5 Reasons To Ditch The 'All Or Nothing' Retirement Savings Approach

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When it comes to retirement planning, some people advocate an all-or-nothing approach. They feel that the best way to prepare for your golden years is to be laser-focused on retirement savings now — to the exclusion of other things. Should you adopt this attitude? While it works for some, others find that a more balanced approach is better. Why? Here are a few reasons to find your balance.

1. It's a Marathon, Not a Sprint

Young people face decades of life and career development before they tap retirement funds. While you may be able to — or want to — maintain tunnel vision on your retirement goal for a while, it's unlikely you can do it forever. The good news is that you don't have to. Like a marathon runner plans out their route to save energy, face difficult stages, and make it to the end, you can craft a viable long-term plan. 

2. You Need Other Goals too

Very, very few Americans only have one goal they must fulfill. You must plan for the present as well as the future. This means preparing for financial goals like emergency funds, sinking funds, home purchases, marriage and family, vacations, and education. Putting off or failing to prepare for these needs puts you at an even higher risk of financial failure or damaged mental health. 

3. It Can Be Discouraging

The all-or-nothing approach usually means making significant sacrifices to achieve the goal. But sacrificing too much can backfire and cause more financial problems. You may begin to feel left out, depressed, bored, or overworked. If you take a more balanced approach to both sacrifices and financial goals, you'll likely be able to keep it up longer with fewer side effects. 

4. Early Investing Reduces Pressure

If you start planning and saving for retirement early in your career, you can achieve more savings with fewer contributions. The power of compound interest and time for investments to build up takes off the pressure from savers. Working smarter, not harder is a much more manageable approach than sacrificing everything even for a while. 

5. Retirement Plans Change

Retirement is actually a more fluid thing than most people think. Your vision of retirement — including where, when, and how you want to retire — will change over time. So if you put all your energy into preparing for one type of retirement (such as early retirement) but you change tacks later, you could have sacrificed for the wrong things. Balanced planning promotes a flexible attitude.

Where to Start

Are you already trying to take the all-or-nothing approach? Has it failed for you? Are you unsure where to start? Begin by meeting with a retirement planner. With their guidance, you'll find the right balance to have a healthy, happy present and future.