Young adult focusing too much on retirement saving?
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Anonymous
| I know this probably doesn't sound like much of a problem -- and, admittedly, it might be less of a problem and more of a concern -- and not even a big one. But, all that said, our oldest DC, one year out of law school and in a federal court clerkship, seems kind of obsessed with retirement saving. He is not married, doesn't have kids, and doesn't have a mortgage, so he has a pretty decent amount of disposable income. It's great that he's gotten into a saving mindset, but I wonder if the focus on retirement is too narrow. (And, no, this isn't about us -- parents -- I'm retired and DH is pretty much done as well, and we're in good shape financially -- thanks, I must admit, to DH's focus on -- wait for it -- saving.) |
Anonymous
| He’s being smart. Plus, as a federal clerk, he’s probably too busy to spend $$. |
Anonymous
| This is fabulous. Why would it worry you in the least? Is he unable to pay his daily bills because too much savings? |
Anonymous
| If he’s just starting now, post law school, he’s already missed some crucial years. |
Anonymous
He was supposed to save during law school? What an idiotic position. |
Anonymous
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I finally started marking money so that I was able to save for retirement at age 27. I felt as if I was so far behind and was really focused at paying off loans and making 401K.
I came from a family that did not have a lot of financial flexibility. For example - I lost my softball glove when I was in 5th grade and needed to wait for Christmas to get it replaced. I was left handed - so it was not like I could borrow a team mates. In my early 30s I had paid of all my student loans, had been able to max out 401K and had saved enough so that I had 100K for a down payment for a house. I needed a financial advisor to do the #s and help me see the big picture. That it was OK to spend on the higher gym membership that I had the financial flexibility to do more of the social things I wanted to. I am not sure what is driving it in your case - but if you are concerned - maybe a gift of recommending a financial advisor is something that would help. |
Anonymous
| What do you think he should be doing with his money? If you have some concerns about areas where he seems to be too frugal (not replacing a dangerous car, not joining friends on a trip that he has vacation time for, not dressing appropriately), you can always gently encourage him to spend a little more. But if he is happy and frugal, that's great. |
Anonymous
OP, he's smart. When I graduated law school into biglaw, I was making and spent, a ton. Did not utilize my tax deferred options, much less any additional savings. 25 years later, I'm in fine shape, but I once looked at what my balance would be if I'd just maxed out the years 1997-2001. I stopped halfway through, it was just too depressing. Money he invests now will pay huge dividends later. |
Anonymous
| As long as he has an emergency fund that is easily accessible, what is the problem? |
Anonymous
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This is none of your business.
Sheesh, DCUM parents of young adults are just relentless. You know your kids can feel it right? That you're constantly judging and scrutinizing every little thing they do? Just let them be! |
Anonymous
+1 he may find that things will change when/if he gets married and has kids, but I'm not seeing the issue with focusing on long term retirement goals right now. More young people should do this. |
Anonymous
| So he isn't making much money in a clerkship so you should be happy he is saving! When other costs kick in (mortgage, kids, college savings, etc) he may have to put a lower percentage of his pay towards retirement. |
Anonymous
+1 As long as he's also got a decent emergency fund, and he's not depriving himself totally, saving now is smart because it can get harder to save later. |
Anonymous
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This reminds me of an Atlantic piece I just read - basically it says that the self-help finance books emphasize creating good financial habits, including having a standard savings rate from the very beginning. However, the economists are more "rational" and think people should take into account things like their income probably rising as time goes on, and that one should still try to create an enjoyable life in the present. The author says the first group takes into account human nature but that it's good to listen to the economists, too. Or something like that!
https://www.theatlantic.com/ideas/archive/2022/09/personal-finance-books-wrong/671298/ |
Anonymous
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Saving is not a concern at all IMO. He's got a busy job and wants to save up capital. Front-loading it now for retirement is smart to use the time value of compounding. It's also often a way of coping for people with stressful jobs--if they put in a bunch rather than spending it, there's more the possibility of an escape valve from their work. If he were to spend a lot, he could end up with golden handcuffs so to speak--having to keep up a stressful job because he needs the money.
But maybe you're feeling a concern that he's avoidant or not living in the moment enough. This really doesn't have anything to do with money, but you might be flagging the retirement savings as a symptom of this other thing. If that's the case, then ask him about what he's doing for fun and talk about what you're doing that you enjoy rather than work/money. It's his life of course, but asking about fun sometimes reminds people who tend to be serious and plan for the future to also remember to have fun in the moment. But also question your own motives--is this a 'you're not on track to give me grandkids' kind of concern? If so, then just keep it to yourself. |