Statistics show that many people aren’t saving for retirement. Others may have far more than enough. How do you find the right balance?
Yes, saving too much for retirement is possible, although many more folks aren’t saving enough. What does Scripture tell us about responsible savings? Brian Holtz fills us in today.
Brian Holtz is the Chief Operating Officer at Compass Financial Ministry and the author of Financial Discipleship for Families: Intentionally Raising Faithful Children.
It’s essential to save and invest enough for retirement, but it’s just as misguided to prioritize that above all others, right?
The Bible gives us direction in both cases, all with the goal of finishing well:
- We find God encouraging us to save in Proverbs 21:5, Proverbs 21:20, Proverbs 30:24-25, and Genesis 41:34-36.
- But like everything else, saving should be intentional. The goal is to be a good steward rather than living a life of excess or becoming less dependent on God.
What are some ways to ensure we’re saving responsibly?
- Discern what God has called you to do.
- Determine the expected cost, including an appropriate “emergency fund” to ensure you can persevere through challenges.
- Save toward those specific things and with those particular goals.
- When you have enough, ask God where He would have you shift new financial resources.
It’s important to know what you’re saving for, right?
Absolutely!
- Avoid having money set aside without a purpose.
- If it’s for emergencies, call it emergency savings.
- If it’s for kids’ or grandkids’ college, call it that.
- If it’s for radical generosity, call it that.
- You may not know precisely what it will be used for, but giving it a name helps you remember the purpose God has called that money to so you can remain faithful in your stewardship. There is a big difference between saving a million dollars for retirement and saving a million dollars for your next car. Give the money a purpose and save an appropriate amount for its purpose.
What about retirement savings?
- In your retirement savings, figure out what total you need to care for yourself and your spouse and faithfully work toward that goal. When you reach that goal, shift additional resources to another one of God’s priorities in your life.
- With so many unknowns in retirement, you can never have enough, but over-saving can have two negative outcomes. First, it can lead to us adopting a lifestyle inconsistent with our values. If I’ve already determined what I should save to do what God’s called me to do, I’m far less likely to get off track in my spending decisions.
- Second, when we oversave, we miss the opportunity to participate financially in God's work. While we keep this extra money in our personal accounts, earning ten or fifteen percent a year, it’s not being invested in God’s work, and He always outperforms the market.
What new changes are we seeing at Compass?
- Compass's rebranding and messaging efforts are all centered on helping people understand who we are and how we can help.
- The new name and tagline is Compass Financial Ministry: Well Versed In Finances.
- New website: CompassFinancialMinistry.org.
On Today’s Program, Rob Answers Listener Questions:
- I just received an inheritance and wanted to know if it would cause my Medicare premium to go up.
- My wife's parents both passed away in the last eight months or so, and we now have inherited a farm. We had an appraisal done to establish our tax bases, and we're probably looking at selling a portion of it, at least the house and the farm buildings. Based on the appraiser's opinion, should we sell that, or would it be better to hire a real estate lawyer to do that for us?
- What is your opinion on purchasing gold coins?
- My husband and I had several thousand dollars in regular savings accounts and wanted to move them to an online bank where we'd get higher interest. But my son suggested we put them in a money market account through Schwab. Can you explain the difference between the two?
- In July, it will be two years since I opened an I-bond. When I did that, it was over 9%. I went online and tried to look at it, but I'm having difficulty understanding the current interest rate. And then, should I cash that out, depending on what that is? I was told you can cash that out without losing money after a year.
Resources Mentioned:
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