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Budgeting in the Retirement Stuff


The following is a guest post from Crystal at Budgeting in the Fun Stuff, where she writes about finding the balance between paying your bills, saving for your future, and budgeting for the fun stuff along the way.

For anybody who hasn’t met me, my name is Crystal and I’ve wanted to retire since I was 12 years old. I just thought my grandparents seemed to have the right idea – volunteer work and hobbies during the week, dominos and board games at night, and tons of travel spread all over the place.

That seems like the life for me.

I understand my grandparents had to wait 35 years to get to that point and even then they were very lucky. 8 kids made it hard to afford retirement, but they lived frugally and invested well. My husband and I are 28 years old and are trying very hard to rush that whole savings process.

My Definition of Retirement

Before I get into how we are saving for retirement, let me define it. In two words, financial independence. My ideal retirement is when I hit the point in life where I can afford the life I want without having to go to work.

I may still work through blogging and my husband may still want to keep his hobby job of sports officiating, but I generally just want all of my time to be my own. I’d like to bump up my volunteer hours, have the time to pursue my hobbies even more, and be able to visit friends and family whenever we’d like to get together.

How We Save for Retirement

As I quickly went over in my Best Financial Advice, my husband and I save for retirement as follows:

  • My 401(k) – I contribute 6%, which is matched with another 6%
  • Husband’s Pension – He automatically contributes the necessary $100-ish a paycheck.
  • Roth IRA – We put in the maximum $5000 a year.
  • Stocks – We have a Scottrade account and invest at least $2500 a year.
  • Cash – We put at least $500 a month away into an ING savings account.

Overall, we save 30% or more a year for retirement. We will probably work until my husband can take his full pension at age 52 (30 years of teaching and being a school librarian), but that’s our personal line.

By that time, 24 years from now, we are shooting to put together enough within all of our other retirement accounts so we will not have to work ever again. Even if we keep our hobby jobs for the fun of it, that money would just be icing on the cake. Anything we may get from Social Security would be extra too.

How do you define retirement? How do you save for your retirement goals?

retirebyforty> I envy Chrystal for knowing she wanted to retire early since she was 12. I was in my early 30s before I came to the same conclusion. Saving 30% of her income is a huge accomplishment!

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{ 17 comments… add one }
  • LifeAndMyFinances February 14, 2011, 4:32 am

    I like this plan, but I want to retire even faster! After talking with a few of my friends that have already taken some worldly trips, they always come back saying that there were quite a few old couples – all of which were marveling at the young age of my friends, wishing they had traveled when they were young. They felt that they were too old to do the physical activity that many of these trips required!

    So how would I do it!? Passive income of course. My wife and I have both started side businesses which should allow us to create a pretty good chunk of passive income within the next year. Once these income streams start rolling, most of it will get invested (either in the business or elsewhere), but some of it will be used for travel! Can’t wait!

  • MoneyCone February 14, 2011, 6:44 am

    Retirement takes a lot of mental preparation. For you Crystal, it started at age 12 – I wish we all were that lucky (smart is probably the right word!)!

    Looks like you a plan!

    • Crystal @ BFS February 14, 2011, 2:40 pm

      Thanks Money Cone! I just got lucky that I found a great spouse with similar ideas, lol. 🙂

  • Will @ HackingTheBank.com February 14, 2011, 7:09 am

    You’re doing a lot of saving there, awesome job Crystal. I think you’ll be able to achieve your goals even faster than your current plan of 52. Or, you’ll at least be able to semi-retire. You can work less hours or chose a job you’d love to do, but may not be quite the pay you always wanted. It’s amazing just what kind of income you can make it on when you don’t have debt and you pay attention to your expenses.

  • Melyssa February 14, 2011, 8:37 am

    That’s awesome Crystal. I really didn’t think about my retirement plans until my 30’s. Now my goal is to be mortgage free by 45 (or 40 if I’m lucky), and hope to retire by 50. I am currently working out the details of the mortgage part, but it will then flow into what is needed for retirement. Living in a smaller, paid off home will definitely free up more savings for retirement. And with less expenses in a smaller home, we plan to live on much less.

    Thank goodness I am done being stupid about vehicles. I sure wasted a lot of money there. We live and learn.

    • Crystal @ BFS February 14, 2011, 2:44 pm

      Yeah, cars and financing can suck out a lot of cash. I wish you the very best with your goals!!!

  • Finanzas Personales February 14, 2011, 5:48 pm

    Very well done, Crystal. And well, having a clear idea since a young age might be your key for achieving that goal early in life.
    I agree with your definition of retirement. It isn’t about staying all day in bed and doing nothing, it’s about devoting your time to those activities you find truly fulfilling. I guess for us blogging (or something related to it) could do it. For me, I’d love to start and run a financial literacy program in Peru, helping people with very basic education understand the dynamics of money in order for them to take better decisions. Being a poor country with a rapidly growing economy, many people are starting to have access to financial institutions and products but have very little, if any, financial knowledge. I think helping them might save us many future problems and give them better opportunities.

    • Crystal @ BFS February 14, 2011, 8:27 pm

      Your retirement sounds like it will be a blessing to others!

  • krantcents February 15, 2011, 7:07 pm

    Your definition of financial independence is what I achieved 25 years ago. I returned to work roughly 18 years ago, because I was bored. My explanation was I was not mentally prepared for retirement! I will try again in 6.5 years, this time I am prepared!

    • retirebyforty February 15, 2011, 8:45 pm

      That’s why I will keep busy and still do some work during retirement. 🙂
      Good luck this time Krant!

    • Crystal February 18, 2011, 7:30 am

      Good luck! I’ve been mentally prepared to retire forever, lol.

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