Is It Possible to Save Too Much for Retirement?

As you head into retirement, the most important decision to make is how much money to save.  You want to make sure that the amount is enough for how you'd like to spend your later years, without needing to worry so much about financial concerns.

But is there a limit as to how much you should be saving?  Can you save too much money for your retirement?  It's an interesting question, and one that can't be answered too quickly.  You'll ultimately need to decide for yourself, but here are a few factors to consider:

Factor #1:  You might have a tendency to put off until tomorrow what you could be doing today.

Life is short and if you don't take the time to enjoy it once in a while, it will be over before you know it, and all you'll be able to do is look back and wish you had done something different.  This means that if all you're doing is sticking a huge majority of your money into retirement, you could miss out on all the great things life has to offer.  Yes, you should be frugal and smart much of the time, but treating yourself to a nice trip or a new car every once in a while can do a lot to help you realize why you're saving in the first place.

Factor #2:  Each person desires a different lifestyle when they retire.

No two people are exactly alike.  Some will want to spend their retirement on the beaches of Cancun.  Others will prefer the leisurely days spent at a golf course in Florida.  Whether you choose one of these, or something entirely different, your intended lifestyle will partially determine how much you need to save.  And although some people may think that you're saving too much money, it really depends on your individual needs and how luxurious you want your retirement to be.

Factor #3:  At some point, your pace will probably slow down.

This is more relevant to the younger generation.  When you're young, you can save quite a bit if you're careful with your money, because your expenses will probably be a lot less than when you get older.  Years later, you'll probably need to worry about having a family, buying a house, and other such expenses.  So although you should try to enjoy life before having all of those responsibilities, if you save as much as you can when you're younger, you won't feel so much of a financial burden once you're older.

Factor #4:  You could leave yourself open to lawsuits or similar actions if you save too much.

Granted, this would only be true under very specific circumstances, but it has been known to happen.  Basically, you have two inidivduals with similar salaries and mortgage amounts.  The first person saves a large amouont of his salary, while the second person spends nearly every penny.  Due to falling house prices, the value of their homes are incredibly low, and both decide to walk away.  When the bank sees that the second individual has little in savings, they write off the loan, because going after him would be a waste of resources.  But since the second person has more than enough in savings to cover the loss, they decide to sue him for the difference.  Again, this is a rare scenario, but something similar could happen under the right circumstances.  Try not to get yourself into this kind of situation, especially if your savings are high.

To get a second opinion on your retirement plans, schedule your free, no-obligation appointment.

Source: http://firstsecurityfinancialshow.com/blog/bid/128210/Is-It-Possible-to-Save-Too-Much-for-Retirement

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