1. How old are you?
53 (retired at 52)
2. What’s your marital status and/or kids?
(Re)married, with a 30 year old daughter.
3. What’s your biggest source of income? How much per year?
Currently, the husband’s income is our only salary. He plans to retire within the next two
years. But it’s important to me to note that when we got married, I had the bigger income
for a while. I don’t want people thinking I got to this point just by marrying rich!
My work history was that I went to college, then enlisted in the army. After I got out, I
was a stay at home mom for a while, then I was called back into the reserves and we
lived off that and my ex’s college fund for a while. After we split up, I got a civilian job
with the Department of Defense making almost $30,000 a year, and felt like I’d hit the
jackpot! After a few promotions, I was making $50,000, then switched to a defense
contractor job making $80,000. I left to follow my passion, teaching, and had to restart at
about $30,000 a year, and had maxed out the pay scale at $50,000 when I retired.
My husband stayed with Department of Defense, and his salary has climbed to about
$120,000 with locality pay. Some days I cringe knowing that’s where my salary would
have been if I hadn’t quit that job. I don’t have any regrets, but I am very aware that for
every one year of salary at my old job, I had to work 2 ½ years as a teacher.
4. What’s your current net worth?
5. How is your net worth divided?
- $12,000 Cash (checking account)
- $226,000 Home Equity
- $256,000 Home value
- $30,000 remaining on mortgage
- $439,000 non-retirement investments
- $14,000 Vanguard 500 Index Fund
- $13,000 Vanguard Balanced Index Fund
- $14,000 Vanguard Large-Cap Index Fund
- $19,000 Vanguard Dividend Growth Fund
- $7,000 Vanguard Energy Fund
- $14,000 Vanguard Long-Term U.S. Treasury Fund
- $5,000 Vanguard STAR Fund
- $164,000 Vanguard Prime Portfolio
- $33,000 Vanguard Wellington Fund
- $13,000 Vanguard Extended Market Index
- $13,000 Vanguard Growth Index
- $12,000 Vanguard Small-Cap Index Fund
- $22,000 Vanguard Long-Term Investment-Grade Bond Fund
- $41,000 Vanguard Total Bond Market Index Fund
- $26,000 Vanguard Intermediate-Term Investment-Grade Fund
- $20,000 Vanguard Short-Term Investment-Grade Fund
- $10,000 Vanguard Short-Term Corporate Bond Index
- $897,000 Husband’s Retirement Total:
- Thrift Savings Plan (Federal Government):
- TSP C Fund $175,000
- TSP G Fund $196,000
- TSP S Fund $107,000
- TSP F Fund $126,000
- TSP L2050 $260,000 (Ear-marked for long term care)
- Vanguard Roth IRA:
- Vanguard 500 Index Fund $8,000
- Vanguard Mid-Cap Value Index Fund $4,000
- Vanguard Total Stock Market Index Fund $12,000
- Vanguard High Dividend Yield Index $4,000
- Vanguard Value Index $5,000
- Thrift Savings Plan (Federal Government):
- $718,000 My IRA’s
- $681,000 Vanguard Target Retirement 2035 Fund (IRA)
- $37,000 Vanguard Total Stock Market Index Fund (Roth IRA)
6. How and why did you begin saving and investing? Is there something that initially triggered
your interest/motivation? How have you continued to learn?
I was lucky - I learned both budgeting and DIY skills from my parents at a young age.
When I was in middle school, instead of just buying my clothes outright for me, my
parents gave me a clothing budget of $300 per year, which had to cover new school
clothes, things I outgrew or wore out, winter coats, etc. If I had money left at the end of
the year, I was allowed to roll it into the next year.
My mother was into vegetable gardening and foraging for berries and taught me how to
process and can food. My parents had no sons, but put me to work on projects that a
pre-teen girl would normally not be involved in, like reroofing our barn. Later as a single
mom and homeowner, that gave me the confidence to buy a ladder and tar paper and fix
the leaking roof over my back porch myself.
7. Have you used a financial advisor? If so, why? If not, why not?
I have in the past. When I switched careers, I moved to a job that had no tax deferred
retirement plan. Incredibly, no other employees cared enough to push for one. I went to
the board of directors with an outside financial advisor and with my urging and his
technical knowledge, we got it set up.
8. How has your portfolio allocation and investment strategy changed through the years?
I don’t think it substantially has. All along I’ve been investing in various funds, not
individual stocks, to reduce risk, and I’ve kept it primarily within stocks, not bonds. I am
not one to watch the market and get stressed through its ups and downs. I’m more the
“stay the course” type of investor.
9. Do you plan to change your portfolio allocation in the future? If so, how and when?
No plans to change what I’m doing.
10. What mistakes have you made along the way?
I had a few job changes and kept moving my retirement accounts to the new jobs to
keep everything simple and consolidated for myself. I was afraid of losing track of
accounts at multiple companies. I should have worried less about multiple accounts, and
more about what the fees were at each investment company. I hate to think how many
thousands of dollars my “keep it simple” strategy cost me. An extra line in an excel sheet
11. What advice would you give a 30 year-old? What do you wish you would’ve done
A. Don’t start a new investment account without finding out what the fees are. Picking one
company over another could cost you tens of thousands of dollars.
B. If there’s a retirement benefit or plan that you wish your company offered, don’t passively
accept it that it isn’t an option for you. Be proactive, find out if you can help them change
or add the benefit - especially if it’s employee funded accounts and their only expense is
just administering it.
C. Take the time to understand what your other company benefits really are. After we got a
403b plan set up at my job, I began maxing it out and wanted a 457 set up as well. The
board didn’t go for it, as it would have been set up really just for my benefit, nobody else
was dumping that much money into their retirement accounts. A few years after that
failed attempt though, our state benefits changed and we had accounts with a small
default deduction from our paychecks toward retirement health care. I called the
company who managed those accounts - and found out it was technically a 457, we
were allowed to contribute far more than what was automatically deducted, and the
money in that account could be used as a normal 457, it didn’t have to be used for
health care! Nobody told us this! I started dumping money to that account as well, and
eventually got my biweekly take home pay down to just under three dollars, with the rest
going to the 403b and 457, and being a two income family we didn’t need my paycheck
to survive. Meanwhile my husband was maxing out his contributions, but he only had a
401k to contribute to, he wasn’t able to double dip in the same way that I was.
12. What are your current plans to grow and maintain your net worth?
We’re planning to live off the interest on our investments until we’re old enough to draw
on pensions and social security, at which point we should have solid income again of
about 80k a year. The big unknown is how much health care costs will increase. We’re
setting aside our own funds for that, but if the costs of insurance and care continue on
their current trajectory, we may be able to live on the pensions and interest until our 80’s
and then have to start tapping into our actual savings.
13. Any specific books/products you recommend?
I liked the Millionaire Next Door. Part of the appeal may have come from the opening
chapter where it’s mentioned that the people who tend to be the best savers are school
teachers and engineers. As a public school teacher married to an engineer, I was
hooked right there.
But beyond that, I think it’s a great book especially for people just starting out as adults.
That’s the ideal age to begin making conscious choices about what we want because it
improves the real quality of our lives vs. what we want for the purpose of impressing
other people. It’s a good read for understanding how a product (a new car, for example)
might make our lives more enjoyable in the short term, but in the long term can reduce
the quality of our lives by increasing chronic stress over debts or whether or not we can
ever afford to retire.
If you'd like to be on the show, or complete a written blog interview, please fill out the form below and share a rough breakout of your net worth and a brief explanation of your story.