OK, this slightly scrupulous mommy of 4 needs some financial advice. I am in my early 40’s, and I plan on working until I’m 65. At that time, I will be eligible for a state pension plan payment that will replace 60% of my working income for the rest of my life. Not too bad of a deal. However, I’m worried that I will not be able to pay my bills on only 60% of my income (although I should have the house paid by that time). I have recently opened a Roth IRA account, and I’ve been putting a small amount of money each month in it to help supplement my retirement income.
I am also am in the process of putting away a few extra thousand dollars in an “emergency fund” for unexpected expenses, such as car repairs, medical expenses not paid by insurance, etc. Once I have this cash reserve built up, I plan on paying off my debts (lots and lots of them), by using a snowball approach.
In the meantime, I am continuing to support my parish financially, and a few other Catholic missionary projects. I’m not up to the 10% mark yet, but when I have my other debts paid off, I would like to raise my charitable giving to at least 10%. I would like to be able to continue this amount throughout my retirement years, also.
My question is: am I just building a bigger barn by putting more money away for retirement, and building an emergency fund, or am I just being prudent?