Take a look at what a long time friend said to me the other day:

When you're just starting out you're house poor. Until the kids leave for college you're kids poor. Then you're college poor... When does it end?

He was lamenting the fact that the long and easy retirement he'd always envisioned for himself was starting to look like a shorter and shorter one. Not only that but he feared it might also be one in which he'd have to work at least part time to make ends meet.

Now in reality his retirement picture may not be as bad as he lays it out. He's a highly paid professional for a big company. He gets lots of great benefits: stock plan, options, health care... He does alright. He might have more in his retirement portfolio that you or I might need.

I think his very real concern is that he just might not have enough retirement savings stashed away - substantial as they may well be - to support himself in the manner to which he's become accustomed. He's concerned that his standard of living won't live up to his dreams in retirement. He might be coming to the realization that if he'd have been saving more all along he might not be facing a reduced standard of living in retirement.

Save 'til it hurts for retirement. It helps in a couple of ways.

1. The obvious way is that every dollar you save today will have that much longer to compound and become a much larger investment to fund your retirement. Put away as much as you can as early as you can and take advantage of every bit of time you have for that money to compound.
2. The second reason isn't so obvious. Remember his lament about being house/kids/college poor? It's true. Regardless of where you are in life there's never enough money. It's easy to focus on the big house payment or the kids' braces and violin lessons as to why you feel so poor. But you get through somehow.

   Do you think he and his young family would have found a way to muddle through somehow on a few less dollars per month? Right. There's no question he would have. If his paycheck had been $100 less per month he would have had no choice in the matter. In fact his standard of living would have been exactly in line with his smaller paycheck.

Do you see what he'd been afraid had happened? He was expressing fear that he'd not saved enough early in life to both start building that retirement portfolio and to self-adjust his standard of living to a level he could easily hope to continue in retirement.

Every dollar you earn today must accomplish two things:

1. It must pay for your current lifestyle
2. It must pay for your lifestyle in retirement

Every dollar you bring home represents this simple trade-off. The more "retirement poor" you feel today - the more you save 'til it hurts - the less poor you'll actually be in retirement.