I'm in my late twenties and have, thus far placed a keen focus on having a healthy personal finance. I'm reaching a point where I'm starting to question if I'm placing too much emphasis on it.

My pension fund is doing well and I'm contributing 15% of my salary that way. I can afford to do most things I want and still save the best part of €1000 per month.

I have money saved for a deposit on a house, however, I enjoy the flexibility that renting gives me right now.

My savings account is about to hit the point at which any extra will get minimal interest and I'm questioning if there is much point in trying to negotiate an increase to that limit with the bank.

I also stand to inherit quite substantially - some in the near future, the majority probably not for 20+ years.

Would taking it easy for a few years to start my 30s be that bad an idea? (for clarity, I'm not being unnecessarily frugal, I travel a lot but am not materialistic and don't want expensive things).

I'm not clairvoyant, but I'm so far ahead of my "retire at 55" plan that I'm not sure what to do.

Anyone else ever experienced similar?

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    "any extra will get minimal interest" It has got to be possible to find a savings account which pays higher interest on higher deposit levels, or at the very very least does not roll off the way you're describing. – Beanluc Sep 20 at 23:23
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    Duplicate of money.stackexchange.com/questions/99235/… ? – stannius Sep 21 at 3:28
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    "I also stand to inherit quite substantially - some in the near future, the majority probably not for 20+ years." The will might be changed to donate it all to the Royal Society for the Preservation of the Hairy-Throated Warbling Tit, the stock market might crash, taxes go up, the executor defrauds you, etc, etc. Don't count your eggs before they hatch!!!! – RonJohn Sep 21 at 12:14
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    Related to Bacon's question about personal goals, it is perhaps worth considering whether you'd be disappointed if you're able to retire at 50 instead of at 55. – Michael Kjörling Sep 21 at 13:32
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    You are not "ahead of your retire-at-55" plan at all, because based on your OP it isn't a plan at all, it's just a dream. If you have a significant amount regular surplus income, and long time horizons (25+ years) there are a vast range of investment possibilities that could reasonably be expected to give you much better long term returns than "cash in a bank savings account." But a reputable advisor would need to know much more about you than what is in your OP, before making any specific suggestions. – alephzero Sep 21 at 14:05
up vote 27 down vote accepted

The key question in personal finance is what your personal goals are. We can't tell you what those will be. 'How much' you should save is a question about payoff now vs in the future. Why eat only rice and beans for the next 20 years, just so you can buy a yacht when you get your inheritance?

Do you want a house in 5 years? How much of a down payment on that house do you want? What will it cost?

Do you want a family? Kids are expensive, and if you want a spouse who will join you in your relaxed lifestyle, then that's another person to account for.

Do you want to participate in expensive hobbies? Start your own business? Give to charities you care about? Open the new 'Richard' wing of your favourite hospital / library / university?

All of these things take money. It seems that you foresee yourself being able to maintain a certain standard of living without more work, but there are 2 things left for you to consider: Have you set your goals as high as you'd like? And, is there risk that your forecasted wealth never comes into play?

It would be a shame if you spent your 30's not working, and your planned inheritance fell through (market crash destroying your parent's assets, a change of heart on their part, whatever). You would find it far harder to restart your career in your mid-40's, with a 15 year employment gap to explain.

Finally - it seems you are not investing your saved money, simply earning a few % in interest. You may find that you are not taking full advantage of what your current savings could provide for you. If you have questions about how to start investing, there are a lot of great answers on this site, and you should browse around.

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    +1 especially for investing. If you have any significant amount in a bank savings account and don't plan to spend it in the near future, you're losing money every single day on inflation. At the very least, drop it in a CD or Mutual Fund and collect it back when you're planning to spend. – Anoplexian Sep 21 at 15:38

To some degree, my story parallels yours except that I have already done the retire before 55 gig.

I don't have any spectacular cosmic advice that is going to change your outlook on life or the direction that you take with it. Not even cookie cutter Work! Work! Work! until you drop advice.

All I can offer is that when I was 29, I took a good couple of months off from the grind and went overseas as a healthcare volunteer. That provided me with a base of operations from which I could hitch a ride or take a bus and wander around various parts of several countries. YOLO.

Later on, it becomes harder to do such things. Perhaps it's a wife and/or kids (g). Perhaps it's a full time business you can't leave for an extended period of time. Perhaps it's your health and you're no longer able to go on such adventures. The future is unknown so if you have all of the financial bases covered, grab an occasional silver ring.

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