First Person: Retirement Decisions We’re Making in Our 30s

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Not all retirement decisions have to be made as we actually near retirement. In fact, some of the best and most useful decisions can actually be made well in advance to our golden years.

Thankfully, I recognized this fact early in life and have therefore attempted to make certain decisions that will affect our retirement years early on. Here are a few of those more major decisions that my wife and I have made in our 30s and that we hope will play into our hands in helping us get to a retirement that is more stable and where we can enjoy some peace of mind.

To be mortgage free

Becoming mortgage free doesn't have to be a difficult as many make it out to be. Even though we took a beating in the housing market collapse, selling our home for $65,000 less than we paid for it, we still managed to ditch a mortgage on our next go around.

By putting a larger down-payment on our first home, making extra payments along the way, and downsizing to a smaller home once we sold, we still managed to salvage enough equity from our first home to buy our second -- a smaller condo -- outright. By eliminating this cost -- one of the greatest expenses in many budgets -- before retirement, we hope to be able to stay mortgage free, entering retirement without such debt so that our expenses will be lesser during a time when income may be diminished as well.

To stay debt free

According to an infographic on, the average American's interest payments on debt over a lifetime come in at $600,000. This includes things like mortgage interest, student loan debt, credit card interest, and vehicle loans.

Our family is currently debt free. In order to remain so until retirement, we have driven older and used vehicles to avoid car payments, we pay off our credit card balance monthly, we paid off nearly $50,000 in student loan debt in under four years, and while we plan to assist our children with college, we hope to do so sharing the burden with them so that all parties have a vested financial interest in the education, not just us as parents.

To work in retirement

My wife and I both enjoy our work, so it's not a hard decision to make to continue working in retirement. While it obviously won't be full-time employment (since then it wouldn't really be retirement), we'd at least like to continue in part-time roles.

Making this decision in our 30s helps us do several things. First off, we don't have to focus as much on saving now since we plan to have continued income throughout retirement. While this doesn't mean we're not planning financially, it kind of draws out our timeframe for retirement savings. Second, knowing that we'll be working lightens the load on what things like Social Security and a retirement plan must be counted on to do in retirement. Not having to rely as heavily upon such items can increase peace of mind and spread out our retirement income streams, improving diversification of retirement income and assets in the process.

When to start taking Social Security

Many financial professionals out there these days tout waiting until we're older to start taking Social Security benefits since estimated payouts are higher the longer we wait. However, referencing a recent US News and World Report article on the subject as well as an article of my own that I wrote on the topic, let's look at a simple example of how waiting until I'm 70 to take Social Security benefits could backfire.

According to the CDC, in 2010, the average life expectancy was 78.7 years of age. So let's say I live until 80 for ease of this example.

Not factoring in cost-of-living increases, this means I'll receive the following amounts over time:

  • Benefits from age 62 to 80 -- 216 payments (18 years x 12 monthly payments) x $750 = $162,000 in benefits
  • Benefits from age 66 to 80 -- 168 payment (14 years x 12 monthly payments) x $1,000 = $168,000 in benefits
  • Benefits from age 70 to 80 -- 120 payments (10 years x 12 monthly payments) x $1,320 = $158,400 in benefits

Therefore, even at this early age, we're planning to take benefits earlier than later, since upon our death such benefits won't be inherited by our children while other assets like savings and retirement accounts could be. And through such decisions that we're making in our 30s, we're hoping for a more secure and less bumpy road to retirement.

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The author is not a licensed financial professional. The information provided in this article is for informational purposes only and does not constitute advice of any kind. Any action taken by the reader due to the information provided in this article is solely at the reader's discretion.


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