Why I'm Retiring Late Part 2 Savings


I spilled my guts about one of the reasons retirement is going to be later rather than on time: I have debt (see the ugliness in Part 1). Yet it’s not only debt that gets me behind. I need more savings.

Why I Can’t Retire Early: Not EnOUGh Savings to Retire

Some people have enough money saved from a retirement plan at work, like a 401k. Some people have enough money saved from an individual retirement plan, like an IRA. Then there are those of us who have saved “some” money.

In other words, there’s not enough to live on for who knows how many years of retirement (wouldn’t retirement planning be so much easier if you knew the exact year you kick the bucket?).

Here are possible ways to have enough money for retirement:

  1. Pensions: you work long and hard at a job and you retire with a percentage of your regular pay (100% is nice!).
  2. Employee retirement accounts: here’s where 401(k)s, 403(b)s, RRSPs (Registered Retirement Savings Plans for Canadians) help most of us save up a big chunk of change. Not all employers offer these, but if they do, it’s a great way to retire with enough money. You have to contribute regularly, but over time your funds can build to something big enough to help you survive retirement.
  3. Government pensions: In the United States we have Social Security (SS). Australia has the Age Pension. Canada has the Old Age Security (OAS). The U.K. has the State Pension. These retirement funds are for anyone who reaches a specified retirement age. 
  4. Continue working: this is happening for a lot of older workers. Whether you continue to work full time at your current job or if you take on a new part-time job to bring in more money, working later is something that can help you with affording to retire from a full-time job.

My Current Status

So I have debt, but I have a home. I have a mortgage, but I have a decent salary. Oh, and my job comes with a 403(b) plan. A 403(b) is the public sector version of a 401(k).

Pension Silliness

I started working for this organization back in the 1990s. Employment at this organization comes with a state pension. If I worked long enough at this place I could retire with a payment that is half of my regular pay. Wow! I’m set.

What happens if I agreed to NOT be on the state retirement plan?

Um…yes, you could do that. Why would you do a silly thing like that? I was offered a doubling of what I had saved to that point for retirement if it all was put in the 403(b) and I signed away my expectations for using the state retirement system.

Yay! I had an instant increase in my savings. At the time I had $30,000 or so, and now I had $60,000. This was a sign I would retire with plenty of money.

My Old Intelligent but Outdated Plan

  1. I’d eventually be able to increase my withdrawals to get the employer match of my paycheck deductions, 
  2. Then later I would surely have enough money each paycheck to deduct from my paycheck the amount that meets the annual maximum allowed for my 403(b).
  3. Then by the time I retire there would be up to the million or so dollars in that flush retirement account.

That was an intelligent plan, and it was one that allowed time to be on my side. What happened to that intelligent plan? Um…that plan failed. Only one of these things happened: I eventually got around to deducting the maximum of my employer’s match on the account.

Oh, and of course the returns in the stock market averages 7% annually. Riiiiight. How many stock market crashes have we had since the late 1990s? Yes, some years were good, but boy, when it goes bad, it goes real bad.

My Savings

So, since sometime in the late 1990s, I’ve saved up close to $170,000 in my 403(b). I’m still not maxing out what I could save in the 403(b) each year (remember that pesky debt interfering with my money flow?).

As for regular savings, I have an emergency fund of $1000. I also have money saved for various needs. My old truck needs its repairs to keep going, so I’ve saved about $1000 for some upcoming maintenance. There are home repairs, pet costs (vets and grooming), and Christmas that take up a lot of my funds in savings. I also have enough saved up to pay the bills for next month.

On the bright side of my savings woes, I’ve improved my finances enough to save up more money while also paying down my debt.

Debt payments vs Saving for Retirement
More debt than savings at this point

Where I Stand Now

Though I’ve done great paying down on my debt the last six months, I still have almost $30,000 in consumer debt. I also still owe over $200,000 on my mortgage.

I have about $170,000 in my 403(b), over $1,000 in my designated emergency fund account, and another $4,000 saved up for various sinking funds and next month’s bills.

There isn’t enough to spare to put more in any retirement accounts. Not yet.

What About You?

Are you also looking at your retirement funds? Did you start earlier than me and saved more regularly? Or have you barely started on saving money in any kind of retirement account?

I would love to hear from you. What can we work on together to help us succeed with our retirement planning?

Who else is retiring later than hoped due to not enough savings to retire?


Debt and retirement

Retirement? Who Me?

Once upon a time, I never thought about retirement. Retirement was some vague idea that I would worry about…later. Well, later is here. Now I have to worry about it.


You can’t retire early if you don’t plan early. You can’t retire early if you didn’t save or invest money early. Simple concept, huh? Yet how many of us never applied that simple concept to our finances?


Some of us barely get by on a slim paycheck and have nothing to spare. Some of us are hit hard by medical expenses, divorces, job losses, or untimely deaths in the family, and this hurts how much we can set aside for the future.


So, why am I late?


There are two main reasons why I can’t retire soon:


  1. Not enough savings
  2. Too much debt


I have some excuses: I live in an expensive town (it’s a place where wealthier people than I have second homes). Housing is expensive. Gas is expensive. Yet I love this place.


But it really hurts my retirement plans, as my style of living created a monster I live with on a monthly basis. Welcome to the Debt Monster.


The Debt Monster


Debt and retirement don’t work well together. It delays our retirement. An article in USA Today tells me that I’m not the only person carrying debt into their older years, as it states:


“The National Foundation for Credit Counseling (NFCC), which helps people who are having trouble paying their bills, says one-third of its 3 million clients nationwide last year were 55 or older, up 7 percentage points in two years. Nearly 15% are over 65.


These are the years when we should no longer have debt. Our mortgages should be paid off by now, or be close to being paid off. But no, debt is a monster.


The USA Today article also includes this lovely tidbit:


American Consumer Credit Counseling, which says 25% of its clients are 55 and older, paints a similar picture. Seniors are going into retirement still carrying debt, including mortgages, credit card debt and student loan debt. They are depleting their savings and retirement accounts just to make ends meet.

“Seniors are not able to retire when they are eligible to retire because they can’t afford to make ends meet,” says Katie Ross, education and development manger at ACCC. “They are still paying student loan debt off for their family members.”



So What About Me?


My debt monster requires over $1000 per month in care and feeding of consumer debt. It’s been a mean monster that I sometimes tame, but more often I rile it up and make it bigger.


How did this monster enter my life and stick around way too long?


Let’s just say that I hated the word “budget”. My whole life is one of spending too much on unneeded things. How many pizzas does a gal need delivered to her on a weeknight? Obviously, for me, a lot.


Years ago I shared a house with a boyfriend, but when he died, it was up to me to come up with the monthly mortgage. That full mortgage and extra consumer debt led to a second mortgage.


I could do it, but my savings stayed small. Shoot, having over $300 in savings was a reason to celebrate. I could have sold the house, but with dogs and a cat, finding anything cheaper wasn’t happing in the town I lived in.


I had a credit card or two…or three. When I couldn’t afford something, I charged it. My thinking at the time was that I just HAD to have that item (sometimes that was true when the truck needed a repair) and that I’d really pay down the credit card later when money wasn’t so tight (yeah, that sound you hear is the sound of me rolling my eyes at my thinking).


Money was always “tight.”


Isn’t it funny how much you get paid makes a difference on what you can afford? Well, duh! What I make now would have really helped back then, but I struggled on that decent past salary. I struggled enough that I eventually had to sell the house before it was taken away from me.


I barely broke even on the sale.


On the bright side, I no longer had a first and second mortgage to pay on monthly. On the dark side, I still had collectors calling for my late credit card payments. And now I had to find a place to live.



The Hillbilly Shack: Good Times


Luck was with me. A rental that allowed dogs –and even had a doggy door—was available. I grabbed it. From a two-story home to a 600 square-foot rental led to plenty of tears. I couldn’t fit everything into the place. I rented a storage unit. Yes, another monthly cost.


Yet downsizing like this, and having such bad credit, helped me finally pay down most of my debt. The bill collectors stopped calling. I stuck with my truck, which was paid for from late boyfriend’s insurance. There would be no new car for me (I still drive that truck—it’s older than most college students).


Living more within my means helped a lot. Also during this time, I was promoted once or twice and eventually earned the money to live more comfortably. I still lived in the rental I fondly called the Hillbilly Shack.


If you saw it, you would understand the name. The roof was metal and the outer walls had wood shingles that looked like they could blow away in a slight breeze.A woodpecker would nest in one of the outer walls each spring. The outside hadn’t been painted in years, and the fenced yard was chicken wire. The interior walls AND ceiling were covered in wood paneling. The wood stove didn’t look safe to use, and the linoleum in the kitchen and bathrooms was stained and ugly. It also had TWO closets, and both had NO doors. It was home sweet home.


This place helped me improve my financial health.


I eventually paid a big chunk of the credit cards down to a range that would allow me to start saving more. I now had a baby emergency fund of $1000. Life was good. Then the financial crash in 2007-2008 hit.


I survived it.


With not owning a house that had an underwater mortgage and having a job that I didn’t lose, I actually did okay.


Now don’t get me wrong. I still had problems living within my means, but my costs were low enough and my salary high enough that I wasn’t scrambling every month to pay for things.


And that financial crash? In a town where the average house cost over $300,000, people were hurt badly by the crash. Home prices plummeted and there were a lot more on the market.


Can you tell where this is going? Yep, I bought a house.


Mr. Mortgage


Yes, I bought a house. That was when my debts were low, my credit repaired, and I only used one credit card. I qualified for a good VA mortgage, and I found a house at a much better deal than they had been previously, before the Great Recession.


Of course, with a house came new opportunities at spending money. Instead of continuing to pay down that one credit card, I increased my credit card debt. I needed some new household items. I needed a couch. Really—I had a stinky old loveseat that I was not going to move from my stinky old rental.


Still, did I have to buy a new one? IKEA may be relatively inexpensive, but it was an expense that I couldn’t cover from my savings.


Savings in my case was a baby emergency fund that I kept at $1000. By the time I used my VA Loan option to buy an older ranch-style home, I had little left in cash savings.


What I did have was a 30-year mortgage for a single woman in her late 50s. Who says I’m afraid of commitment?


Then when my card limit was high, I opened a loan to consolidate my debts. Great! Lower interest helped. That Debt Monster was pacified and was tamed. You can guess what happened next. Yep, I charged up again on my credit card. Now I have both a loan payment at $500 a month, plus my credit card payment.


Next smart move was opening a zero-interest credit card and transferring a big chunk of my existing credit card balance to this new card. No interest was a smart move, but guess what you shouldn’t do.


Yep, I charged up my original credit card again.


Consumer Debt


Adding the loan, the two credit cards, and the interest I’m paying, I currently using over $1000 of my take-home pay on debt payments. Most of it was stupid debt–the kind of “I’m eating out tonight” and “I’m buying this outfit” debt. There were decent uses of debt: “I need the tree guy to come out and trim these trees that haven’t been trimmed in years, and, oh, it costs a couple of thousand dollars? Gulp…okay.”


That’s why I owed over $35,000 in consumer debt. Ouch.


I never could get ahead to put more in my retirement. With over $1000 a month in credit payments, I barely had enough to pay for my regular expenses.


I always joked that I would be retiring when I’m 90, and it’s this debt that is why. Debt and retirement do not get along.


There is Hope


Yet, I’m feeling hopeful. I’ve decreased this debt by changing my money-handling ways. In the last six months I lowered my consumer debt total to $29,000. That’s $6,000 in less than six months.


If I can get the consumer debt paid off in the next two years, I can cut the amount I need to save for retirement, as my monthly expenses will not include that $1000 needed every month for debt payment.


I can then save more aggressively. I can pay down my mortgage more aggressively. Shoot, if debt and retirement don’t get along, the I need to kill this Debt Monster. Then I know I can retire.


Here’s to monster hunting!


The word Debt being erased
Can I erase my debt before I retire?

I’ll take a late retirement over none at all…


Ack! I missed the window on retiring early. I’m one of those baby boomers who is bumping up against reality. The dream of retiring early, or even retiring on time doesn’t seem likely. Retiring later is a necessity.  


Happy beach goers
How I pictured my early retirement


MetLife surveyed baby boomers in this 2013 study.The survey showed that “…fewer than one in 10 currently working oldest Boomers think they will need to retire later than planned and 13% currently think they’ll be able to retire early.

Well, that’s not me. I KNOW I will retire later, but the question is HOW LATE?


Seven percent of us


I’m not the only one. According to that MetLife study:

“Just 39% of working oldest Boomers believes they will be able to retire when they plan to; 13% believe they will retire earlier and only 7% think they will need to retire later than planned.”


I’m one of the 7%! Hmmm…maybe I should call this blog “The Seven-Percent Solution.” 

Nope. Sherlock Holmes’ seven-percent solution is not the solution I am looking for!


I’m now in my late 50s and wonder what it will take to live comfortably in my later years. Sure, I have some savings, but is it enough? NO. Well, not yet. And that’s what I need to figure out in the next few years.

  • What do I need?
  • How much can I save?
  • What expenses will I have?
  • Will I want to work at all after I retire from a full-time job?
  • What else should I do to prepare for retirement while I have the time?

I think I can do it. Not only am I planning to pay off my debt, I am planning to have the amount of money I need to live comfortably when I retire. Plus, retirement is not just about money, but what to do after I stop working a full-time job.


So many of us have ideas on what retirement looks like. I imagine traveling or puttering in a garden. I LOVE to putter–you know, a cup of coffee handy and doing small chores or activities around the house. I call it puttering and I love to do this on a day off. My retirement will include plenty of puttering. 


What is it going to take to retire late? 

It’s going to take me getting serious about my retirement planning. 

It’s going to take me prioritizing what I spend my money on.

It’s going to take me dealing with the money I earn now in a smarter manner.

And yes, it’s going to take me saving up more money!



Retirement and Saving street sign


Get ready for me to share where I stand now financially, what I want to do when I retire, and how I plan to meet my retirement goals. It may not be pretty, but it is a PLAN. One that I did not have until recently. 


I am no longer saving for an EARLY retirement. I am now saving for a LATE retirement.


This blog is my journey to financial health and happiness, and if it helps me retire before I turn 90, well then, whoo hoo!