Our Retirement Plan

Retirement! What all working people dream about. The day that we can stop working and start doing whatever the heck we want. I want to travel. I want to spend time with my kids and (hopefully) grandkids. Hubby wants to work on cars. He likes to work on them now, so I could see him restoring a car. He also says he wants to relax. Maybe get someone to do our yard work. Dreams. They are good to have.  But a plan is even better.

Hubby and I both work. He works full time and I work part time. It works for us now. It may change over the years. I may work full time once the kids are all gone. Hubby's job offers a Roth 401K with a match. My job offers a 401K with a match. We are currently putting about 15% into both of those plus the matches. We talk with our financial adviser as well. We want our money to work hard for us.  

Could we be putting more into our retirement? Probably. We have a long term plan and we are sticking with it. We follow Dave Ramsey's Baby Steps and we are currently working on Baby Steps #4  (15% into retirement) and #5 (saving for college).  Dave says to fund your retirement before your kids college. That is hard for me as a mom. I do understand why he tells you to do it that way. I DO NOT want to be a burden to my kids when I am old. I know several adults 60+ that depend on their grown children to help them financially. I even know a few that have passed away that have left their spouses in a financial mess. Hubby and I do not want to do that. We want to spoil our kids and grandkids, not hurt them.We are not counting on Social Security to support us. It may not be there when we need it. If it is, then that is just frosting on our cake.

Why does Dave Ramsey say only 15% at this point? Well, we have other things to do too. We have to get our kids through college. Since we are a little behind on this step we are going crazy with it. I know that in 5 years we will be done with this step, hopefully sooner. Then we want to pay our mortgage off early. . We currently have 13 years left on our mortgage but our goal is to have it paid off in 10. I dream of the day that the mortgage is gone.  We will not owe anyone anything. I am 43 soon to be 44 and Hubby is 47. If we hit our goals, I will be 53 and Hubby will be 57.  Then we can go crazy on retirement. We will have no payments so we could save and invest a huge amount each month. 

Do you have a goal for retirement? Do you ever crunch numbers to see where you will be at? I do all the time. There are several good retirement calculators out there. I use Dave Ramsey's Retirement Calculator. I play around with it . If I can cut our grocery budget and add $50 more a month how much more will we have. If YD gets an extra $1,000 in scholarships a semester how much more will we have. If we pay our mortgage off 6 months sooner how much will that become. If Hubby works until 62 1/2, 63, 64, 65...

If we have a goal and we go for it , even if we don't hit it 100%, we will still be in great shape. If we wander through life aimlessly, living for only today and not worrying about the consequences of tomorrow, tomorrow is going to suck. So Hubby and I are going to stick to our plan. We know things happen and we will adjust our plan if we need to. Right now we are looking at the finish line. Our retirement. We can't wait for all of the amazing things we will do.

What are your goals for retirement? Are you already retired and living all of your dreams? I would love to know how you did it. 


  1. My 2 cents: compound interest is the most important aspect of saving for any goals. When it comes to retirement, it is essential to take advantage of it. I would advise you to use a financial calculator to see the huge difference in your egg nest between the scenario you propose, and one where you would save more EARLIER for retirement. Then it truly becomes a personal choice of what to do, but I urge you to do it with all the facts in hand. You cannot borrow your retirement but your kids can borrow for their education if they need to. With careful planning (dual enrollment, AP classes, and other programs, going to a state college close to home if possible, working through school, work-study programs, and more), there are ways for children to go to college without it costing an arm and a leg or even without costing them anything at all. It's definitely worth investigating. Good luck!

    1. We have a very nice nest egg already. We have been investing for 20+ years. We are not taking out student loans for our youngest 2 kids. My son goes to a local state school and lives at home. He also works part time and contributes to his costs. We are looking at state schools for our youngest daughter also. Her grades are amazing and she did wonderful on her SAT's. Private schools want her so if they show us the money they can have her. otherwise she will go to a state school too. She also has some money set aside for college. All of our kids took AP classes and received credit for them. When our oldest was going we didn't know about Dave Ramsey and we took out student loans, She is working very hard to get them paid off as quickly as possible. We have already paid off the parent plus loans. I do not want that for our other kids. All of our kids work through college.
      I have run the numbers many times. I'm choosing to give our kids this help. We will be well off in retirement. We are putting more then most people I know into retirement. By not eating out, shopping sales and second hand, living below our means we are able to do both.

    2. I'm a little confused. Which is greater, the interest paid monthly on your mortgage or the interest gained with your savings? Wouldn't it be better to pay off the mortgage sooner to save that interest and then have the amount of the monthly payment toward everything else?

    3. My mortgage rate is 2.75%. I'm not sure what savings you mean. If you mean the 401K plans we would be heavily fined for early withdrawals. The compound interest on those accounts are working to our advantage. If you mean our Emergency Fund then the mathematical thing to do would be to use that money to pay off some of our mortgage. We have no where near the amount in savings that we would need to pay off our mortgage. But I would rather have the emergency fund and not need it then to need it and not have it.

      When we retire we do not want any loans . We will have no mortgage payments. That way we can live on a lot less money. I hope that explains it better.

    4. I was thinking of how you are putting everything possible into different types of savings; college funds, 401K, emergency funds, etc without putting some toward the principle of your mortgage. I wasn't saying pay it off with what you have already in savings. Only that putting a little at a time into paying down the principle of the mortgage is the same as it going into a savings account. Sorry, I'm not explaining very well.

      I guess what I'm saying is that paying a little extra toward the principle of a mortgage is like putting money into a savings. What I did with my own mortgage from the very beginning was to pay an extra $5 a month toward the principle. Later when I could afford it I started paying an extra $10 and then $15 and so forth. No matter what I had to do without; putting even a tiny amount toward paying off my mortgage every single month was lowering the amount of interest I'd have to pay. My interest rate was 8 1/2 percent on the mortgage but I could only get 3 percent gain on a savings account. I had a very high interest rate because I bought in the poorest part of the city. So, for me, paying on the mortgage was giving me a greater gain than a savings would have given me. I hope I explained it better.

    5. OK, sorry for the miscommunication. Right now we really don't have extra because we are trying to cash flow college for our kids. Anything"extra" is going to that because we will have 2 in college in a year and a half. I am stockpiling the money right now to see what the costs will be when they are both attending. As soon as we know that then we will start attacking the mortgage. It may only be $10 extra at the beginning because that might be all we have. If we over save on college costs(does that ever happen) then we would put it right to the mortgage. If our plan works out the way we have it set, our mortgage will be paid off when I'm 53. I would be very happy with that.

    6. Thanks, I understand your plan better now.

  2. The only thing about saving after the kids are done school, is that so many parents lose their good jobs after age 50. (Like me)! Wish you all good things! ldc

    1. We are currently saving 15% of our pay. I'm sorry you lost your job. My husband is in IT and thankfully that is a very good career.


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