Jan
2013
Saving for Retirement Early: I “Get” It Now!
Living the Good Life in Retirement
It’s a given that most people know you’re “suppose” to start saving for retirement early. The ambiguous part is how “early”?
If you have read my first post, it was obvious that I used to be in financial denial about my debt, choosing to believe it would all be paid off “one day” as long as I was making minimum payments towards it every month. I couldn’t face the reality of my current money (or lack of) situation, never mind plan for the future and save for retirement!
Even after I had my moment of realization a few months back and determined that I needed to be proactive in order to pay off my debt as soon as possible, saving for retirement was not a top priority. I was more concerned with the present and the rapidly accumulating interest on my credit cards. Not to mention that darn massive student loan!
To be honest, because my debt load is still so heavy, saving for retirement is still not a top priority of mine but after spending time with J and his well-off retired parents in Mexico, I had a “ah-ha light bulb moment”…..
I want to live the good life in retirement too! I want to travel the world and spend endless days in the sun experiencing different cultures and meeting new people. I want to see the world’s historic architecture and have dinner in the biggest cities. I want it all!
In order to have it all, I have to start saving for retirement NOW (despite the debt).
So I opened a Tax Free Savings Account (TFSA) with a $100 contribution to use as my “start-up” retirement savings account and every month $25 from my daily account will be automatically deducted and transferred into the TFSA. Compared to other people, (especially personal finance bloggers 
) this amount is peanuts; but right now it is the amount that I can afford while I attack the debt load which is better than not saving at all. Another option I was considering was opening up a certificate of deposit and banking over the internet to earn high interest yields
In a few years, when that ball and chain debt is paid off, I will aggressively contribute to my TFSA and hopefully max it out but until then, I will continue living my newly adopted frugal lifestyle and daydream about living the good life in retirement.
Did you have an “ah-ha light bulb moment” when it came to realizing the importance of saving for retirement early?
Morgaine
January 21, 2013 at 10:15 am (119 days ago)Good for you, starting to save. Definitely don’t get discouraged by the amounts other people are saving. Remember that there’s lots of other people who don’t save anything and aren’t trying to become debt free. Once you are debt free you’ll have lots of time to make up for missed contributions. Keep up the good work
Morgaine recently posted..Weekly Spending: Jan 14-20
Girl Meets Debt
January 21, 2013 at 10:55 am (119 days ago)Thank you for the kind words of encouragement Morgaine
Sarah
January 21, 2013 at 8:23 pm (118 days ago)Funny how I was just thinking of this! Since I set up my ‘super’ (our contribution to our retirement fund – our employer does a %), I added $50 more per week (that’s my pay frequency). I don’t miss it, since I’ve done it since I started ‘grown up’ work 4 years ago. I reassure myself that those years I might take off to have kids will be helped by starting early and regularly saving and compound interest in these early years. I only think ‘let’s hope I live til retirement’ every now and then!!
Girl Meets Debt
January 21, 2013 at 8:55 pm (118 days ago)I wish my employer contributed a % to my retirement fund!!! Good for you for starting to save while young
Laurie @the frugal farmer
January 24, 2013 at 6:08 am (116 days ago)Wise decision, Girl! The thing I always think about is that the amount of compound interest we lose by starting later is a huge amount of money, so start now!
Laurie @the frugal farmer recently posted..Motivation: Learning From Others
Girl Meets Debt
January 24, 2013 at 9:13 am (116 days ago)Thanks for commenting Laurie! I won’t be making much compound interest on my measly $100 contribution but I just feel so much better knowing that I am starting now
Laurie @the frugal farmer
January 24, 2013 at 9:57 am (116 days ago)You’d be surprised how much you’ll actually make, even on $100, over time. Find an online calc and put in the numbers. But either way, it’s better than zero.
Laurie @the frugal farmer recently posted..Motivation: Learning From Others
alwayshungry4
January 24, 2013 at 8:34 pm (115 days ago)I definitely think seeing people in their 60′s and 70′s still working because they have to over wanting to is an “a-ha” moment. Conversely, a coworker who retired around 55 and is now traveling all over the world is an excellent motivator!
alwayshungry4 recently posted..San Francisco Nike Women’s Half-Marathon
Girl Meets Debt
January 24, 2013 at 9:20 pm (115 days ago)Young, retired, and world traveler is what I want to be when I “grow up”
K.K. @ Living Debt Free Rocks
January 25, 2013 at 6:06 am (115 days ago)You’re doing well by saving some money even while you’re working to pay off your debt. Getting into the habit of putting aside money regularly even if it’s a small amount at this stage will pay dividends down the road.
K.K. @ Living Debt Free Rocks recently posted..What Is Your Debt Holding You Back From Doing?
Girl Meets Debt
January 25, 2013 at 9:07 am (115 days ago)“Pay dividends down the road” spoken like a true PF blogger who knows her stuff
debtperception
January 26, 2013 at 3:38 pm (113 days ago)Sadly, I always pictured myself working until the day I die. With 22 years left on my 25 year repayment plans for my student loans I never expected to be able to save for retirement. I want to pay off my private loans that have a co-signer as quickly as possible and that means 100% of any income I make going towards those debts. Once those are paid off, I’ll start saving for retirement. The goal is to have them paid off in 3 years…30ish is not too late to start saving for retirement, right?
debtperception recently posted..Desperate Measures
pauline
January 26, 2013 at 6:18 pm (113 days ago)Congratulations on getting started. There is no amount too small, check out an online calculator to see how much you would get in 40 years, that will help you keep motivated!
pauline recently posted..Friday recap, the city life and a root canal
Girl Meets Debt
January 26, 2013 at 6:36 pm (113 days ago)Thanks for commenting Pauline. I don’t think I need an online calculator to stay motivated. Looking at pretty pictures of exotic places around the world I want to see is enough incentive for this girl
Mochi and Macarons
January 28, 2013 at 6:05 pm (111 days ago)If you have credit card debt, and it is costing more than how much you earn in your TFSA, you are better off putting your savings into your credit card debt instead.
E.g. 15% CC debt interest rate, and your TFSA is with Ally for 1.8% interest.
You are losing about 13.2% in interest fees each month (dropping your net worth) if you save for retirement now, when you’re in CC debt.
Mochi and Macarons recently posted..Save like a developing country: Global savings rates around the world
My Financial Independence Journey
January 28, 2013 at 6:27 pm (111 days ago)Congratulations on realizing the importance of saving for retirement. You’re now just one mental step away from transitioning from saving for retirement early to saving for early retirement.
Best of luck to you in building up your nest egg.
My Financial Independence Journey recently posted..Cardinal Health (CAH) Dividend Stock Analysis
Girl Meets Debt
January 28, 2013 at 6:47 pm (111 days ago)Ooohhh I like that!!! “One mental step away from transitioning from saving for retirement early to saving for early retirement.” Very well put
John @ Fearless Men
January 29, 2013 at 9:53 am (111 days ago)Glad to hear you’re saving while also responsibly paying off that debt. Impressive! I had a similar “aha” moment…although it was 8 years ago. I wasn’t saving a dime for retirement and then I started learning about investing and compounding interest. I’m very thankful I started saving right away and letting my monthly contributions do the work over time.
John @ Fearless Men recently posted..Wise Quotes for Fearless Men | Volume XV
Girl Meets Debt
January 29, 2013 at 10:12 am (111 days ago)Thanks for commenting John
I’m envious you had your “aha” moment 8 years ago and for myself I guess the cliche goes that it’s better late than never…