There is definitely an age when money makes a HUGE difference, and it’s the place you get to when you really can’t work anymore. It depends a lot on your health and what kind of job you have (I used to work with a nearly octogenarian graphic designer, but a 70 year old worker who has to be on their feet all day or lift heavy things is going to be in a world of pain.)

There are a lot of elderly people struggling without in-home help, or stuck in really awful nursing homes, or dependent on children or grandchildren who have no respect for their dignity. Those are money questions.

True, you need a certain amount of money to be happy, but that’s true at any age. But maybe more than that you’ll need HEALTH, purpose and involvement, faith and the company of people who love and respect you.

Money might enhance each of those somewhat, but it won’t buy you any of them.

I think we often focus too narrowly on money when discussions turn to aging.

I’m anticipating needing to retire in my late 60s. Based on the lifespan of my eldest ancester that would see me with about 20 years of retirement. Probably not in the greatest of health. Sounds ok, but I’ll need to budget for my travelling throughout, rather than save it up for the end.

The third year I decided to put my raise in. Did that for the next 5 years or so and went in to put newest raise in. Was told I couldn’t. They said I could only put in $11 of my raise, as I had reached the maximum allowed – 25% of my gross mo. income. I was absolutely shocked. I had never saved well and couldn’t believe this was true. But it was. I only have about 1/15 of the minimum they say you need to have for retirement, but I only withdraw the minimum once a year to fix my home, car, etc. I have withdrawn $14+k in the last 4 years and my balance in only down $4k. The benefit of interest.

I am now trying to earn some money by doing a little volunteer work – driving a lady to her doctor 3-4 times a month. They are willing to pay well, but I will only accept a smaller sum for the actual driving time. It will be more than enough to make up for the raises in Medicare in the next 2 years.

I never thought of extended care and now it is too late. I am 72 and the cost would probably be prohibitive. Guess I’ll have to cut down on my goal of living to 123. Oh well.

Oh – and I live in a very small town and will not look for regular work because I am financially ok at the moment and would feel guilty to take work from those who really need it badly.

I completely agree with you, thanks for posting your comment. I’m 32, and I doubt my 25-year-old self would recognise me, and certainly not my 20-year-old self. My ethics, tastes, and values have all changed hugely in that time. The idea that I can second-guess what my 65-year-old self will value is almost laughable. The best I can do for that guy is make sure he has enough money to do whatever he wants.

“Why 10%?
I think that the experts urge 10% because it’s a target people can understand, one that doesn’t seem too intimidating. It’s a convenient financial rule of thumb. My own opinion — and I’m sure the experts would agree — is that you should save as much as possible for retirement. Columnist Liz Weston has a great suggestion:

Save 10% for basics, 15% for comfort, 20% to escape. This rule of thumb works pretty well if you start to save for retirement by your early 30s. Saving at least 10% of your income ensures you won’t be eating pet food. Fifteen percent should get you a more comfortable living, while 20% gives you a shot at an early retirement (and yes, you get to count employer contributions as part of your percentage). Wait just a decade to start, though, and you’ll need 15% for basics and 20% for comfort; an early retirement may not be in the cards.”

I think the points are really to start early (and 25 is early) and be consistent and “learn” as you’re going, don’t just dump your money and not pay attention to fees, balances, etc. over the years. Reallocate your investments at least yearly based on your age and goals. Think about Roth versus IRA, index funds versus sector, etc., but be putting the money in somewhere and don’t get paralysis by analysis! You can make adjustments. You don’t have to be fancy, or look for complicated funds, but the only person who really cares about your money is you, so you had better pay attention to it.

My only other advice is if you want to raise the percentage, it doesn’t have to be done today. At 25, start with 10%, then over the next five to ten years you could raise it a percentage or two if you get a raise or cost of living adjustment. That’ll get you to 15 to 20% with minimal impact on your lifestyle with plenty of time on your side.

Oh, that is just not true! The very first thing I thought when I found out I had cancer, at 45, was “Why did I save all my money for retirement instead of doing the things I wanted to do.” The very first thought. Because we had been very, very frugal, and now I will almost certainly not make it to that well-funded retirement. Better safe than sorry? Safe can be very, very sorry, indeed.

Maybe a good suggestion would be to maintain the minimum 10% retirement and then invest as much as you can* in some other way.

Even though you don’t know what your plans for the future are, or you’re very young and retirement is a long way away, then these “other” investments can serve more than one purpose in the future. If needed, these can top up retirement, or perhaps these can be used to buy a home, start a business or something else.

** When I say “invest as much as you can” I mean making every dollar work for you: Work out a budget, live frugally, save what you need, spend money on stuff/experiences/life as dictated by your budget, but don’t fritter away and spare cash. If it’s lying around, or you can make do without spending then INVEST, INVEST, INVEST.

Even if you want to work until you keel over, you might want to do something that doesn’t pay very well; you might get sick; you might want to get married to someone who is deep in the hole and end up making up for them not saving when they were young.

Save what you can, when you can; because things can change. When I was 20 I wan’t saving anything, but when I was 25 I was putting 20% in my 401k and another 10 or so in short-term savings. I spent down the “short term savings” staying home with my son for two years.

@Johanna – at the age, I wanted to so several professions. I call dreams and dreams evolve :) I believe the word ‘retirement’ will be redefined and I agree it doesn’t mean only idleness. @Faculties – saving is good – I don’t think you can have too much, @lurker – if we keep the “65″ number in our heads (btw my number by govt means is 67-1/2)it could very well be 40 YEARS almost the same number of years it took you to get to that number!