Yes, it is possible to save too much for retirement

I never really liked the vehicles I owned. It was an impressive lot, including a Volkswagen Beetle, Mercury Capri, Toyota SR5 pickup, Toyota Camry and Ford Fusion. I want to say that they got me where I needed to go, but that was not always the case. All the cars except the Camry were unreliable, which would sometimes make my life stressful and difficult. Of course, it did not help to keep those cars for years.

When I think about it, I also did not really like the houses I lived in. It included small apartments, without many of the standard amenities you would expect when renting or buying a home.

Some of my apartments were downright awful. In 1979, I rented a studio apartment in an alley above a garage. The apartment had poor insulation. It would get so cold in the winter, it felt like the North Pole, and it would get so hot in the summer, it felt like Death Valley. It was so small that a friend who was visiting asked if the place had a bathroom.

It was not the safest place to live. In the apartment next to me lived a drug dealer, my car was broken into more than once and one day someone stole my clothes from the laundry room. I stayed there for six years and endured all the discomfort and effort that surrounded me.

The small 789-square-foot apartment I bought in 1985 was an upgrade, but it was not a place you wanted to stay for 35 years. This is what I did. A young lady, about the same age as when I first moved into the studio apartment above the garage, bought my apartment earlier this year. Her real estate agent told me that this was just a starting home for her and that she would probably move within five years. When I moved into my current home, I realized all the amenities I had missed over the years in that small apartment.

I made a lot of money working for a big airline, so I did not have to live that way. But I chose – because I wanted to save money. Looking at my investment portfolio today, I have more money than I need for a comfortable and safe retirement. Actually, I probably saved too much.

You may ask, ‘Can anyone save too much money? Is there such a phenomenon in personal finance? “I think so.

When it comes to saving for retirement, you need to strike a balance between giving up smaller rewards today and getting bigger rewards later. But you do not want to delay satisfaction to such an extent that you make life more difficult than it should be. And that’s what I did to raise the huge amount of cash I’ll probably never need. Some of this money would have been better spent in my earlier years.

After I retired, I hired a cheap financial advisor to manage my investments. Hiring that financial advisor made me think about my relationship with money.

One day we will go over my budget for the year. I could see he was asking me to spend more. He asked me if I wanted to buy a new car.

“I do not believe so,” I said.

He jokingly replied, “How about a boat?”

“No, I’m not fishing.” I interrupt him. “I have to tell you I’m getting married.”

“Congratulations, you can afford to buy a nice ring for her,” my advisor said. “Why are we not adding it to your budget for this year?”

Since then, I add quite a few more items to my annual budget.

The result: I try to live more in the moment, to enjoy life more. You do not always have to live on your future self – because it does not save you anything if you are not willing to spend it.

This column originally appeared on Humble Dollar and was published with permission.

Dennis Friedman retired after a 30-year career in production at Boeing Satellite Systems. He is a self-described ‘humble investor’ and enjoys reading historical novels and about personal finances. His previous articles include Live It Up, Do not Delay and Try Not to Slip. Follow Dennis on Twitter @DMFrie.