Living for the Moment vs Living for Life

Several years ago I was out with a group of friends, I recall one person making the comment that saving for retirement was a joke. “Why invest my money with the bank and let them get rich, when I can enjoy it now!” I can understand my friends sentiment, he wanted to enjoy his money. He’d worked hard for it and was looking for an immediate pay off. He enjoyed living the good life and taking vacations whenever it pleased him. Unfortunately, his viewpoint was terribly short sighted.

An article from the Globe and Mail by Andrew Allentuck entitled Couple Divided: Cut Debt or Live for Today illustrates this point perfectly. The article looks at a couples current situation and then disects it by analyzing what they would have if they reduced debt.

In working with clients and chatting with colleagues I hear far too many times that people aren’t saving for tomorrow. When I review client portfolio’s I see many people are laden with debt. These are good people who have just made a few bad choices. They wanted to live a good life, they wanted to enjoy what was made available to them. Unfortuately, they’ve done so at a great cost.

The average individual who retires around age 60 will live in retirement for 20 to 30 more years. That is almost as long as their working career. If these people aren’t saving for their own retirement where do they plan to obtain this money? The governement? Their children? Their home?

While these options may work for a time they will all fall short of expectations. What will happen to the lifestyle that these individuals have become accustomed?

The unfortunate truth is the vast majority who are not reducing debt and living for the moment will end up beginning retirement in debt. As income dries up they will either be forced to work longer or drastically reduce their lifestyle. The dream will be over.

You can live rich for now or you can live rich for life. The choice is yours, the sooner you make it the better off you’ll be.