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Saving for retirement is an essential financial goal that everyone should strive to achieve. However, there comes a point when you should stop saving for retirement. If you are not careful, you could miss out on this crucial decision, and it can have serious consequences for your financial goals. Here, we will discuss when you should stop saving for retirement.
1. When You Have Enough Retirement Savings
The first and most obvious reason to stop saving for retirement is when you have amassed enough retirement savings to last you through your old age. You will need to calculate your expected expenses after retiring; when your savings can consistently cover those expenses, you can consider stopping making retirement contributions to your retirement accounts.
You can estimate how much money you need to retire by considering things like inflation, travel, healthcare, and other expenses. A financial advisor can help you determine if you have accumulated sufficient retirement savings, or if you need to contribute more to your retirement accounts.
2. When You’re in Debt
It would be best to focus on paying off high-interest debt before continuing to add more to your retirement accounts. Credit card debt, personal loans, student loans, and car loans can be a terrific obstacle to your financial well-being. Before you begin saving for retirement, ensure that you make necessary payments to credit cards and loans to reduce your debt burden.
Having high-interest debt can quickly sabotage your retirement goals, making it difficult to save enough to retire comfortably. It is better to pay off any high-interest debt, and then you can start saving money again.
3. When You Need the Money for Emergencies
It is also wise to stop contributing to your retirement accounts when you have an emergency, and you need the money. The money in your retirement account may take a long time to withdraw, and you might incur heavy penalties for early withdrawal. In such a scenario, you may need to prioritize spending your savings on yourself and your family over saving for retirement.
Emergencies can arise in different ways, including job loss, medical bills, and unexpected home repairs. Therefore, you need to have a realistic view of your financial situation, putting some emergency savings in place to avoid unnecessary hardships.
4. When Your Retirement Plans Change
Sometimes, life may throw you a curveball, and your retirement plans may change. For instance, if you plan to work until you turn 65, and suddenly find yourself out of work in your late 50s, you might have to postpone your retirement. You might need to stop making retirement contributions for some time until you resume work and have the income to support your retirement savings.
Conclusion
In conclusion, it is necessary to note that knowing when to stop saving for retirement is as crucial as saving for it in the first place. In life, situations change, and so do our plans. Thus, It is essential to reassess your finances regularly and adjust your retirement savings as needed. Knowing when to stop saving for retirement will help you achieve your financial goals and live a comfortable life after retirement.
As someone who's nearly 27, I'm going to be putting $1,000 per month into ETF's while increasing the amount by 4% per year in accoutdance to my yearly raise for 13 years. Then when I'm 40, I'm going to stop putting money into my retirement. That way it feels like I'm rewarding myself by giving myself my entire check. I get my check, while at the same time I have enough in the markets for Compund Interest to do its magic.
I wasn't financially free until my 40’s and I’m still in my 40’s, bought my third house already, earn on a monthly through passive income and got 4 out of 5 goals, just hope it encourages someone that it doesn’t matter if you don’t have any of them right now, you can start TODAY regardless your age INVEST and change your future! Investing in the financial market is a grand choice I made. Great video! Thanks for sharing!Very inspiring! I love this
Been following you for long time. Love your content. I am a special provisions employee, and after 20 years of service I’ll be 44 years old. I want to leave federal Gov. Service. And do something else. At what age can I collect my reduced pension?
I am a long-time FERS employee and my wife and I are covered under my FEHB. What happens to my wife's FEHB coverage if I should die before I retire? Thanks.
Reducing the amount saving to TSP, but not so much that I'm not getting the agency match; no point throwing that free money away.
Dallen, this is great advice!
I will stop saving when I either reach 65 or physically can't which means I physically can't enjoy it too.
Plus with exercise, a lot of the benefits come during the recovery, so if you aren’t giving yourself enough time to recover, it can be counterproductive anyway. I think that somehow may work as a metaphor for how you may want to approach retirement, lol.
This is a great video, I learn a lot watching your videos and it has been helpful to me. Building a steady income is quite difficult for newbies.. Thanks to Mrs. Belinda Owens for improving my portfolio. keep up with the good videos.
AWESOME commentary on pros and cons. For myself, having waited too long to start saving as a fed emp, I will be working more years than perhaps necessary. But I still see a future that does not require me to forfeit good years of full retirement. I greatly appreciate what you are doing Dallen for your clients.
One of the best practical advice. Amazingly simple and fact!
So is it ever advisable to work another year or two if you want but stop any extra payments to tsa or retirement accounts and save the extra cash?
I am already retired, but I need to be reminded of this sometimes too!
I saw one of those interview old people video. A lot of them regret didn’t travel earlier, even at a cheaper way like going outdoor nature, etc.
Yep! Balance for me is every annual raise or step increase take half and put the other half in TSP, that way I never see it. Can't miss what I never had to spend.
Thank you! This is the main reason I hate the "Wait till you you are 70 to collect SS crowd" yes you will get a lot more money, but you will also be 70! I get that you should protect your and your love ones future, but at some point you will run out of "future"