When John first entered the work force in his early twenties, he made a modest salary as a truck driver. Yet he always managed to put away 10% of his paycheck into his 401(k). According to several studies, including a recent Mac Kensey Report, America’s 77 million baby boomers aren’t saving enough money for retirement.
With social security being shaky and employer-financed pension plans in decline, John
encouraged his co-workers to make change in their behavior and expenditures in order to
save money for their latter years.
Helen, his wife, is a former IBM worker. When her employer decided to slash
the payroll, she was given a voluntary separation package which sent her
to early retirement at 57.
” I don’t buy the argument that folks can’t afford to save for their retirement”, says Helen who
observes that they did mysteriously have enough money for cable/satellite, a fancy cell phone, weekly manicures, scratch lottery tickets, and so on. She believes that they could have easily cut out those luxuries and put away a few hundred bucks per month in their retirement accounts.
There is no need to take her words for it .Helen and John lead by examples. They don’t eat out 2 or 3 nights a week, except on special occasions such as Christmas and family birthdays. They sold out their expensive Lexus to rely on a less costly Chevy for their transportation across Charlotte. More than anything else,they value their card membership at Sam ‘s Club and B J’ s where they usually go for all sorts of shopping.They even worked on improving their home’s energy efficiency.
Furthermore, the couple canceled several features on their cell phones and kept only the basics : no more call waiting, no caller ID, no call forwarding and no more three-way calling. Since they usually make a lot of directory-assistance calls from their cell phones, they often dial 1-800-466-4411 to get the desired listing for free. With laughter, Helen brought up a second number where the caller is required to listen to a short ad before getting the number. All these strategies allow this family to save more than 10% in avoiding unnecessary expenditures.
Indeed, Helen and John are fully aware of the fact that they may spend more time in retirement than they ever spent working. As a result, they put aside an emergency fund for the rainy days. Neither John nor Helen won’t tell you exactly where they keep their money but they advise everyone to have a CD or money-market fund where they can get access to it at anytime without penalty.
” Saving and investing offer the best chances for a stress-free retirement ” , John said. As a matter of fact, the couple is part of an automatic investing program, giving full authorization to their bank which transfers a fixed amount every month from their joint bank account to their investing fund. Finally, Helen who apparently saved the best for last released with a smile those powerful words ” It’s never too early or too late to work on a retirement plan”.
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