First Person: We're Part of the Retirement 'Have-Nots'

Yahoo Contributor Network

According to The Wall Street Journal's, 50 percent of workers don't participate in a savings plan at work. You can count me in this group, since as a freelance writer I don't have an employer-sponsored retirement plan. However, just because I'm not getting retirement contribution matches, this doesn't mean that I'm still not working toward saving for retirement. I might just be taking a different approach to how I get there than the traditional stock market-based savings plan.

Reduce debt

According to, the average American's interest payments on debt are around $600,000 over the course of a lifetime. Paying that amount can put a huge dent in overall retirement savings and push the amount we need to earn in the course of our careers much higher or push our retirement dates back further.

This is why we've done our best to avoid as much debt as possible and minimize its effects when we do take it on. By making extra payments on things like student loan debt, our mortgage, and by avoiding credit card debt, we've managed to limit the affects of debt-related interest over time. In fact, we've paid about $25,000 in such interest into our mid-30s, are currently debt-free, and have recently gone mortgage-free. By making such moves, we hope to dramatically reduce our interest payments on debt over a lifetime compared to that $600,000 statistic quoted by and thereby have to earn and save less.

Cut expenses

Knowing how to cut costs is an art of sorts. It's not something people just know right away, and it's something that's learned and refined over time. And over the years, I've become really good at it.

From shopping resale, using lists to plan out weekly meals and grocery needs, and doing things like closing off rooms, using box and ceiling fans, and sealing leaks to cut our utility costs to using coupons when going out to restaurants, using sites like to find deals on gas, and avoiding name brands, I make reducing our expenses a sort of hobby. In the process, when we reach retirement, I hope to have the process of cutting costs down to a fine science, meaning that we can still live a comfortable lifestyle but at a minimum cost.

Extend work timeline

It's becoming more apparent that without a good employer-sponsored retirement plan, I'll likely be working later in life. However, coming to this realization sooner than later may be one of the most important aspects in this part of my retirement planning. In this way, I can begin reviewing income earning sources now, deciding what sort of work and income is best for older age, and begin building a portfolio based around this type of work so that my strengths lean toward this area or areas as I age.

Planning for work later in life can also help me with tax planning and determining income numbers that will help me cover expenses yet not unduly increase my tax burden. And in these ways I hope to be able to compensate for being part of the retirement "have-nots".

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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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