Young adult focusing too much on retirement saving?

[Anonymous]

I don't understand what the issue is. Are you actually upset your DS is saving for retirement?

[Anonymous]

Anonymous wrote:

Anonymous wrote:If he’s just starting now, post law school, he’s already missed some crucial years.

He was supposed to save during law school? What an idiotic position.

It's not that he was supposed to save during law school, it's that he's behind where he would be but for attending law school. He did miss some crucial years. He has time to make it up, and obviously won't be hurting if he eventually lands at a white shoe firm, but starting to save at 22 is a huge advantage relative to starting to save at 27. It's just basic math.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If he’s just starting now, post law school, he’s already missed some crucial years.

He was supposed to save during law school? What an idiotic position.

It's not that he was supposed to save during law school, it's that he's behind where he would be but for attending law school. He did miss some crucial years. He has time to make it up, and obviously won't be hurting if he eventually lands at a white shoe firm, but starting to save at 22 is a huge advantage relative to starting to save at 27. It's just basic math.

I'm going to bet that the kid who got a federal clerkship out of law school is going to end up better off than the kid making maxing out his 401k for years 22-26.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If he’s just starting now, post law school, he’s already missed some crucial years.

He was supposed to save during law school? What an idiotic position.

It's not that he was supposed to save during law school, it's that he's behind where he would be but for attending law school. He did miss some crucial years. He has time to make it up, and obviously won't be hurting if he eventually lands at a white shoe firm, but starting to save at 22 is a huge advantage relative to starting to save at 27. It's just basic math.

I'm going to bet that the kid who got a federal clerkship out of law school is going to end up better off than the kid making maxing out his 401k for years 22-26.

Maybe! But also maybe not if he took out substantial loans to pay for law school and pursues a career path that is not particularly lucrative. The calculus is complicated, and, in any event, neither here nor there. My response to the PP who wanted to condescend about saving during law school being idiotic is to clarify the other PP's point that the son has indeed missed some crucial years, which may provide context to the OP for his savings decisions.

[Anonymous]

I'll weigh in on the other side of this. I've always been an avid saver and while I'm not advocating profligate spending I missed out on some once in a lifetime opportunities by being a big saver. You can't go back and do study abroad, could have done more trips with friends or back then g/f. Now, I've got way more money than I need and it's too late to replicate some of those experiences and memories I gave up. All of that is to say that balance is important and I would emphasize that to him

[Anonymous]

Your gut is telling you something. Read about OCPD and see if that’s a fit. In that situation, saving is maladaptive. There will not be an outer limit.

[Anonymous]

Anonymous wrote:

Anonymous wrote:If he’s just starting now, post law school, he’s already missed some crucial years.

He was supposed to save during law school? What an idiotic position.

Reading comprehension is your friend.

[Anonymous]

Anonymous wrote:I'll weigh in on the other side of this. I've always been an avid saver and while I'm not advocating profligate spending I missed out on some once in a lifetime opportunities by being a big saver. You can't go back and do study abroad, could have done more trips with friends or back then g/f. Now, I've got way more money than I need and it's too late to replicate some of those experiences and memories I gave up. All of that is to say that balance is important and I would emphasize that to him

I agree that you need to save/spend money wisely to reflect your time of life. So, yes, the time value of compounding makes saving early beneficial but not at the expense of forgoing experiences that shape who you are as a person. For my own kids, I suggested that they max out Roth IRAs from their hs jobs since we were paying for their lives anyway and all they would do with their money is piss it away on crap. I also thought it would build in them that basic notion that you have to think about the future and see how investments build.

But then I also encouraged them to loosen up a little in college and in their 20s when money is likely more tight and spending money to cement friendships and have important experiences (e.g., going to friends' weddings, travelling, moving to new places. learning skills etc.) has more lifelong value. I kind of billed it as at this age you're investing in the kind of person you're going to be and so you have to weigh the amount you invest in money vs. invest in your life/self. I'm not sure how much my advice impacted it, but they seem to keep a good balance.

[Anonymous]

What's the problem???? My 18 year old put his summer job money into a Roth IRA because he had Financial Literacy last year and saw how important it is to start at 20, not 30.

[Anonymous]

Anonymous wrote:

Anonymous wrote:If he’s just starting now, post law school, he’s already missed some crucial years.

He was supposed to save during law school? What an idiotic position.

All the DCUM "if you only just...." judgments seem to start with the assumption that everyone gets a salaried job at 21, and it's close to their parents house so they can max out retirement and save for a down payment on a condo to get on the property ladder by 24. Later starts to a career or not growing up in an area with good employment options are strategic errors that will derail you for life.

[Anonymous]

Anonymous wrote: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!

+1. What an odd thread. The kid went to law school and did well enough to land a great clerkship. Clearly doesn’t need mommy anymore. Jesus.

[Anonymous]

Anonymous wrote:I'll weigh in on the other side of this. I've always been an avid saver and while I'm not advocating profligate spending I missed out on some once in a lifetime opportunities by being a big saver. You can't go back and do study abroad, could have done more trips with friends or back then g/f. Now, I've got way more money than I need and it's too late to replicate some of those experiences and memories I gave up. All of that is to say that balance is important and I would emphasize that to him

+1

Research shows that people who save tend to oversave. In hindsight, I regret turning down some of my friends' weddings because I "couldn't afford" to go, even though I could have if I were less agressive on my savings goals, and I regret that I didn't travel more pre-kid (esp. now that my kid has a number of disabilities and simply will never be able to travel easily). There are some things that, if he's missing out on now, can't come back.

(Also, at your son's age, locking his money away in retirement savings may not be the best vehicle. We bought our house two years after graduating from law school and most of our savings were locked up in retirement accounts. We had to borrow money for a down payment even though we could have had more cash on hand had we not put everything possible into our retirement accounts. And also, given that we spend a relatively small percentage of our income, it's very obvious that we don't actually have to save enough for retirement to replace our income. I think that, for people who tend to oversave, they should use retirement benchmarks that are based on their spending rather than their income. I doubt we're going to retire and suddenly become spendthrifts. So really, we could have diverted some of our retirement savings into down payment savings, and spent some of our housing money on my friend's wedding in puerto rico. It would have been fine.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I'll weigh in on the other side of this. I've always been an avid saver and while I'm not advocating profligate spending I missed out on some once in a lifetime opportunities by being a big saver. You can't go back and do study abroad, could have done more trips with friends or back then g/f. Now, I've got way more money than I need and it's too late to replicate some of those experiences and memories I gave up. All of that is to say that balance is important and I would emphasize that to him

+1

Research shows that people who save tend to oversave. In hindsight, I regret turning down some of my friends' weddings because I "couldn't afford" to go, even though I could have if I were less agressive on my savings goals, and I regret that I didn't travel more pre-kid (esp. now that my kid has a number of disabilities and simply will never be able to travel easily). There are some things that, if he's missing out on now, can't come back.

(Also, at your son's age, locking his money away in retirement savings may not be the best vehicle. We bought our house two years after graduating from law school and most of our savings were locked up in retirement accounts. We had to borrow money for a down payment even though we could have had more cash on hand had we not put everything possible into our retirement accounts. And also, given that we spend a relatively small percentage of our income, it's very obvious that we don't actually have to save enough for retirement to replace our income. I think that, for people who tend to oversave, they should use retirement benchmarks that are based on their spending rather than their income. I doubt we're going to retire and suddenly become spendthrifts. So really, we could have diverted some of our retirement savings into down payment savings, and spent some of our housing money on my friend's wedding in puerto rico. It would have been fine.

🧐

[Anonymous]

That’s what I did too and by 40 I had enough to take years off of work to try something new.

[Anonymous]

Anonymous wrote: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.

This.