First Person: I Should Have Kept That IRA

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While living in Utah, I was not only able to cover my living and education expenses, I was able to sock away enough money to pay for trips abroad and other big ticket items. It was easy to save money because the difference between earnings and expenses made it possible.

California Dreamin' Reality

Alas, I bought into the mythology that I would be financially better off if I moved to California. Better jobs and better pay. In the Sixties, perhaps this was true. My cousins who moved there at that time certainly improved their bottom lines. Irony was about to kick me in the pocketbook, however.

By 1979, inflation took over America's, and certainly California's, economy. Everything from gas to groceries to housing increased at rates that left many wallets shrinking.

One could probably say my biggest financial regret was moving in the first place. What I gained in social and cultural growth didn't keep pace with the difference between my earnings and expenses. With every penny allocated to living expenses, there was nothing left over for savings.

A Culture of Thrift

I grew up in a culture of hard work and thrift. While I didn't inherit the hard work gene, I got thrift down to a fine art. The habit of putting aside a small bit every paycheck enabled me to do many things without relying on credit. And what debts i did incur I could pay off quickly.

One Sunday School teacher led by example when she told us how she and her husband always paid themselves first. When the paycheck arrived, they put one dollar in a savings account before allocating the remainder to their bills.

One dollar didn't sound like much, but in the Sixties and early Seventies, a dollar still held value; and saving a couple of dollars each month added up over time to something substantial.

That was the actual bottom line. By socking away a small amount consistently over time, a nest egg would grow significantly. That rainy day or, indeed, retirement would not be the problem it now presents for millions of Baby Boomers. (Even in the Sixties, people didn't put faith in Social Security as the only retirement fund.)

The Depression Era Formed Habits

No one taught me more dramatically about saving than my father. I once accompanied him when he bought a car through a private sale and watched, in amazement, as he counted out 25 100-dollar bills on the man's coffee table.

When my father died, we found nearly $30K in cash in a wallet and cash box sitting on his dresser. His room was such a mess that these two items nestled among the rest of the debris. He had a fortune hidden in plain sight.

With these memories and life lessons nagging at me, I had to return to my old savings habits. With money so tight, though, I knew I'd have to sock it away in a place where I couldn't see it or get to it easily.

My dad hated banks and the stock market, but I couldn't follow his Depression Era system of putting money in a sock, or a wallet and cash box, for that matter. I pushed his warning voice out of my mind and opened in IRA account at a local bank.

Old Habits Die Hard and Pay Dividends

Each time I got paid, I cashed my check at that bank, putting a tiny amount in the IRA. Back then, the interest rate was higher than bank rates are now, closer to five percent rather than .01 percent. After I got a better-paying job, I increased the amount going into the IRA.

By the time I married a year or so later, there was almost $100 in that account. Not much, but at thirty-two, I was amassing a retirement nest egg while my employment only paid minimum wage and no benefits except FDIC.

Had I continued that savings plan, I would have several thousand dollars right now to suppliment my Social Security! Life and love, however, derailed my plans.

Paying into a Partnership

Money continued to elude me and my husband as we struggled to pay bills. Debts climbed and the pressure induced us to cash out my IRA and his stocks. It was enough to pay off a bill or two. In a flash, though, that year or two of savings vanished. It's been difficult since then to save at all.

Thirty years later, we're in much better financial condition. I started receiving Social Security as soon as I turned sixty-two, just so we could use the money for bills. If I live to a hundred, I may regret that move as well.

Now, I'm only bringing in $582. If I had waited until seventy, I could have had a SS payment over $700. Then again, tomorrow I could be hit by a bus. That's the dilema of one's Social Security decision. There are too many unknowns.

A New Savings Plan

Nevertheless, as soon as I retired, I opened a credit union account. Every month, I sock away that $82 and $500 goes to the house account. It gives us some breathing room and I feel, after many years without full-time work, that I'm contributing financially to the household.

With interest rates so low, the stock market so edgy, and many other savings plans unable to guarantee stability and value against inflation, it almost makes sense to throw money in a sock. And while there's no interest or investment growth, you don't lose the principal.

That can happen when investments can no longer pay dividends and deny the client from cashing out the account. We inherited such an account and our hearts sink as we watch the principal dwindle each quarter.

As long as I keep putting away a little bit each payday, doing it consistently and over time, I can grow a retirement fund to use later. I wish I'd stayed with that IRA, though. It was such an easy way to save. Who knows, maybe it would have held its principal value as well as the money I've got in my socks.

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