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Is It Possible to Save Too Much Money?

For most humans, life is much shorter than we would like, and for many of us saving even ten percent of our income will never result in a state of wealth within our lifetime. There are too many forces working against this endeavor: a lack of sufficient opportunity, inflation, and unplanned events to name a few. In addition, most people, at least in the United States, save much less than ten percent. It’s no wonder spending other people’s money and going into debt is so alluring for many.

Even if wealth eventually arises through conscious, compounded saving, by the time we reach a level of net worth that qualifies us to fall into the category we have set as a goal for ourselves, we are too old to enjoy what we have set aside. Putting aside the noble, selfless acts of passing our assets to charitable causes and descendants, the point of accumulating money is not to have a large bank account; the purpose of saving is to do something with the money.

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When we save, we are putting aside our desire to do something now for the chance of doing something more later. Those nurturing a superfrugal mindset argue you should always choose the latter. The problem with the future is it never arrives regardless of how long you wait. Even though there is always a place or time or dollar amount where you can draw the line and begin living your life, that line may never come.

I will freely admit that I am not particularly adept at focusing singularly on the future. I likely fall somewhere along the spectrum of forward-thinkers. While I am not overly concerned about the present and I do not need immediate satisfaction, I do have my doubts about the future. I am saving money for retirement, including putting money into accounts that can’t be touched without penalty until several decades pass, but there is a possibility I may not live long enough to reach that goal. I am sacrificing a part of my life — not only the selfish activities in which I’d like to participate but the good, charitable things I could be doing with that money now — for the chance of doing more later.

If I don’t have the opportunity to do more later later, I would have made many needless sacrifices.

There are no certainties, so how can anyone truly offer advice about how much someone should save for the future? Life is short, and it’s important to make the most of it while you have a chance. No one knows what tomorrow will bring, so we guess and we offer suggestions. Save ten percent of your income (a weak but popular rule of thumb), or save as much as possible, but don’t completely sacrifice your life now for your future.

With your finances in control or on the path to being in control, ensure you are making the most of the short time you have on this planet. The slow road to accumulating money is the road that most people will take, so enjoy the scenery. The future may never come, so don’t deny yourself all joys of experiencing life now, however you define these joys, in deference. If your approach is causing you to miss out on aspects of life that you find important and will later regret, you may be saving too much money.

Updated September 23, 2015 and originally published October 2, 2009.

About the author

Luke Landes is the founder of shizennougyou. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 32 comments… read them below or add one }

avatar 1 Anonymous

It really is a delicate balancing act, isn’t it? To directly answer your question, yes, there is such thing as saving too much. Some savings advice I have seen says max out your 401k contributions and max out your Roth/IRA. Over the course of 40 years, a dual wage earning couple maxing out both accounts with a return of 8% will have almost $12 million in today’s dollars. Although this calculation does ignore inflation, it also ignores that the investment limits are indexed to inflation, so if one keeps up with the limits, thinking of $12 million dollars today isn’t wrong. Throw that into a bond fund or CD returning 2% annually, and you’ll get $240k each year in today’s dollars.

Are there some assumptions in those numbers? You betchya.

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avatar 2 Luke Landes

Those assumptions will hill you (not literally). A lot of people can’t max out their 401(k) contributions because they need their salary to pay today’s expenses and the stock market only pays 8% return on average, not always in specific circumstances (just ask people who retired over the past year). $240,000 in today’s dollars is not a bad income in retirement, let’s hope that’s a reachable goal.

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avatar 3 Anonymous

Dan – The 401(k) limit for under 50 is $16,500 and $5,000 for IRA, this totals $43,000 for a couple.
Whoever offers this ‘max out’ advice has some fortunate clientele or audience. Seems even if this is 20% of income, it addresses those making over $215K/yr, that’s like top 2% or so. Shouldn’t general advice address a general audience?

Flexo – you are right on. The obsession some have to rid themselves of a mortgage or other low interest debt has them living so far below their means that I wonder what the tradeoff is. I’m reminded ever now and then when I pass on a purchase and my daughter (11) says “dad, you know you can afford that.” I can deprive myself of some fun for a year to retire a week earlier at the back end? Seems a bit silly at times.

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avatar 4 Anonymous

First, a note. Jacob, over at Early Retirement Extreme, is one of my heroes. I’m not currently as hardcore as he is and probably never will be, but I’m amazed that he did what he did – retire at 35 after only 5 years of working full time. His website is:

My husband and I are both 29, making over $75K/year each, and we both max out our 401Ks, Roth IRAs, and save (together) another couple thousand a month on top of that. Our savings rate is over 50% of our income. We live in L.A., so cost of living isn’t low, but we share a rented house (much nicer than what we can afford, for about half of what the mortgage would be on what we could afford to buy, in a better neighborhood – though we’re looking at buying a home and renting out rooms to friends), cook at home a lot (we both love to cook), and drive 10+ year old cars we bought for cash, used. We still travel, entertain our friends by throwing parties, and generally don’t feel limited by much – and we pay cash for all of it. We both deliberately chose degrees and jobs that suited our talents and would make money (mechnical engineering for me, computer science for him), and now choose to spend less on cars, clothes, entertainment, and housing than most of our coworkers or others in our income range. I could, easily, pay cash for a Porsche right now – I love sports cars. But you know what? That extra hundred grand now means I can retire 5 years earlier, or take off a work for few years when we decide to have kids, and driving back and forth to work every day in one would just get old. But anytime I want, I can go down the street and go for a test drive, or rent one for the weekend, and the thrill is still there. I’ll take that extra security, peace of mind, and freedom over going out to eat, living alone, or having nicer cars any day.

I realize not everyone can save this much – I’ve worked fast food and retail and my husband has as well, and we know how broke you can be trying to live off of it – so we’re taking advantage of the current security and stability of our jobs to save as much as possible so that not only can we retire earlier if we’re lucky, but we won’t be stuck having to declare bankruptcy if one or both of us gets laid off because we bought expensive cars with loans or a house that’s underwater that we can’t sell and can’t afford to pay on the mortgage.

I guess everyone makes choices, but ours is stability and, hopefully, freedom.

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avatar 5 Anonymous

If only that were the situation, I think that is a fantasy dream people would love to have. I understand your point though and deal with that myself. I have been saving some money, and could keep it saved, but decided to plan a once in a life time trip. Sometimes you really need to enjoy life and take those risks and adventures even if it costs cause you may never have the chance again. I think life experiences are worth depleting savings in certain situations.

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avatar 6 Anonymous

A marginal dollar today may buy less utility than it would in 40 years. What I mean is, today that dollar (or four of them) might buy a proverbial latte, but in 40 years it could buy a meal that’s not cat food. Even with less than 100% odds of being alive 40 years from now, I would rather have that dollar in 40 years than something beyond the point of diminishing returns today.

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avatar 7 Anonymous

As with most things in life, moderation is key. As long as you keep some padding in your accounts for the future, I think it’s okay to take a nice vacation here and there or invest in something else that will make you happy. Ultimately, whether you have billions sitting in your 401k or just a couple thousand, the only thing that will matter to you in the end is how much you enjoyed the journey.

Thanks for the insightful post!

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avatar 8 Luke Landes

Thanks! As I was preparing this post, I was looking for a source for the quotation, “All things in moderation.” For some reason, I thought it was Voltaire, but I kept being pointed to Aristotle. Anyway, I couldn’t find something specific enough, and my classical Greek is rusty, so I went in a different direction.

But moderation in all things is usually a good guideline. If nothing else, it will keep you sane.

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avatar 9 Anonymous

My wife and I are fortunate that we can afford to contribute 15% to our 401Ks (along with our public pensions) while still taking a nice two-week vacation every year and some weekend getaways. Hardcore savers would say to skip the traveling and save the money instead, but the vacation is our “reward” for being frugal throughout the year. We make every effort to budget our money carefully and avoid credit card debt.

It’s important to set financial priorities and make every attempt to meet them. For example our priorities (in order) are: mortgage payment, private school tuition, retirement savings, 529 plan contributions, and travel. We will not devote money to a lower priority unless the higher ones are already taken care of. After our children complete college, then hopefully we will be able to travel more and afford some other luxuries.

As mentioned above, it’s a delicate balance of living in the moment while preparing for the future. However, the thought of working after I turn 60 is a great motivator to keep up the retirement savings. A fear of mine is being one of those elderly workers commonly seen at WalMart or Target nowadays. I doubt they are there because their job is enjoyable and fulfilling.

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avatar 10 Anonymous

DEFINITELY! That’s why I wrote the article “Knowing When To Walk Away” on Wise Bread. Even Larry Ellison from Oracle can always make one more buck.

Choose a an age, and walk away. Enjoy life! He who dies with the most money in the end, LOSES!

Flexo, pls feel free to read: “Knowing When To Walk Away: Financial Planning For An Unknown Ending” It goes more in depth with your topic here.


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avatar 11 Anonymous

This is an excellent article, money is a tool, that may be used for many of life s adventures. I agree if save and save and get to the end of life journey. I do not think anyone who is on their death bed ask how much money do I have now. It only took me 50 plus years to figure that out.

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avatar 12 Anonymous

I definitely think it is possible to save too much. Why waste the now in hopes of a better tomorrow. I put enough away that I will be able to continue my current lifestyle after I retire. I don’t need anything more grand than what I already have and I am enjoying what I have got already.

DO NOT sacrifice the now in hopes of this great retirement of your dreams later. Put enough away that you will be able to continue to live the life you want, which should be what you are living already.

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avatar 13 Anonymous

No doubt life is only worth living if you actually live. However, Flex it seems almost as if you are looking at this issue from a single perspective, yours and yours alone. What about the ones we may leave behind? If I don’t make it to the golden years it pains me more to think that I wouldn’t leave my family in the best position possible. Even with a 7 digit life insurance policy, would your family be “set” or would they be left with the challenge of figuring out how to survive past when the money ran out?

We have to live which means we must spend but does fun, learning and enjoyment mean spending a lot? Surely not!

For my 2cents – if you count the pennies, save in all the little areas you can, work efficiently, stay productive, and avoid the big mistakes, you can afford the occasional splurge, smell the roses along the way and still get to the end with enough to make it all worthwhile.

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avatar 14 Luke Landes

Thanks for bringing up a great point, Greg. In my life, my only real responsibility right now is myself. That might change some day, and my plans and schemes will change at that appropriate time. I have no life insurance; the only living being relying upon my income right now is my cat. And he has modest needs, at least in comparison with a teenage human being or a spouse.

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avatar 15 Anonymous

I don’t know. I guess you take some risks when you decide to hold things back. If you decide to hold out on your dream vacation with your wife until retirement you take a chance that nothing bad happens along the way. Sometimes life throws you a curve ball and all you have left is a bunch of regrets about all the plans you wish you had acted on while you had the chance.

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avatar 16 Anonymous

I do not think it has to be saving a lot OR depriving yourself. One way to free up cash for savings and for fun is to take a look at the “necessities” in your life. Some examples of necessities would be: Unlimited cell phone plans, expensive cable packages, 2 cars, etc. My wife and I live very happy lives with none of those necessities, we have: prepaid phone plans, over the air television and 1 paid off car.

Because we do not have all the “necessities” of most Americans, we have much more money to save than other Americans and also have much more money for the “Dream Vacation” people are talking about above.

Each year we take a 6 week vacation were we stay in hotels and eat 3 meals a day in restaurants. These are our “Dream Vacations” and the cost is not that much. We go to south east asia, vietnam, cambodia, Laos, Malasisia. Hotels are $10 a night and meals are $2.

What I’m trying to say is, you can have all you currently want (or at least more and maybe most) and save a lot, if you make some changes to how you look at “necessities” and “dreams”.

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avatar 17 Luke Landes

I definitely agree that the choice is not “black and white” or all-or-nothing. We have to find that right balance that works for us, but I get concerned when I see suggestions that tip that balance too far to one way or the other.

Your vacation sounds like an excellent way to enjoy life without a huge expenditure.

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avatar 18 Anonymous

Very true, it seems that many people resort to living too cautiously and investing and saving so much that it is almost hoarding and in turn are never able to give to charitable causes who really need the money or go places and do things that they have always wanted to. Of course, the majority of people are exactly the opposite in that they do not save even the bare minimum of what they should but nonetheless there is still a fine line to walk.

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avatar 19 Anonymous

Yes – but who says that “the purpose of saving is to do something with the money” – that is certainly the case for me, and apparently for you, but other people may have different motivations for saving. Perhaps security is their number one goal and they would like to make sure that they never lack for anything? Perhaps they want to leave a big pile of cash to their heirs? To each his own.

Personally, I believe in moderation in everything.

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avatar 20 Anonymous

The People Next Door

It seems easy to understand why the people next door drive a car that must be 14 years old, dress quite plainly and don’t much if anything on landscaping. He is a sell-employed carpenter and she is an assistant in a doctor’s office. Neither has a college education. But, each of their three children went to an Ivy League undergraduate college and then on to an Ivy League business, medical and law school. One of the children mentioned to you how grateful they were to have left school without a cent of debt. When you’ve spoken with either of the parents over the years, they’ve never complained about their children’s educational expenses or indeed about anything to do with money. How can this be? Their combined incomes can’t be over $100,000, yet it seems they may have paid over a half million dollars in educational expense for their children. Your annual household income is $250,000 but you live paycheck to paycheck.

The main difference between you and your neighbors is that they are sitting on a stock portfolio worth $4 million, throwing off more than $120,000 per year in dividend income. You couldn’t raise $10,000 if you had a month to do it. How in God’s name did this come to be? Neither of the neighbors inherited anything.

Here’s what happened. In the early 1970’s, when your neighbors and you were in the early 20’s, they realized they would probably not make great incomes so they decided to live beneath their means, utterly to ignore advertising, to buy used cars, stay out of bar rooms, restaurants and malls, and to invest what little they could spare in the stocks of companies that sold things to other people, such as you.

They bought shares in what was then Philip Morris, and of Johnson & Johnson, Colgate Palmolive, Procter & Gamble, GE, Wal-Mart, Coca Cola, William Wrigley, and Abbott Laboratories. They got into Microsoft in the late 1980’s at 10 cents per share. They had the broker deliver the shares to them so that they could reinvest the dividends and buy more shares without paying brokerage commissions. Over a period of some 35 years, your neighbors invested maybe $200,000 of their own savings plus all the dividend income. While you were going through your considerable income buying new cars, running up big credit card balances shopping at Burberry’s, Barney’s and Brooks Brothers, Neiman Marcus, and Bloomindales, eating out 5 times a week, ordering drinks made with premium priced liquor and leaving money on the tables of Indian-run casinos, your neighbors were reserving against their future obligations and for a time when they might not want or indeed be able to work. While you were unable to separate your wants from your needs, your less well educated neighbors had no trouble doing that for themselves. The result is that capitalism turned your income into your neighbors’ principal. One not so small consequence was that their children could apply to Stanford, Princeton and the University of Chicago without requesting a cent of financial aid. If you don’t think that sways the minds of top college admission committee members, think again.

Now, your neighbors love their jobs, in large part because they know they don’t need them and could cease working on any given day. You and your spouse hate your jobs because you know you have to keep them and maybe to work until you are 70 or older. You might want to continue to be most cordial to your neighbors’ children. When you end up looking for a job, one of them might give you a reference.

Oh, wait…you suddenly awaken from the horror of this wretched scenario and discover it was but a dream and a nightmare at that. You are still only 28 and what has been written above is but one possible outcome. Fortune has favored you and given you a second chance. If you are comfortable with the future outlined above, keep doing what you’re doing and you’ll get it. Keep spending all your income on consumer junk and trying to live as if you were a person with money and be sure to plan to work for a high school kid when you are 70, maybe parking cars.

If, on the other hand, you want to be able to live more or less without financial worry, curb your spending now and begin investing. Sure, driving a flashy car, having $50 lunches and $100 dinners, drinking martinis made with Grey Goose vodka and buying $500 Jimmy Chu shoes seems stunningly enjoyable now, but, I assure you, it won’t come up to having $4 million when you are 60.

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avatar 21 Anonymous

I didn’t like this article, I felt like there was disparaging tone towards people that save for the future. I don’t want to spend all my money now only to eat cat food as a senior. I’m a woman, we live longer than men, we have to think of the future. I’m not a spendthrift, but I’m not miss cheap either.

So what if most people don’t save 10%, does that mean that smart people shouldn’t save 10%, or what about the couple who dream of early retirement and save more than 10% towards their dream. Enjoy the journey but think of your future as a senior.

Its not fun to be poor as an older man or older woman. I don’t want to be one of those WalMart greeters, no thanks, that’s not for me. Its one thing to be broke in your 20s, but its quite another to be broke in your 80s.

I don’t believe in deprivation but I know how much is “enough” for me. I don’t need Christian Louboutin shoes because I find high heels really hurt my feet, I don’t wear high heels anymore, but I can’t wear cheap $20 shoes either, they hurt. If I need to shop, I shop for midrange items. I know you were trying to have a balanced article but honestly it seems like you were judgmental of those who saved more than 10% of their income.

I don’t think people are as deprived as you seem to think they are. Maybe some have found their “enoughness” in life. What’s wrong with that? Maybe the people who save more than 10%, had had their fun being spendthrifts and after awhile realized that all that stuff they spent, wasn’t fun in the end, maybe they wanted to save for the future now and not be foolish.

Maybe they found the number of items they wanted in their life and that it was enough for them. Maybe they decided hey I don’t need to go to that Mexico resort each weekend, I can take 5 trips in a year from now on. Or maybe they go in a field that allows them to travel and achieve their goals another way.

Human nature being what it is, humans can’t go long with self-denial, we tried that in the middle ages and it didn’t work. Most of us try to find a happy balance. Its like when a person goes on a diet, if they go too long without sugar and sweets they cave in and forget their diet. The successful person that loses weight, eats healthy but allows themselves a treat or two each week or rewards themselves another way at the end of the month or at the end of the week.

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avatar 22 Anonymous

You say you don’t like the article, yet you offer such a great comment I think you meant to say it got your interest, but you disagree.
For what it’s worth, I’m with you. Given the market volatility, it seems to me that even if you save twice your expected need, a bad turn can put you back at just getting by.
On the other hand, I can understand that saving so much for the future that you don’t enjoy the present can be a bad thing as well.

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avatar 23 Anonymous

yep none of us will know what the future will bring, I think most people do their best

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avatar 24 Anonymous

IT’s possible, but i’m having a hell of a fun time saving money! I’m sure not to be a miser, and that’s why I live in the house I do, a vacation property in Tahoe which is a bad financial move, and am a member of my racket club… but other than that, it’s about the fun of saving lots and lots of money.

The first goal is $100,000, then $250,000, then $500,000, then $1,000,000, then more. It’s just really fun, and I encourage everybody to shoot for these milestones! You’ll experience a world of freedom you never new existed, and will become more daring!

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avatar 25 Anonymous

Since there is no way to know how long I’ll live or what the quality of that life (healthwise) will be as I approach the end, the best way to plan for it is to save as much as possible while I can and maybe have that much less to worry about toward the end. There’s not much point in living to be 100 if your last 20 years are spent eating Alpo and living in a house that says “Whirlpool” on its side. I have no family or the expenses that go with one, and therefore have no one to catch me if I fall. It’s just me and Bubba the cat. I save 80% of every paycheck. I got a late start because I was busy being 10 feet tall and bullet proof and never considered that I’d be anything but a young and virile guy (just like all young ones do.) Now, I realize everytime I get out of bed that I was seriously mistaken and must make up for lost ground while I can. I keep the scarey spectre of homelessness in my mind to motivate me to never be in that position, and I “practice” being destitute so that there will be no surprise in it if it comes to that. It also frees up much more of my funds to put into savings. I have no debts and carry no credit balances. I use a mastercard that pays me a cash rebate every six months and put everything I can on it. If my health holds and I don’t lose my job, at the current rate of saving and truly miserable return I get on it, by the time I reach my social security full retirement age in 8 more years, I’ll be pulling in monthly interest roughly equal to the size if my social security check without touching the principal. I have a small traditional IRA that will carry me for maybe two years. I also have a modest 401(k) plan at work that, assuming some slick weasel in a suit doesn’t manage to steal it before then, will carry me for 5 or 6 years. Hopefully, the combination of funding sources will also allow for the health problems that will likely develop. If I wind up in a long term care facility, I’m hoping that the principal in my savings accounts will carry the burden for that until I exit stage left. My life might seem a little grim to most people but to me it’s a trophy. I know what true grim looks and feels like. I spent a year in Vietnam learning what being at the bottom is really like, so what I have now is not bad at all. I’m not hungry, or wet, or cold, or hot or miserable. If I can maintain that until the end, I will consider my efforts as successful. Semper fi and save your money!

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avatar 26 Anonymous


Thanks for posting! There is so much truth in what you have written. One does not need things to be happy, one just has to decide to be happy, in order to be happy. Continue being happy while practicing being destitute.

Thank you for your service.

David M

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avatar 27 Anonymous

A wise man should have money in his head, but not in his heart.
-Jonathon Swift

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avatar 28 sierradawn

I don’t think that’s possible at all

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avatar 29 Cruxman

I will save now and latter. That’s it.

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avatar 30 Anonymous

I’ve read several writings on this topic (about saving too much) and found them to be overly laced in financial analysis. But I found your article to be more insightful for tackling it from a broader perspective. It brings a philosophical view that goes beyond the monetary; I thought it was quite inspirational. It reads like a page out of Walden and makes one think about issues other than dollars. – great advice, thank you!

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avatar 31 Luke Landes

Thanks, Evan! It will certainly be difficult to live up to that comparison. I appreciate the kind words.

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avatar 32 Anonymous

I’d say it is possible to save too much in a couple of senses, but that shouldn’t discourage most folks from saving more than they currently are.

First, saving too much in one type of investment vehicle is potentially problematic; e.g., if you save 100% of your money in a 401k or Traditional IRA, you may find yourself wishing to early retire before 59.5, but you cannot because of the legal and practical limitations on how you can access this money.

Second, saving too much in one type of investment vehicle could result in higher-than-expected taxes when you retire. For example, 401ks are tax deferred – not tax free. If you max out a 401k your entire career (more so if you’re married), you will possibly end up with a large sum of money. When withdrawing this money during retirement, expecially in an effort to avoid RMDs, you may in fact bump up to a tax bracket equal to or even higher than your working tax bracket. If you still have a substantial sum of money in your 401k at age 70.5 (RMD), then this tax burden may be very high. When social security and pension [if you have one] also count as taxable income, you may find that you’re heavily taxed on all of these sources of retirement income. That bothers me. I worked a whole career for my retirement, I hate to think of 15% – 30% of my money going back to the Washington spendthrifts.

Finally, one test of how much I’m saving is to think about how my children will react when I retire. Will they be happy for me, or will they think that too often I chose retirement over time, experiences, and material pleasures with them? As a result, we are very frugal and save a lot, but the kids do things like play rec and travel soccer (very expensive) and we eat well because my wife is a good cook and buys high-quality food for them.

Now, on the flip side, love and time are [relatively] inexpensive, and you can be thrifty, save a lot, and still have a happy family and hand down practical, frugal values to your children. I’d say that most folks are at greater risk of creating rotten, spoiled, materialistic kids than you are of over saving (of course, kids like that usually come from parents like that). I think of my own parents who were very frugal. We never wanted for food or clothes, but we didn’t do many vacations or buy fancy cars or other things. I certainly never felt deprived though.

So save more, diversify-diversify-diversify, and give time and attention to your family.

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