‘We Want to Travel.’ Can We Pause Our Retirement Savings?

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“A couple in their early 40s, with a combined annual income of $272,000 and approximately a million dollars saved across various retirement accounts, are contemplating pausing their Roth contributions to prioritize family travel while their children are still living at home,” shared a Reddit user on the r/PersonalFinance subreddit.

This dilemma presents a unique perspective on financial planning, where the couple is considering the trade-off between maximizing retirement savings and creating lasting memories with their children.

The couple currently contributes $16,200 annually to a Roth 401(k) and is deliberating whether to redirect this amount towards travel experiences until their children reach college age. Their goal is to retire in their mid-60s.

Seeking expert advice on this matter, Rachel Lawrence, head of advice and planning at popular budgeting app Monarch and a certified financial planner, emphasizes the importance of understanding one’s financial needs and spending habits both now and in retirement.

While conventional wisdom suggests having three times one’s salary saved by age 40, the couple’s situation of having nearly four times their annual income saved prompts a deeper analysis of their specific circumstances.

The couple’s desire to maintain 75-80% of their pre-retirement income in retirement indicates a preference for a comfortable lifestyle post-career. However, balancing this financial goal with the value they place on family travel requires careful consideration.

Lawrence highlights the significance of aligning financial decisions with personal values, as saving aggressively for retirement may not always align with one’s priorities. In this case, the couple’s inclination towards prioritizing quality time with their children and adventurous experiences suggests a different approach to financial planning.

Ultimately, the couple must weigh the importance of travel against their long-term financial security and establish a budget that accommodates both goals. By striking a balance between saving for retirement and enjoying family experiences, they can create a fulfilling lifestyle that meets their unique needs and aspirations.