Benjamin, 38, lives in Newport News, Virginia, and works as an assistant professor at a local university. Even though he’s thought quite a bit about his long-term goals and retirement, he still feels like he has a lot of catching up to do. Here Benjamin shares how he’s educating himself and where he’s saving for his future.
Being an academic, I can really work as long as my mind holds out. So, I think I’ll probably work until around 70. That’s kind of where our generation is, and based on Social Security and population mortality, 70 seems like a good age to maximize Social Security and get myself to a point where I don’t outlive my savings.
As far as what I want it to look like, the hope is that our house is paid off well before that. I’ve seen some reports about needing a million dollars across all savings accounts and retirement accounts to retire comfortably, so that’s kind of my long-term goal – to get to that amount so that we don’t have to drop off too much from our current quality of life and expectations.
My hope is that over the next year I can ramp up savings and have a better understanding of where I’ll be in 30 years based on my retirement plan from the university. We have a Virginia Retirement System plan that’s part defined contribution and part defined benefits. I finally maxed out all opportunities with that, so all in total it’s something like 9% going into my retirement plan between my employer and myself each pay period.
I would also like to open a Roth IRA. Technically we’re on a nine-month contract every year, which is prorated and paid out over 12 months. One of the things I’m able to do every summer is teach additional classes à la carte. So, I’m developing classes to teach online over the summer, which would make me about the most you can put into a Roth each year. I typically teach one class over the summer, which pays for a vacation, or something in the house that needs to be done. Next summer I’ll do two classes, though, with the second class covering the Roth contributions.
I also had another job before the university for about two years, and I did put some money away into an account there, as well. I need to track that down and see if there’s something there, or if it was paid out. It was only two years, so it won’t be a ton of money, but still, something’s probably there.
At the end of the day, I’m a professor and my wife is a minister, so we’re both in professions where we can work longer if needed. I’m open to working longer if that’s needed. But I’m only at the beginning of my financial preparations. At this stage I hope to reach my goals. I just don’t know for certain if I will.
My sister-in-law works for the seminary and does their gifts and endowments. Over the holidays we usually talk shop. Especially over this last holiday, we started talking about Roth IRAs and contributions. Her advice has always been a good sounding board for thinking about options.
The university also offers educational tools for us, and I’m starting to move towards doing that. We always get emails from our benefits department. One even came out yesterday, or maybe today, and I may be clicking on a link and diving down that rabbit hole. I’d say working with a financial advisor is in my future in the next couple of months.
I think my smart money move was not taking out a lot of student loans for college and working while I was in college. I graduated with very little debt, and I chose a graduate school that provided me with a lucrative package, so I didn’t accumulate any other debt for my PhD. Being smart about where I was going, working through college and summers, and keeping debt minimal was smart.
One thing I’d like to go back to is in my 20s and take little bits of money then and start putting it away. It’s that whole idea of, the sooner your money can work for you, the longer it has to work. Even little bits in my 20s would be appreciably larger today, and appreciably larger in my retirement.
With medical advancements, that will probably keep going up. I need to be making conscious decisions now, because 30 years in the future, there’s a lot more uncertainty now with that.
I think that’s the theme for me here. Even though I’m thinking about retirement, I still feel like I’m in deep water. I don’t understand a lot of this. I need to be attached to it. The old joke is that they taught us stop, drop, and roll in elementary school, you think you’ll be on fire so many times in your life. In terms of money, I feel like I’m playing a little bit of catch up here.
