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!