Am I building a bigger barn, or making a good decision?

[mommyof4]

OK, this slightly scrupulous mommy of 4 needs some financial advice. I am in my early 40’s, and I plan on working until I’m 65. At that time, I will be eligible for a state pension plan payment that will replace 60% of my working income for the rest of my life. Not too bad of a deal. However, I’m worried that I will not be able to pay my bills on only 60% of my income (although I should have the house paid by that time). I have recently opened a Roth IRA account, and I’ve been putting a small amount of money each month in it to help supplement my retirement income.

I am also am in the process of putting away a few extra thousand dollars in an “emergency fund” for unexpected expenses, such as car repairs, medical expenses not paid by insurance, etc. Once I have this cash reserve built up, I plan on paying off my debts (lots and lots of them), by using a snowball approach.

In the meantime, I am continuing to support my parish financially, and a few other Catholic missionary projects. I’m not up to the 10% mark yet, but when I have my other debts paid off, I would like to raise my charitable giving to at least 10%. I would like to be able to continue this amount throughout my retirement years, also.

My question is: am I just building a bigger barn by putting more money away for retirement, and building an emergency fund, or am I just being prudent?

Thank you.

 

[rwoehmke]

You are being prudent and I admire your plan. Others will not have to support you in retirement, which is very responsible behavior.

 

[rlg94086]

I agree. You are being prudent. Worst case? You may end up with more money than you need. There will still be charities to give to in retirement, the possibility of unexpected medical bills (long-term care in case you or your spouse has alzheimers or parkinsons is expensive!), assistance to your children/grandchildren, etc.

Take this from someone three days your senior (therefore older and wiser ) - keep up the prudential financial investments! My wife and I went through financial tough times (laid off, less paying job for a while, etc.), so we are in a rebuilding mode. I hope to be in the same situation you are in after a few years.