I Started Saving for Retirement—When It Was Almost Too Late

got started investingIn our “Money Mic” series, we hand over the podium to people with controversial views about money. These are their views, not ours, but we welcome your responses.

Today, one woman, who hadn’t put a penny toward retirement until her late 40s, talks about how she reset her money mindset to play catch up—and how some diligent saving and investing actually let her retire ahead of schedule.

By most people’s standards, I came late to the retirement game.

The light bulb didn’t go off that I needed to start investing for my life after work until I was 48 years old. It was 2001, and I was a single mother of a teenage daughter, Hope*, living in expensive Southern California on a schoolteacher’s salary.

I was dating a fellow educator, Don*, and while on a hike one day, the conversation turned to money. He was going on and on about his personal stock holdings, his pension, how he was maxing out his 403(b) and how he owned an investment property in addition to his primary home. Then he turned to me and asked, “What are you doing about your retirement?” My answer: “Nothing.”

My immediate reaction was, “What’s wrong with me?” I always considered myself to be a smart person, a feminist even, but a man was reminding me that I needed to think about my financial future. On top of that, I was a journalist in a past life, and knew how to dig for information. Yet I had never bothered to educate myself about my finances.

How the Past Nearly Bankrupted My Future

A lot of that had to do with the fact that I was a single mom just trying to make ends meet, so I was pretty much living paycheck to paycheck. Investing for the future wasn’t part of my reality. I had also been in some tumultuous relationships that had a severe impact on my life, both personally and financially.

Prior to moving to California, I had been a journalist on the East Coast and was financially comfortable. I owned my own home, and even held some stock options through my employer. I had been in an 11-year relationship with Hope’s father that ended badly when she was a toddler, and although we never married and he never supported us financially, he sued me for custody. I became embroiled in a bitter lawsuit and sold my house, cashed in my stock, and basically went broke trying to keep custody of my daughter.

  • M

    Teachers in California don’t get social security.

    • Sara

      But she would be eligible for SS from her earlier employment.

  • Gars

    Can’t retire where you worked. Still working in “retirement.”

    Money really began to increase when it was all in one place.

    I’d suggest it was the 30% rise in the stock market that boosted your net worth. If you live 30 years, your $200,000 will give you somewhere around $6,700 PRETAX.

    I’d suggest this person is not retired. She is burned out and has moved on to a less stressful type of work in a less expensive area.

    Just sayin’

    • flours

      I agree…while changing careers to something less stressful is also a goal of mine, I wouldn’t consider myself retired at that point.

  • A

    Great Story!

  • papillon

    How did she open three separate 403(b)s? I thought they were similar to 401(k) and you can only have one through your employer.

  • San

    As a 48-year-old who hasn’t saved as much as I should have, your story is inspiring. It’s great to read about someone who started taking baby steps, which all of us can do. Thank you very much for sharing!

  • Ephem

    Give me a break! She has a pension. She barely mentions that. The $200,000 she saved is just pin money that she won’t have to touch until after she turns 70. Please tell us a REAL story about somebody who started late and funded their retirement with their savings and Social Security, not somebody for whom their 403B is their hobby money. Geesh!

    • mysticaltyger

      Ok, here’s the bottom line. If you want to retire 10 years from the time you start saving (with no help from a pension), as this woman did, you have to save about 65% of your after tax income.

  • sandar

    So all that college paid off for Hope? Is she enjoying a great career as well as doing the family thing?

  • Lewallen

    I call BS on this story. So many details that don’t make any sense. How’d you jump to dumping $1000 a month on a teacher’s salary? That’s a little more than half your monthly take home. You miraculously paid off everything in such a short amount of time while investing in all of those accounts? Did someone let you stay with them rent-free? Something doesn’t smell right here.

    • FrugalToo

      I guess you didn’t read where she got a promotion and raise over the years plus eventually moved to a retirement community that was $500 less per month then moved to TX which is much cheaper than CA.

      “To open a Roth IRA
      with one of the major providers, I needed to start with $1,000, which I didn’t have. So I opened an IRA with my credit union instead, squirreling away $100 a month. Then, I signed up for my school’s 403(b) plan, investing just $50 a month.
      It wasn’t much, but it was all I could afford at the time. My 403(b) contributions were automatically deducted from my paycheck, so I never missed
      the money.

      Long story short, it was hard to know exactly how much my investments had grown because the accounts were so scattered. I just tried to focus on upping my contributions as my salary increased. By 2004, I was putting away $1,000 a
      month, and by 2007 I had reached $1,300.

      During this time, I was also paying for Hope’s out-of-state tuition, so I had dueling money priorities. My goal was not to leave her burdened with too much debt. Getting promoted and moving into the administrative side helped; by the time she graduated, my salary had reached the mid-$70,000s.

      I also took advantage of times when I found myself with fewer bills. When I moved
      to a retirement community I saved $500 a month on rent; that “found money” helped a lot with her tuition. And after I paid off my car, I started putting that money toward retirement. We did have to take out some federally subsidized
      loans, but ultimately, Hope only graduated with $15,000 in debt, which really isn’t that bad.

      The real growth began when my money was finally in one place. I was invested
      primarily in balanced index funds that were managed based on a 2015 target date
      (I knew I didn’t want to touch that money until further into my retirement). In
      2011 and 2012, I saw more than 10% growth in my portfolio. And in 2013, it grew
      more than 13%. That’s pretty damn good.

      Initially, it didn’t seem possible to retire that early. But I was burnt out from being an
      educator, and I wanted to move to Central Texas to be closer to Hope. I crunched the numbers and figured out that I could live off my pension in Texas (but not in pricey California), and supplement my income with some freelance
      writing and consulting for my old school district.

      • dontgivetothechurch

        Still doesn’t add up. At the end she was getting into the mid-70′s, but the majority of that time she was not. She lived in California, where it’s expensive, and yet $1000 a month and then $1300 a month. That is not going to add up to $200,000 total unless you did put that away from the start, and unless you were extremely lucky (not possible to have no losses these last 5-8 years) your stocks all fell during the down years. I don’t believe this story either.

        You would have had to be putting closer to 1000 a month from the start AND making close to 10% EVERY Year to make 200,000.

  • http://nononsenselandlord.com/ No Nonsense Landlord

    You need to super charge your retirement plan. Invest in real estate.


  • wellian

    Thanks for this story. I also didn’t start saving until my 40′s. I always read that you must start young to save enough to retire (or at least achieve FI), so it is inspiring to see it can be done even as a late starter – I’m willing to be as frugal as it takes.