Are You Saving Too Much?

by Dual Income No Kids on February 17, 2007 · 0 comments

There has been a lot of talk in the news about whether Americans are saving enough. Much of the discussion was sparked by a piece in the New York Times. The Times story said that a couple of new economic studies showed Americans were saving enough for retirement. This caused a stirr because it contradicts conventional wisdom.

The Times article has gotten a lot of mileage in the press. So basically, there seems to be a lot of debate on this topic. Most stories commenting on the Times piece seem to say the question depends on how one calculates the funds needed at retirement.

Without going into this too much, I think there are two reasons why you should continue to save as much as possible. First, the fact that question depends so much on measurement is a problem. Why risk not having enough money at retirement because someone gave advice based on bad calculations? Second, social security is tremendously expensive. It is entirely possible that the federal government will try to roll it back in the next few years. If there isn’t any social security, you’ll need to cough up the money yourself. Quickly put, both of these reasons speak to the need to have a healthy cushion of wealth at retirement.

I wouldn’t mess around, I’d save as much as possible.

Best,

James

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