Market Briefs Newsletter

Subscribe to our FREE finance & business newsletter to get financial news you can finally use.

Thanks for signing up to Market Briefs! Please check your email to confirm your subscription. If you don't see the email in an hour, check your spam and promotions folder. 

Be sure to read our Privacy Policy & Terms of Use.

  • Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
Minority Mindset

Minority Mindset

Defy all odds.

  • Home
  • About
  • Blog
    • WEALTH
    • REAL ESTATE
    • CRYPTO
    • STOCKS
  • PRODUCTS
  • MONEY 101
  • GUAC TALK
Advertiser Disclosure

Our promise to you.

Minority Mindset, LLC is an independent, advertising-supported publisher. We are not an investment advisor. Always do your own due diligence and never blindly listen to a random article on the internet. We do our best to provide financial education with our free videos, articles, tools, and other self-help content. But these are for informational purposes only, they’re not investment advice.

Minority Mindset does not and cannot guarantee the accuracy or applicability of any information regarding your individual circumstances. The examples we provide are hypothetical and we encourage you to get advice from a qualified professional regarding specific investment, tax, legal, and financial issues. Previous market performance does not guarantee future performance.

We want everyone to be able to make educated financial decisions. We do not feature every company or financial product available. However, we’re proud of the financial education and guidance that we provide at no charge.

We’re paid by our brand partners and advertisers. This may influence which products we mention, review, and where they appear on our site. But it does not affect our recommendations or advice.

See more from Wealth

Why You Should Still Save Your Money Even If You Don’t Want to Retire Early

August 11, 2020 by DJ

DJ Whiteside August 11, 2020

Why You Should Still Be Saving Even If You Don't Plan On Retiring Early

Disclaimer

We only endorse products that we truly believe in. Some of the links below may earn us some extra guac at no additional cost to you. Please pass the chips & thank you for feeding our habit.

Everywhere you look these days, more and more early retirees are making the headlines of financial media. However, a surprising number of financial gurus and publications seem to be adamantly against the concept.

Arguments, such as this one from Market Watch, claim that by retiring early you’ll be limiting your income potential, living in fear of market downturns or unexpected medical expenses, and possibly even risking the loss of your sense of identity.

While any one of these points may be true for some people, it doesn’t necessarily mean that you shouldn’t be diligently building up your nest egg. In fact, even if you don’t plan to retire early, I would argue that most people would benefit from saving a higher percentage of their income than they appreciate. Here’s why.

You Don’t Realize How Much Wealth You’re Giving Up

The process of saving and investing your money isn’t just a path towards leaving your day job as quickly as possible. It’s also a way to potentially do something that many people talk about but few actually achieve: Build wealth.

By design, your retirement funds are the optimal vehicles for accomplishing this goal. How? By taking advantage of two important aspects of your retirement savings plans:

  1. Tax sheltering
  2. Compounding returns

By saving money into a tax-sheltered retirement plan (like your 401k and IRA), you’ll be getting a free-pass to not have to pay taxes on this income for the year. That means more of your money goes into your pockets rather than to the IRS.

On top of that, the more money you save into these accounts, the more that gets invested. This maximizes the potential of compounding returns to multiply your income several times over and grows your nest egg far greater than you might have ever accomplished otherwise.

You'll Want Other Big-Ticket Purchases

When we decided to move into our current house, it was somewhat of a spontaneous but much-needed action. However, we were able to move forward rather quickly because we had already spent several years saving up a respectable amount of money in our emergency fund.

According to PR Newswire, as many as 46 percent of millennials say that coming up with a 20 percent down payment to buy a home is going to be a challenge. However, if you’ve already been saving for retirement using an IRA, then you’re allowed to withdraw as much as $10,000 without penalty for a home purchase.

In our case, even though this money was designated short-term for emergencies and long-term for early retirement, it enabled us to upgrade our living situation in a relatively short amount of time. Had we not spent years accumulating this money in advance, it would have taken us a long time to get to where we are today.

The same is true for emergencies too. Unfortunately, none of us ever really knows when we’ll lose our job or be faced with expenses that extend far beyond our current financial situation. This is why as cliché as it sounds, saving little by little, even if it's just for a rainy day, is a smart move.

Eventually You Will Want to Retire

At the shop I used to work at, several of my coworkers were quite a bit older. Whenever we’d ask them if they ever planned to retire, they’d always laugh and ask “Why would I want to do that?” They were in good health, loved what they were doing, and had no plans to call it quits anytime soon.

Then ten years passed. Their health had started to decline, or the health of their spouses had started to become an issue. On top of that, their luster for work was waning too. They started talking more and more about how they wished they were someplace warm doing anything else besides punching a timecard.

While you may be young now, love your job, and have no thoughts about retirement, eventually you will. Like all things in life, your priorities will change as your situation evolves. Ultimately, there will come a time when you’ll want to separate from work and live out your golden years as you see fit.

To enable yourself to have this choice, you need to start preparing now. While that doesn’t necessarily mean you have to save thousands of dollars every month, it would be smart to err on the side of caution and save as much as you can. Your future self will thank you.

Your Savings Will Enable You to Do Things You Never Imagined

Even if you plan to retire someday, think about how enjoyable it will be if you’re confined to a rigid, fixed income.

In a poll conducted by the National Institute on Retirement Security, as many as 40% of the respondents said they’re living on income from Social Security alone. With the national average benefit being around $1,000 per month or so, that’s not going to paint the picture of luxury that most people look forward to in retirement.

What if you had hoped to travel the world, start your own business, or even left a legacy for your heirs? When we save beyond what we anticipate our retirement living expenses will be, it creates a buffer that we can use to do things we’ve always wished we could.

Financial Independence Should Still be a Goal

You may not want to retire early and possibly even have valid arguments why people should continue to work as long as they’re able to. But no one can deny that there’s a much bigger, more important prize we achieve when we save our money: Financial independence.

Financial independence is when you reach the point where your assets can cover your living expenses for the rest of your foreseeable life. In other words, if you lost your job tomorrow, it wouldn’t matter. You’d still have enough money to buy food, pay your mortgage, and live your life in the same way that you do today.

This is a much different goal than early retirement. With early retirement, the goal is to separate from your employer well before you’re in your 60s.

However, for me, achieving financial independence means you’ve accomplished something greater. You can continue to work in the same job, drop down to part-time, or even go do something else altogether. The choice of what you’d like to do with your time is now yours to make because money is no longer an issue.

Keep on Saving!

Whether early retirement is on your radar or not, there are plenty of good reasons why you should still be saving and investing your money. Not only could you be leveraging time to build a fortune that other people dream about, but you’ll also be allowing yourself to do things you may have never imagined were possible. Grant yourself the opportunity to make these choices in the future by doing the smart thing now and continuing to save as much as you can.

Contributor’s opinions are their own. Always do your own due diligence before investing.

Keep Reading:

  • 3 Fail-Safe Ways to Improve Your Finances
  • Get rich quick investments don’t work: here’s why
  • How To Set Yourself On FIRE—5 Steps To Build Your F-You Fund

Get Richer Sleeping eBook & Financial education emails

Written by DJ Whiteside.

DJ writes about retirement and credit cards. He loves looking for new ways to optimize savings, build wealth, and sharing what he learns with others.

Primary Sidebar

Advertiser Disclosure

Our promise to you.

Minority Mindset, LLC is an independent, advertising-supported publisher. We are not an investment advisor. Always do your own due diligence and never blindly listen to a random article on the internet. We do our best to provide financial education with our free videos, articles, tools, and other self-help content. But these are for informational purposes only, they’re not investment advice.

Minority Mindset does not and cannot guarantee the accuracy or applicability of any information regarding your individual circumstances. The examples we provide are hypothetical and we encourage you to get advice from a qualified professional regarding specific investment, tax, legal, and financial issues. Previous market performance does not guarantee future performance.

We want everyone to be able to make educated financial decisions. We do not feature every company or financial product available. However, we’re proud of the financial education and guidance that we provide at no charge.

We’re paid by our brand partners and advertisers. This may influence which products we mention, review, and where they appear on our site. But it does not affect our recommendations or advice.

More From Wealth

  • How Does The Gemini Hot Wallet Compare - 2022 Wallet Review
  • Is Investing In The Stock Market Worth It?
  • Is SoFi Legit? Using SoFi To Invest
  • What Age Should You Start Investing In Real Estate?

Get Your FREE Guide To Building Wealth

& our daily newsletter

Thanks for signing up for our financial education emails! Check your email to confirm your subscription. If you don't see the email in an hour, check your spam and promotions folder.

Be sure to read our Privacy Policy & Terms of Use.

Featured Wealth Posts

Gemini Hot Wallet Review

How Does The Gemini Hot Wallet Compare - 2022 Wallet Review

Is Investing in the Stock Market Worth It?

Is Investing In The Stock Market Worth It?

Is SoFi Legit? Using SoFi To Invest

What Age Should You Start Investing In Real Estate

What Age Should You Start Investing In Real Estate?

The Latest On Wealth

REITs VS Real Estate Mutual Funds

REITs VS Real Estate Mutual Funds - Which Is Better?

Roth IRA Conversion

What is a Roth IRA Conversion and Why Would You Need One?

Stock Market Investing Accounts

Best Stock Market Investing Accounts for 2022

M1 Finance Roth IRA Review – Is It Good for 2022?

Kraken Crypto Review 2022 - Why You Should Use Kraken

Binance Review

Binance.US Review 2022: A Trusted, Beginner-Friendly Option?

M1 Finance Review

The Ultimate M1 Finance Review - Great For Experienced Investors

Fundrise Passive Income

Can You Use Fundrise to Generate Passive Income?

How To Start Investing With $100 Per Month

RealtyMogul Review

RealtyMogul Review (2022) - How It Works, Fees And More

Footer

Keep Hustlin’

Company

  • About Us
  • Store

Help

  • Contact Us
  • Advertise
  • YouTube

Legal

  • Privacy Policy
  • GDPR Opt-Out
  • Comment Policy
  • Terms of Use

Follow us on:

Disclaimer: The information on this site is of a general nature only. It does not take your specific needs or circumstances into consideration. You should look at your own personal situation and requirements, and seek independent professional advice, before making any financial decisions. Our content is provided for informational purposes only, and no content that is provided or included in our products or services is intended for trading or investing purposes. We will not be liable for the accuracy, usefulness, or availability of any information transmitted and/or made available by way of our products or services, and shall not be responsible or liable for any trading and/or investment decisions made by you based on any such information. For a further understanding of this Disclaimer and use of our site, please see the information contained in our Terms of Use and Advertising Disclaimer.

Minority Mindset may earn a portion of sales from products that are purchased or recommended through our site as part of our Affiliate Partnership with retailers and brands.

Minority Mindset has partnered with CardRatings for our coverage of credit card products. Minority Mindset and CardRatings may receive a commission from card issuers.

© 2022 Minority Mindset, LLC. All Rights Reserved.