Today, we hear from Jennifer, a 47-year-old architect, and her husband Matt, a 49-year-old production manager, who live in Dallas. Their sons are 12 and 14 years old. The family plans one vacation a year that sometimes requires plane tickets, but also drives to visit Jennifer’s family, who live in the Midwest, several times a year. The couple can’t imagine having enough money saved at any age to retire, so they often live with the mindset of “we need to have fun now.”
JENNIFER AND MATT’S PROFILE
Occupation: Architect and production manager
Age: 47, 49
Combined Annual Salary/Income: $210,000
Monthly Roth IRA Contribution: $300
Monthly Savings Contribution: $300
Monthly Employer-sponsored Retirement Plan Contribution: $500
Housing costs: $2,000
Groceries and home supplies: $1,000
Dining out: $500
Loans: $1,200 car loans (Both cars are financed.)
Health, dental, and vision insurance: $1,350 (Matt works for a very small company, so we are self-insured.)
Auto, homeowner, and umbrella liability insurance: $250
Life insurance premium: $150
Internet/digital: $200 (includes TV)
Lawn service: $0
Cell phone: $200
Gym membership: $80
Clothing, misc.: $500
Credit card debt payments: $3,500
How difficult is it for you to put money away for retirement? Have you had to give up anything?
It’s been hard, said Jennifer. I lost my job in 2009 after the real estate market crashed because I design high-end homes, and my job was eliminated. Since that time, I’ve worked for several different companies, but the positions haven’t been long-term, and I haven’t been able to focus on my retirement savings as I would have liked. I’m now self-employed, which is great to give me the flexibility for the kids, but it also means no employer matches for my retirement savings. Luckily, Matt has been at the same employer during this whole time and has been able to contribute to his 401(k) there.
If you had to put away more money for your retirement, what would you cut out of your budget?
It’s our plan to pay off the cars, and then put that money into our retirement. If all goes as planned, we shouldn’t need new cars in the family for another five to ten years, except for getting the boys something to drive (but they will help pay for that).
What are your retirement goals? What age do you want to retire? What do you want to do in retirement?
Actually, Matt and I need to talk about that. Since Matt’s dad died as a young man, there’s a part of him that doesn’t think he’ll be around for retirement age. But we need to balance having fun today with saving for tomorrow. Since we don’t have pensions, Social Security looks like it may not pay out in full by the time we retire, and we haven’t saved into our 401(k)s consistently, I fear we will need to continue to work, at least part-time, into our 70s.
What does “health” mean to you?
I try to have a good balance in my life, which I think is an essential part of being healthy. I know our family has imperfect eating habits, but I try to keep chips, soda, and too much junk food out of our home. We are all a little too tied to our devices, so I worry that we need to monitor our electronic usage a bit more. I try to meditate, exercise and keep a gratitude journal to help keep a healthy balance in my life. Matt hasn’t been sleeping well due to stress with his aging mom and his job. So that’s something we want to work on.
Are there luxuries that you always need to include in your budget? House cleaner? Grocery shopper?
I started my own virtual side gig with a skincare company to be able to pay for a luxury: a twice-monthly house cleaner. It’s been life-changing for me, and since I’m using the money I make with my side gig, I don’t feel too guilty. Matt’s guilty pleasure is an Amazon.
Do you have a financial planner? If so, explain why your planner is valuable.
I’m embarrassed to say, we haven’t seen a financial planner. I manage our finances and I try to learn all I can. This year, we’re definitely going to make an appointment and get guidance from a professional. I know we’re behind where we need to be in saving for our retirement, so a financial planner would probably be helpful.
In addition to saving for retirement, what are some of the big picture items you want to invest in?
We haven’t started college funds for the kids yet. We’ve been focused on paying down credit card debt we built up when I lost my job in 2009. Since I paid for my own college education through scholarships and student loans, it hasn’t been a priority for us yet. But I know with the rising costs of education, our kids would really benefit from us starting a college savings plan.
What intimidates you in planning for retirement?
We’re really not sure what the best strategy is for us to get caught up and save for retirement. We thought paying off credit card debt was the best, but we’re open to more strategic guidance on what we need to do.
Jennifer and Matt make a good annual income, but they have quite a few expenses, including their health insurance coverage and credit card debt that doesn’t allow them to save as much as they would like for retirement. Since the couple realized they don’t have a clear vision for what they want in retirement their first step toward preparing for it is to discuss their retirement goals together and make a plan to meet with a financial professional.
Neither Transamerica nor its agents or representatives may provide tax, investment, or legal advice. Anyone to whom this material is promoted, marketed, or recommended should consult with and rely on their own independent tax and legal advisors and financial professional regarding their particular situation and the concepts presented herein.
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