From Here to Financial Happiness

Day Forty Seven The Last Shall Be First

You have now nailed down your long‐term goals. But what should your priorities be? That's an easy one. Chronologically, retirement may be the last of our life goals, but we should always put it first – because it's the only goal that isn't optional.

No, we don't have to buy a house. No, we don't have to pay for our children's college education. But unless we suffer an early demise, one day we will almost certainly retire, and that will involve a heap of dollars. To amass the necessary sum, we need to make saving for retirement a priority throughout our working career.

I realize this seems backward. Why prioritize retirement – which might be years away – when we could be focusing on buying a home and paying the kids' college tuition bills, which are coming up all too quickly? Many folks postpone saving for retirement while they focus on these more immediate goals, and it's a huge mistake. If we put off saving for retirement until our late thirties or even our forties, we will be hard‐pressed to save enough for a comfortable retirement, unless we can find some way to sock away 20% of our income every year and perhaps much more. Indeed, if we procrastinate too long, there may be no way to make the numbers work, and suddenly we might be faced with an impoverished retirement or a working career that lasts far longer than we ever imagined.

My advice: As soon as you enter the workforce, begin contributing to your employer's retirement plan ...