Life and a Path to Retirement

We were able to pay almost all our bills from my salary and put a substantial part of my wife’s salary into savings and retirement savings accounts.

I joined another company in the late 70’s as a programmer/analyst and they provide a 401k plan with matching contributions. I maxed out contributions every year.

My wife and I had two boys over the next 5 years and she took a leave from her job to care for them. My job responsibilities and salary grew but we could not contribute as much into our retirement accounts but made an effort to put away as much as possible every year.

We did take vacations every year but tried to limit our major purchases. We bought a house in a great area, but did not buy the most expensive house that we could have afforded. We drove our cars for a few extra years and continued to save and invest.

Our retirement accounts continued to grow and with compounding and dividends we were on our way to a comfortable retirement.

Of course we did hit several bumps along the road including the 1987 crash, the dot com bubble implosion, the fund company we used for our retirement accounts was found to be making illegal market-timing trades and wound up imploding at which point I moved all our money to a major brokerage firm and started to buy and sell individual stocks and of course the latest downturn in 2008.

A few points related to our saving and investing. We never purchased the latest hot stock, which probably cost us in some situations but saved us in others. We invested in growth and dividend paying stocks, never penny stocks or other unnecessarily risky stocks. We never bought on rumors we heard from our neighbors and friends. We invested for the long turn. So even though the downturns over the last 35 years were stomach churning we stayed the course and recovered. And I joined a well-established investment forum when I decided to buy stocks on my own instead of buying into mutual funds.

And we had some luck along the way. We bought our third house in 2000 in an upscale area at a very good price because it needed work. We fixed it up and several years later decided to downsize since our older son moved into his own apartment. That was in 2007. Pure luck that paid off.

So here we are. I recently decided to retire at 62. My wife decided to work for a few more years.

I think that we are set for a fairly comfortable retirement with income that should carry through the next 25+ years from dividends, interest, social security and my wife’s pension.

My advice to anyone who may be interested is: save, invest and start early if possible. Make maximum contributions if you can afford it. And stash away more money once you reach 50 with catch up contributions.

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1 Comment

  1. You left off one key piece of advice, find a spouse who shares the same long-term goals. My wife and I never argue about money. While several years younger than you, we are currently in a similar position that if continues, will provide us with a comfortable retirement. This could never have been accomplished if one of us was careless with money. That said, we still have our fun because you just never know what the future has in store. It’s like being on a diet, you have to sneak a cup cake in every once in a while, or else you’ll go crazy. But, then it’s back on track.

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