saving Too Much?

Post by Grt2bOutdoors » Thu Jan 03, 2019 8:34 pm

Moderation in everything. If you are doing 2 401k’s, 2 Roth’s, that’s $50k not including any employer match and then you have a modest pension too! You can afford to take vacation with your kids - experiences. You can save more money too, how secure are your careers?
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ruralavalon
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Re: Ever wonder if you are saving Too Much?

Post by ruralavalon » Thu Jan 03, 2019 8:40 pm

I am 73, retired for 8 years, with no pension. Providing for my retirement was entirely on me. I never felt that we saved too much for retirement.

We have 4 children, and put them all through 4 years of college with no borrowing.

At age 39 with two young children you will probably want to start planning for their education.

Make sure that you are now enjoying life and your family, rather than put everything into taking care of the future. With $600k at age 39, you are far ahead of your contemporaries.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

Jags4186
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Re: Ever wonder if you are saving Too Much?

Post by Jags4186 » Thu Jan 03, 2019 8:54 pm

Never once have I thought “man I wish I had less money”.

You only have saved enough when you can’t think of ways to spend it.

Topic Author
sapper1371
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Re: Ever wonder if you are saving Too Much?

Post by sapper1371 » Thu Jan 03, 2019 8:55 pm

Great feedback!

I certainly understand that there are a lot of unknowns and that the more that I save the more certain I will be that we will be able to retire conformably.

I guess I am worried that one of us might have health problems or something and we might not get to enjoy our golden years they way we had hoped to. No particular family health issues, just know of a few people in our lives that have recently passed away right around the time that they retired.

I think that I am just going to take a second vacation every year which should not prevent me from still adding more to taxable/MBR but I just won’t obsess about “maxing out” the MBR. I have a tendency to feel guilty if there is any tax advantaged space that I am not taking advantage of but I will just have to keep balance in mind.

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sapper1371
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Re: Ever wonder if you are saving Too Much?

Post by sapper1371 » Thu Jan 03, 2019 8:59 pm

ruralavalon wrote:
Thu Jan 03, 2019 8:40 pm
At age 39 with two young children you will probably want to start planning for their education.
I should note that in addition to the $600k nest egg we have $50k in 529s for our kids (3 and 6 now) and add about $4k a year to each as well. I had to join the military to pay for school so it’s impprtant to me to provide that for my kids.

MathWizard
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Re: Ever wonder if you are saving Too Much?

Post by MathWizard » Thu Jan 03, 2019 9:06 pm

I hope to match my income in retirement with my net income including benefits minus what I am saving for retirement.

This means my lifestyle stays the same.

However, this means when your income goes up, your savings need to go up quite a bit.

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bottlecap
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Re: Ever wonder if you are saving Too Much?

Post by bottlecap » Thu Jan 03, 2019 9:10 pm

Do people really need to be reminded that there should be a balance between saving and spending?

It seems self-evident.

JT

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sapper1371
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Re: Ever wonder if you are saving Too Much?

Post by sapper1371 » Thu Jan 03, 2019 9:16 pm

bottlecap wrote:
Thu Jan 03, 2019 9:10 pm
Do people really need to be reminded that there should be a balance between saving and spending?

It seems self-evident.

JT
Not sure what you are getting at here. What’s wrong with getting feedback from others on where they found that balance?

In a previous post you said you had no regrets about saving because “you can spend it at any time”. Don’t you know that this is not necessarily true?

PhilosophyAndrew
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Re: Ever wonder if you are saving Too Much?

Post by PhilosophyAndrew » Thu Jan 03, 2019 9:48 pm

bottlecap wrote:
Thu Jan 03, 2019 9:10 pm
Do people really need to be reminded that there should be a balance between saving and spending?

It seems self-evident.

JT
I think discussing that balance is a useful way to correct for over-the-top advocacy for higher and higher savings rates, lower and lower withdrawal rates, and preparing longer and longer possible lifespans.

If accumulating investments assets is conceived as deferring consumption (rather than either as an acquisitive end in itself or as a means for transferring wealth through legacies), then it becomes an interesting and rich question about when and how best to use the investments to consume. Yes, one wants to be prepared for old age, but yes it is likely that many of us won’t significantly exceed our expected lifespans and so run a risk of deferring consumption too long.

If I or my spouse die at 60, will we have been so zealous at deferring consumption as to make our short lives less rich and happy? How does one best
manage consumption and its deferral over many decades of life? How do we best deal with the facts that we will die but can’t generally know when?

There are many pathological forms of consumption, but there may also be unhealthy forms of deferring consumption.

Understanding how to strike a wise balance between consumption and its deferrral is an excellent topic for Bogleheads to discuss thoughtfully!

Andy

broncocountry25
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Re: Ever wonder if you are saving Too Much?

Post by broncocountry25 » Thu Jan 03, 2019 9:49 pm

If someone feels like they are not enjoying life I believe they need to make a change.

What I have learned though is most people find ways to waste money. To me I am so much more motivated by saving now then consuming.

This might change one day but until then I am going to try and keep it up!

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Watty
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Re: Ever wonder if you are saving Too Much?

Post by Watty » Thu Jan 03, 2019 9:54 pm

sapper1371 wrote:
Thu Jan 03, 2019 6:08 pm
Wife and I are by no means wealthy but we have recently seen significant increases in our wages (~$250k combined).....
You may not be "Lifestyles of the Rich and Famous" wealthy but don't kid yourself, by pretty much any reasonable standard you would qualify as being "rich". This web site would rank you in the top 4% of households but for people that are the same age, 39, you would rank even higher.

https://money.cnn.com/calculator/pf/inc ... index.html

If you saved more then you might have to live the same lifestyle as if you were making $150K or $200K which should not be a hardship and it sounds like you were recently living on less than that. That would still leave you very well off.
sapper1371 wrote:
Thu Jan 03, 2019 6:08 pm
....jobs are stable and likely to increase further....
One thing you can do is to comment to saving any future pay increases.
sapper1371 wrote:
Thu Jan 03, 2019 6:08 pm
However part of me keeps asking if it’s possible that one day I will wish that I had taken more time off work or went on more vacations instead? I have 2 young children so these are years I won’t get back.
Spending time with your kids is absolutely a good tradeoff if that is what you want to do. They are 3 an 6 now and by the time they are teenagers things will be a lot different and they will be a lot more involved with their friends and activities. There will still be good family time when they are teenagers but by then their reaction to spending all day with their parents will be different than it is now.

I would also question how expensive your vacations would need to be. Young kids will likely have just as good a time at a local lake as they would in Europe or the Caribbean.

You might want to consider moderating your lifestyle as an option if you need to make a tradeoff.

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sapper1371
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Re: Ever wonder if you are saving Too Much?

Post by sapper1371 » Fri Jan 04, 2019 6:48 am

Great insights Watty, thanks!

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Re: Ever wonder if you are saving Too Much?

Post by RipVan55 » Fri Jan 04, 2019 7:18 am

"Ever wonder if you are saving Too Much?"

I did wonder if 50% per year was too much early in my career but I wanted to own a home outright and get the retirement funds going, knowing the value of time and being half decent with math. A CPA friend told me to keep it to 25% and spend more. I cut it to 35% until my mid 30's.

You will never know what unfortunate events such as job loss or downturns in health will beset you. Both hit me. I believe I had found reasonable balance in my 30's, 40's, and 50's and do not regret the vacations, etc. I do regret not ever buying that fast red car from Italy.

WVbaron
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Re: Ever wonder if you are saving Too Much?

Post by WVbaron » Fri Jan 04, 2019 8:32 am

This is a really interesting post and something I have been thinking a lot about lately too. I am single, 38 yrs old and recently joined the 2 comma club (although past few weeks too it back away from me :oops: ) I have been on an expat contract in Europe for the last 6 years which has definitely helped me save more and current put away around 55% of my income each year...similar routine with my 401k, backdoor roth, putting money in taxable each paycheck, etc.

During the 2nd half of 2018 and now in the new year, I have quite a few holidays planned (gotta love Europe vacation allotments!!!) and have internally struggled a little bit with 'loosening the purse strings'. However, after following the Boglehead principles for the past few years and getting my finances organized, I feel like it is a good time to seek that savings / quality of life balance. It is important to keep an eye on 'lifestyle creep' but I am working hard at keeping my saving goals, increasing my taxable contributions with salary increases, but also allowing myself to spend a bit more than I would have in the past.

So, if you can keep a healthy savings rate and have some fun along the way, I say go for it...you only live once. Good luck!

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Re: Ever wonder if you are saving Too Much?

Post by fourwheelcycle » Fri Jan 04, 2019 8:35 am

Rus In Urbe wrote:
Thu Jan 03, 2019 6:12 pm
You never know what is going to happen in the future (illnesses, job losses, other black swan events).

You can't save too much.

Unless you feel like you are missing out on life by not spending something to enjoy yourselves---yes, do that!

But if you are spending enough to enjoy life, and doing your duty philanthropically if you are so inclined, then with every additional dollar: save, save, save, save, save.
I absolutely agree - I could not say it any better.

If you are really worried that you may be saving too much, build a spreadsheet with one row for each year, out to age 100. For the columns, include your income, taxes, annual expenditures for living and for charity, taxable and retirement account balances, and other items such as house value and mortgage balance. The last two columns can be your total savings and your net worth. After retirement add columns for your pension income; after age 70 add columns for your SSA and RMD income. Include fixed cell references for expected annual stock and bond returns, COL increases, annual pay raises, and expected average tax rates. At the end of each year change the the row entry font to bold to make the the numbers final. All future year row values will be projections based on your built-in formulas and fixed reference cell assumptions. Play with the numbers and aim to have a positive balance at age 100.

I never thought about these issues or built this spreadsheet until I was in my 50s. Before that we just lived our lives, raised our kids, and saved whatever we did not spend, which turned out to be about 50% of our income after taxes.

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ruralavalon
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Re: Ever wonder if you are saving Too Much?

Post by ruralavalon » Fri Jan 04, 2019 12:02 pm

MathWizard wrote:
Thu Jan 03, 2019 9:06 pm
I hope to match my income in retirement with my net income including benefits minus what I am saving for retirement.

This means my lifestyle stays the same.

However, this means when your income goes up, your savings need to go up quite a bit.
Maintaining the a lifestyle in retirement equal to the lifestyle just before retirement is the goal for many people.

A major difficulty for investors who are not close to retirement age is in predicting decades in advance what that lifestyle might be. I personally don't feel is really practical to accurately estimate retirement living expenses until about 5-10 years from retirement.

As you indicate another major difficulty is that the higher one's income, the smaller the proportion that will be replaced in retirement by Social Security or any pension.

"Same lifestyle in retirement" is an attainable goal, it's just difficult to turn it into a math problem.
Last edited by ruralavalon on Fri Jan 04, 2019 12:16 pm, edited 1 time in total.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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ruralavalon
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Re: Ever wonder if you are saving Too Much?

Post by ruralavalon » Fri Jan 04, 2019 12:13 pm

sapper1371 wrote:
Thu Jan 03, 2019 8:55 pm
Great feedback!

I certainly understand that there are a lot of unknowns and that the more that I save the more certain I will be that we will be able to retire conformably.

I guess I am worried that one of us might have health problems or something and we might not get to enjoy our golden years they way we had hoped to. No particular family health issues, just know of a few people in our lives that have recently passed away right around the time that they retired.

I think that I am just going to take a second vacation every year which should not prevent me from still adding more to taxable/MBR but I just won’t obsess about “maxing out” the MBR. I have a tendency to feel guilty if there is any tax advantaged space that I am not taking advantage of but I will just have to keep balance in mind.
Health issues are always a big unknown in planning.

I think it is quite sensible to add a second vacation as opposed to trying to max a mega backdoor Roth. You are already making good use of tax-advantaged opportunities.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

MathWizard
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Re: Ever wonder if you are saving Too Much?

Post by MathWizard » Fri Jan 04, 2019 12:32 pm

ruralavalon wrote:
Fri Jan 04, 2019 12:02 pm
MathWizard wrote:
Thu Jan 03, 2019 9:06 pm
I hope to match my income in retirement with my net income including benefits minus what I am saving for retirement.

This means my lifestyle stays the same.

However, this means when your income goes up, your savings need to go up quite a bit.
Maintaining the a lifestyle in retirement equal to the lifestyle just before retirement is the goal for many people.

A major difficulty for investors who are not close to retirement age is in predicting decades in advance what that lifestyle might be. I personally don't feel is really practical to accurately estimate retirement living expenses until about 5-10 years from retirement.

As you indicate another major difficulty is that the higher one's income, the smaller the proportion that will be replaced in retirement by Social Security or any pension.

"Same lifestyle in retirement" is an attainable goal, it's just difficult to turn it into a math problem.
Luckily, I am a mathematician and programmer.

The problem with not estimating retirement living expenses until 5-10 years is that is too late if you are not
somewhere in the ballpark. If you have under-saved, it takes huge amounts of savings to correct. Many champion
working longer as the solution to under-saving, but that often is not an option available to many people.
I have been planning on working until 65 (early retirement these days) but being Financially Independent by 62 with conservative return estimates. This way, if I can't work until 65, I will still be OK, just no fancy trips or cars in retirement.

LiterallyIronic
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Re: Ever wonder if you are saving Too Much?

Post by LiterallyIronic » Fri Jan 04, 2019 12:37 pm

Sometimes, yes. There are a lot of fun things we could do that we skip. We pretty much never go anywhere or do anything. But I'm 35 (wife is 30) and we have $64k saved for retirement (no sympathy for OP's "only $600k" at 39). So I HAVE to keep saving like a madman just to get caught up to where I'm supposed to be. We're not even on pace for retiring at 65. Maybe I can loosen the purse strings a little when we're on track for that. There was a big, extended family vacation get-together last Summer. My wife's parents, siblings, and their families were all invited. Almost everyone went. Except us.

My wife's family does a semi-annual newsletter updating everyone about what all the siblings and their families are doing. Ours is always, "We went to work, came home and ate dinner, and sat around doing nothing until bedtime."

Gotta get caught up financially before anything else is even on the table.

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knpstr
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Re: Ever wonder if you are saving Too Much?

Post by knpstr » Fri Jan 04, 2019 1:05 pm

MortgageOnBlack wrote:
Thu Jan 03, 2019 6:12 pm
bottlecap wrote:
Thu Jan 03, 2019 6:09 pm
No. I can spend it at any time. Once spent,it cannot be saved.

JT
To play devil's advocate, every day lived cannot be re-lived. I believe a balance is in order; personally, I don't see the point in amassing a great windfall for someone else.
+1
Well said.
"Enough" is different for everyone and continuing to accumulate may not be a by-product of worrying about having too little but some people really enjoy their work. If you truly LOVE what you do (minority of people) and accumulating/saving more and more money doing so just as a by-product then maybe no, you can't save too much - in that way - but the purpose of work here is not to accumulate a larger fortune but it is the joy the work gives you.

If you are delaying "living your life" to accumulate ever more money then you may be saving too much. If you have modest needs and have already secured the capital to cover expected ongoing expenses, then you are likely making a mistake to work - to delay the life you wish to live - just to make "a little more". You could die tomorrow. Would it be worth it to work at a job you (lets presume) you'd rather not work at for another handful of years just to build up an excess cushion on an already secure retirement?

It is a difficult question to give a universal response - but I don't think it is wise to perpetually "live for tomorrow", so to question if you are saving too much is an important question. Of course, Jack Bogle wrote a book on the topic.

"I shall borrow from Epicurus: "The acquisition of riches has been for many men, not an end, but a change, of troubles." I do not wonder. For the fault is not in the wealth, but in the mind itself. That which had made poverty a burden to us, has made riches also a burden." Seneca quoting Epicurus.

"The fool, with all his other faults, has this also, he is always getting ready to live." Seneca quoting Epicurus again in his letters

"Some men, indeed, only begin to live when it is time for them to leave off living. And if this seems surprising to you, I shall add that which will surprise you still more: Some men have left off living before they have begun." Seneca again
Very little is needed to make a happy life; it is all within yourself, in your way of thinking. -Marcus Aurelius

heyyou
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Re: Ever wonder if you are saving Too Much?

Post by heyyou » Fri Jan 04, 2019 1:44 pm

We saved until we retired at 55. With her current health problems, we are very glad for the time together since then.

Thegame14
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Re: Ever wonder if you are saving Too Much?

Post by Thegame14 » Fri Jan 04, 2019 1:46 pm

#firstworldproblems.... even if you in theory saved too much, just retire sooner, give more to your kids, or grandkids, or charity....

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Watty
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Re: Ever wonder if you are saving Too Much?

Post by Watty » Fri Jan 04, 2019 1:55 pm

MathWizard wrote:
Thu Jan 03, 2019 9:06 pm
I hope to match my income in retirement with my net income including benefits minus what I am saving for retirement.

This means my lifestyle stays the same.

However, this means when your income goes up, your savings need to go up quite a bit.
Two things to consider;

1) Your income needs will be different at different ages in retirement. I have seen relatives naturally slow down by the time they were in their mid 70's even though they were in relatively good health. At that point they didn't want to do things like travel much or even go out to expensive dinners. They were also more interested in downsizing than buying new stuff. They lived in a paid off house so there were many months when they didn't even spend their entire Social Security check.

2) I retired a few years ago and between gettin my house paid off, being done with child raising costs, and being in a lower tax bracket my expenses have mostly gone down. There are some new expenses like traveling more and medical costs but once I get on Medicare my overall expenses will go down some more. You may not need to match your prior income.

MathWizard
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Re: Ever wonder if you are saving Too Much?

Post by MathWizard » Fri Jan 04, 2019 2:41 pm

You are correct. I did subtract out my mortgage and college since they were not long term expenses, and have now gone away.
I have also subtracted term life which I will get rid of once I am Financially Independent, but added in estimates for health ins, including the cost of medicare (surprisingly total cost about $5K each for my spouse and me, I expected this to be less.)

Otherwsie I expect base costs to be the same. Travel is beyond base costs, but this is discretionary, so if I do not have the money,
I will not use it.

I've set aside about $40K for travel in the first few retirement years, but expect to have maybe $8K extra for travel past that.
That money will come from income of an extra $200K of investment. After we quit travelling, that will be kept for those end of life expenses, like long-term care. I estimate the risk of the first of us blowing through that much is less than the risk giving money to a LTCi
company and not receiving the care. The second if us to need LTC have a house and property to sell. That is likely somewhat over $300K, and of course , we could blow the rest of the fairly large portfolio at that point. There is still the long-tail of risk of a decade of LTC, but I have not seen that in either of our families, and I have no way of handling that.

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wander
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Re: Ever wonder if you are saving Too Much?

Post by wander » Fri Jan 04, 2019 2:48 pm

I rather save more so I can be financial independent when we want. Who knows what will happen to me tomorrow that I may become disabled (car accident, for example) preventing from taking care of my family. Disability does not care if I am 20s, 30s or 60s. The earlier I get to FI , the better outcome will be for my family.

MsEsquire
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Re: Ever wonder if you are saving Too Much?

Post by MsEsquire » Fri Jan 04, 2019 3:21 pm

You're saving more than you ever have, which is great! :sharebeer But watch out for lifestyle creep. You may be spending more than ever before too and thus increasing the amount you'll need to comfortably retire and the length of your working life. Let the math show begin:

Based on the contribution amounts noted above (401(k)s; HSAs; BDRs)*2: $38,000+7,000+12,000(using 2019 contribution limits), you're currently saving $57,000 (not including employer match because it wasn't noted :D). $57,000 is a 22.8% pretax savings rate (kudos, this is WAY above average). However, this also assumes a 77.2% spending rate of $193,000 per annum. To support $193,000 per year in retirement, assuming a 4% safe withdrawal rate, you'd need $4,825,000 to retire (25x$193,000), more if you want to help the kids with college. Based on current assets of $600,000 at 39 yo, you've got quite a ways to go to get there. Assuming a 5% inflation-adjusted rate of return, you've got another 35+ years of saving to reach financial independence.

Alternatively, if you use some of those extra funds to pad the mega backdoor roth, pay off your house early, and still live a luxuriously frugal life filled with reasonably-priced travel and family fun, you could slash your working years. (See: http://www.mrmoneymustache.com/2012/01/ ... nt-page-2/)

I don't know how much your pensions are or the true delta between your saving and spending rate, but I speak from experience when I say that padding the accounts in boon times gives you nothing but wonderful options later on and peace of mind. My husband and I haven't pocketed a raise or bonus in 5 years, instead investing all the money in total stock index funds. The decision to max all our accounts and push extra money in our taxable accounts has literally made the difference between having 160k in student loan debt and negative net worth after grad school in 2008 to having $1.3M in invested assets today and being on track to be financial independent by 45/47yo respectively. The best part is that, like you, we never made that much money before so we don't even know what we're "missing."

FOGU
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Re: Ever wonder if you are saving Too Much?

Post by FOGU » Fri Jan 04, 2019 4:11 pm

MsEsquire wrote:
Fri Jan 04, 2019 3:21 pm
Based on the contribution amounts noted above (401(k)s; HSAs; BDRs)*2: $38,000+7,000+12,000(using 2019 contribution limits), you're currently saving $57,000 (not including employer match because it wasn't noted :D). $57,000 is a 22.8% pretax savings rate (kudos, this is WAY above average). However, this also assumes a 77.2% spending rate of $193,000 per annum. To support $193,000 per year in retirement, assuming a 4% safe withdrawal rate, you'd need $4,825,000 to retire (25x$193,000), more if you want to help the kids with college. Based on current assets of $600,000 at 39 yo, you've got quite a ways to go to get there. Assuming a 5% inflation-adjusted rate of return, you've got another 35+ years of saving to reach financial independence.
To the OP: Are these assumptions about what you are saving correct? If so, assuming no taxable savings earmarked for retirement, and assuming $70k in taxes, your spending/consumption is over $10k a month. To support that in retirement you would need at least $3 million in assets.

I don't know if the above is correct for your case, but I'll just state a personal opinion that any family of four that is spending/consuming $10k a month is not saving excessively.
~ Don't just do something. Sit there. ~

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