Retirement Rant

I am only 26, but I have already been thinking about and planning for my retirement for many years. Since I started my career at such a young age (19) I am very much looking forward to my golden years when I won't have to work, or can work very minimally. We will call this my "30 Year Plan".

For the 5 1/2 years I worked at OU Medical Center I had a 401k that I contributed to. Keep in mind that I can't contribute a whole lot since I am the sole wage earner right now. By the time I quit working there, I had almost $10,000 to rollover into a new account! I chose a traditional IRA that I will not be touching so that the money can just sit there and earn interest.

At my current job my position is not eligible for the benefit of a 401k so chose to open my own individual IRA which I contribute to with monthly automatic deductions. I chose the company T. Rowe Price for this because of their ease of account startup/use, no annual fees, and good reputation. Of course whenever Nick is able to get a good job I will greatly increase the amount that I contribute every month. When tax time comes I will be able to use my contributions to this IRA as a deduction for the year!

I also have an online savings account that I contribute extra money to frequently, like extra paychecks or tax returns. Right now I am saving for a goal of $10,000 to use for when we move out of state--only $3,000 more to go! It is an interest-bearing account (not much since it is just a savings account, but still one of the highest on Bankrate.com that doesn't have any fees) so the money isn't just "sitting there" being useless. After we move and get settled I will continue to contribute any extra money into it with the intention of it being in line behind my two IRA's for retirement savings.

For the last almost 10 years Nick and I have pretty much lived solely on one income so I have the hope that we can do the same with our retirements. Even though he is older than I am, he has not put as many work-hours in as I have which means his Social Security dispersements will be lower than mine, and he does not have an IRA in his name. This leads me into the next part of my retirement plan....

A lot of people might be confused when they are trying to plan for how much income they will need in their retirement years. It makes sense that in our younger years up to middle age we would have more expenses e.g. college, cars, children, credit cards, house. But the wise person will start planning at a very early age to only have a few or NONE of these burdens upon retirement! It's not uncommon to rack up a lot of student loans or credit card debt in your 20s, but hopefully after 30 years you would have learned your lessons and gotten rid of it.

My plan in 30 years is to have my house paid off or very near to it, and to have no other debt to my name. I got rid of any credit card debt a couple of years ago, and I paid off my car early last year so neither of those are problems right now and I hope to continue that. In 30 years my children will be grown and God-willing not living with me, and we never had to use student loans.

My hopes are that if we follow this plan and continue with our savings, frugalness, and simple lifestyle then when retirement age is nearing we will only have our living expenses and healthcare to pay for. I am very glad that I started an IRA at an early age because that means there are more years that I will be paying into it, which means more interest will be earned than someone who waited until much later to do it. Even just contributing a small amount early on is better because that starts the ball rolling on compounding interest.

So now you know my plan; do you have one?