How I Did It: Real Women, Real Retirement Savings

Via LearnVest By Laura Shin ~

Americans don’t feel prepared for retirement.

In fact, according to a nationwide survey conducted by LearnVest and Chase Blueprint®, only 20% of people have a retirement plan at all.

More people are banking on working until their 80s, and a majority are looking to work during retirement. Given the job prospects for 70-year-olds, these aren’t plans so much as dreams.

We were also disheartened to find in the survey that just 46% of women are saving for retirement. What are the other half going to rely on in their old age?

Today, we bring you four real stories of women who are saving for retirement, plus the story of one woman who is already retired. Read on to see what you can learn from each of them.

Jamila, 29

How Much She’s Saved: $41,500 saved in a 403(b) and a supplemental retirement plan

How She Did It: I started saving for retirement at 22 with my first job. I was making just over $30,000 and contributed 4%. I can’t say how I first found out about saving for retirement, but I remember growing up thinking, “I want to retire early. I don’t want to work when I’m old.” My mom didn’t save when she was working, but she had a pension and just waited for it to kick in. I was determined not to be like her when it came to savings and money.

After four years at my first employer, I got a job where I was making $40,000. I was only there eight months and didn’t contribute to retirement, but the employer did. When our staff got let go, I cashed out the $2,400 in that retirement account. I had three months of emergency savings then, but I was unemployed for six-and-a-half months and went $10,000 into debt.

I began working at my current job in 2008, and immediately started saving 6% of my salary for retirement. I’ve increased 2% every year, so I’m currently at 14%, and I make almost $80,000. I withdrew $10,000 from my retirement account when I bought a condo in March. I didn’t incur any penalties since I was a first-time homeowner. I’ll put it back in February after I get my tax refund.

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Now I’m engaged and live with my fiancé. He’s not as financially savvy as I am, so we haven’t combined finances because I don’t feel comfortable with that yet. When I bought my condo, I made sure to buy it in my own name.

The only thing I wish I could do is talk with someone about investing. I have a portfolio based on my projected retirement year, but I don’t feel confident enough to create my own mix. I am proud that I’m saving at all! So many of my friends haven’t started saving or save very little. Just do it, and enjoy the benefits later.

LearnVest’s recommendation to Jamila: Take Start Investing Bootcamp, sign up for The Market newsletter and read the Investing section of the Knowledge Center in order to become a more confident investor. LearnVest Planning Services also offers a Portfolio Builder plan for beginning investors.

Olivia, 30

How Much She’s Saved: $3,500 saved in an RRSP, the Canadian equivalent of a 401(k) or IRA

How She Did It: In my 20s, I thought personal finance was something other people did. I spent most of that decade traveling—not living beyond my means, but not thinking about the future either.

After finishing grad school with student loans at age 26, I realized I needed to get more organized. At the same time, my mom, who’s now 60, was planning for retirement (my parents got divorced when I was 3) and realized she should have organized her own finances better. For instance, after her divorce, she struggled to pay her mortgage, so she was withdrawing money from her retirement account at the same time she was putting money into it—and paying taxes on those early withdrawals. She’s going to be okay because she has a pension, but she says, “I wish I had known these things sooner. Why is there no personal finance education in schools?”

When I was 21, about $20,000 USD came my way–from a car accident when I was 17. I spent a third on my tuition, a third on my living expenses during undergrad, and a third on a school program abroad and travel. Now, my mom says, “You shouldn’t have done that,” but I don’t regret it. I could make myself crazy and calculate how much interest that money would have by now, but I also know myself: If someone had said something to me about retirement then, it would have fallen on deaf ears. I do know that time is on my side, so starting now—at age 30—is better than starting 10, 15 or 20 years from now.Three years ago, she started sending me personal finance books. I don’t know what I thought before–maybe that retirement would take care of itself–but when I read them, light bulbs went off. I realized that personal finance was about taking control of my life and that money opens up doors for you. I switched to a lower-fee bank account, set up a budget, created an emergency fund and set a goal to pay off my grad school loans. I also became more shrewd about negotiating my salary. No one is going to pay me what I’m worth unless I ask for it.

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LearnVest’s recommendation for Olivia: Take Retiring in Style Bootcamp and read the Retirement section of the Knowledge Center in order to firm up her plan for reaching her nest-egg goal. 

LearnVest is the leading lifestyle and personal finance website for women.