By all means, put some money away if you can, but don’t be so overextended that you can’t afford anything that brings you joy.
A young colleague came to me recently with a shameful admission: Despite the lecturing of her friends and family, as well as her own best intentions, she had not yet signed up for the company 401(k) plan. She lives in an expensive city, and is nervous about tying up her money for the next 40 or 50 years.
Like any good retirement economist, I insisted she enroll immediately. I’ll help, I said. It will be fun.
And it was — until we got to the part where she had to decide how much to contribute from each paycheck. I told her not to worry about “maxing out” her contribution to take full advantage of the company’s generous matching program. It was OK, I said, to contribute however much she felt comfortable with right now.
Continue reading the entire piece here at Bloomberg Opinion (paywall)
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Allison Schrager is a senior fellow at the Manhattan Institute and a contributing editor of City Journal.
Photo by Alan Schein/Getty Images
