Today, we hear from Chase, a 22-year-old who lives in Minneapolis. After high school, he decided that a four-year degree at a university wasn’t in the cards. Instead, he opted for an apprenticeship as an electrician, which included on-the-job training and full reimbursement for his education. On the weekends, Chase loves to ride his motorcycle, hunt, fish, and take out his family’s boat or snowmobile. He plans to retire by the time he’s 70.
Occupation: Apprentice electrician
Annual Salary/Income: $27,000
Monthly Roth IRA Contribution: $50
Monthly Savings Contribution: $100
Monthly Employer-sponsored Retirement Plan Contribution: $0
Housing costs: $200 (I live with my parents.)
Groceries and home supplies: $100
Dining out: $100
Loans: $200 car loan
Health, dental, and vision insurance: $0 (I’m still on my parents’ plan.)
Auto, homeowner, and umbrella liability insurance: $35
Life insurance premium: $0
Lawn service: $0
Cell phone: $50
Gym membership: $25
Clothing, misc.: $100
Credit card debt payments: $0
How difficult is it for you to put money away for retirement? Have you had to give up anything?
Since I still live with my parents and my retirement contributions come right out of my check before I even see it, it hasn’t been hard to save for retirement. When I get a place of my own in another year (when I’ve completed my training), I expect it’ll be harder since I’ll have more expenses.
If you had to put away more money for your retirement, what would you cut out of your budget?
Well, I guess I would stop eating out as much and pack my lunch more. Although I don’t have a lot of extra money right now, I won’t have student loan debt like many of my friends. And I’ve been making a full-time salary while I’m getting my training.
What are your retirement goals? What age do you want to retire? What do you want to do in retirement?
I think I’ll probably work until I’m about 70. I really like nature. So having a home on the lake to enjoy on the weekends and when I eventually retire is a goal of mine. Fishing and boating every day of the summer is something I would really look forward to.
What does “health” mean to you?
It means having the mind and body I need to do the things I want to do. Being an electrician will keep me moving way more than a desk job, but I also try to get to the gym a few days a week. My mom makes sure I have a somewhat healthy diet — at least for dinner — when I eat with them at home.
Are there luxuries that you always need to include in your budget? House cleaner? Grocery shopper?
Recreational vehicles. Right now, I have a motorcycle, but someday I plan to get a boat and an ATV. Hunting is a hobby of mine, so I will always need money in my budget for hunting licenses, guns, and ammo.
Do you have a financial planner? If so, explain why your planner is valuable.
I met once with my parents’ financial planner to set up my Roth IRA. But until I’m done with my training, I don’t have a lot of money to invest. My parents are getting ready to retire comfortably so I know I can trust my parents’ financial planner to help me get there as well and will turn to him when I’m ready to start investing.
In addition to saving for retirement, what are some of the big picture items you want to invest in?
Number one on the list will be a house. Once I purchase my first house, I’ll start saving for my lake house. It would be great to be able to enjoy that lake house before I actually retire.
What intimidates you when planning for retirement?
I just wonder how much I’ll need almost 50 years from now. There are so many things that could change; I feel like I’m just guessing about what retirement might hold. I really don’t even know where to start.
Chase is ahead of many of his peers because he won’t be saddled with student loan debt once his education and training are complete. He has a lot of hobbies that could become expensive, so he needs to develop a plan that’ll allow him to get his dream house on the lake for retirement.
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