Daily Money - Meet the Retirement ‘Super Savers’

October 5, 2021

When it comes to your ability to save, what you make often matters less than what you spend. Case in point: plenty of folks making six figures spend it all and live paycheck to paycheck. And on the flip side, some workers making under $100,000 are maxing out their 401(k)s each year. That means that they’re contributing the maximum allowed by the IRS (for 2021, that’s $19,500 for those under 50 and an additional $6,500 for those 50+). Today’s featured story looks at so-called “retirement super savers,” many of whom make modest salaries. We’re not talking about minimum wage  — truly low-income workers rarely have the luxury of 401(k)s and the extra cash to contribute to them. But many of us do have this benefit, and we’re just not taking full advantage of it. Boosting your savings rate isn't about forgoing lattes or other small pleasures; it’s about keeping major expenses like housing and transportation manageable so your budget isn’t always under strain.

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Timely Retirement News, Insights and Advice

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Retire With Money Community News

Tell us a little about yourselves.

We’ve been married for 38 years. Both of us growing up didn’t have much money. We married in 1983, four years after we met. In ‘86, we had our first child. Mark got offered a part-time job at the post office in our hometown in Illinois and Jodi got transferred to the JCPenney where she worked when she was in high school. At this time, we finally had enough money to buy a house and start a retirement with both JCPenney and the post office.

Nice! Were there any surprises along the way?
 
We kept trying to save whenever we could, but it was hard with three young kids. Jodi’s grandparents owned a farm, and we didn’t have any idea at that time any money was around. They lived very frugal lives, but it seems they had trusts. So long story short, Jodi gets money from each one of the trusts. And her dad left her $35,000. Mark’s mom passed in 2012 and left a little money, too. We never expected or thought that they had this kind of money and do question why they lived so frugally.

From all of this we opened a stock account with $20,000 from her dad and saved (CDs) with the other. Mark’s mom’s money went into savings (CDs) also. We have used some of this money to pay for a wedding, and to help with college and cars for all three kids. And we did make a good profit on the stock account that we took all the kids and significant others to Mexico for a week’s vacation.
 
Since then, we have been working hard on saving in our 401(k)s and investing wisely. For the last five to seven years we have really been concentrating on how to make the most of our money and where to look for the best places for it. We have done research and put money into different accounts with our online broker that is nothing but dividend stocks, and now we’re reinvesting the dividends back into the stocks.

Smart! What are your plans for retirement?
       
We are on track to retire at 67 for Mark and 65 for Jodi. Here is the problem: Mark wants to retire at 62 because of health and stress issues, but health care is BIG. We read articles every night about retirement and even though we are ok at 67 and 65 — our advisor and his computer say our money will last — we’re just trying to do it earlier.

We hope to travel. Over the years we have been lucky enough to see lots of sites in the U.S. When we retire we would like to take all the kids and grandkids to Disney. We want to explore more areas of the U.S. and even take a trip overseas when we get Covid under control.

Retirement News From Around The Web

Despite Medicare, Health Costs Are Painful for Americans 65+
A recent large-scale survey found that 20% of Americans 65+ had out-of-pocket health costs exceeding $2,000 last year. NEXT AVENUE

What to Do if Congress Axes the Backdoor Roth IRA Strategy
The proposed change would only affect very high earners. CNBC

How to Age Gracefully
Consider A.G.I.N.G an acronym, an older writer advises. PATCH

What to Know About COVID-19 Boosters
Experts advise against mixing and matching brands. AARP

Elizabeth O'Brien is deputy editor at Money. She has covered retirement and health care for nearly a decade. A Brooklyn resident and mom of two boys, she navigates the alphabet soup of Medicare and the New York City subway system with equal ease. You can email her at elizabeth.obrien@money.com and follow her on Twitter at @elizobrien.

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