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Question: How much is too much when saving for retirement?

My husband and I are both public school teachers. We have 403b retirement accounts, state-supported teacher retirement system pensions, and other savings accounts, including a 529 plan for our 12 year old child. It seems to me that we are putting a significant amount of money into these accounts, but have little left over to spend on things we can enjoy now such as family vacations. How do we know how much to save without compromising our current quality of life? I would like to be able to enjoy life more now, not save everything for the time when we retire. I do not want an extravagant lifestyle, I'd just like to enjoy our time together as a family while we still have it.
Thank you,
Jill Hanson

Response:

Jill, I love your question.  We all have to be very honest with ourselves about calling enough is enough when it comes to scrimping and saving.  I strongly believe that experiences we enjoy, especially with family and friends, can be investments in living.  

Happiness means so many rewards, and not just emotional ones.  You can earn more as a fulfilled and balanced person on the job. And better physical health has the potential to help you avoid the retirement time-bomb of declining health.

But you don't have to chose between the saving and happiness.  It sounds like you're in a good place in terms of retirement savings. How much would a vacation cost you?  Assuming that I'm going to tell you to go ahead and take a vacation (because I am!), the two equations that I'm giving you as an assignment are these:  

1. What will retirement look like?  That includes: When do you plan to retire? Would you like to work part-time in retirement? How much do you need to save to add to those pensions to live comfortably?

2. What does a vacation look like?  Are you talking a couple of low-key vacations at the cost of $500 to $1,000 each?  Or are you talking one huge trip costing in the thousands?  

Answer these questions and find a way to jiggle your vacation budget to both keep retirement savings on track and still enjoy life today.

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