3 ‘Dream’ Retirements: Who’s on Track to Reach Their Goals?

Allison Kade

choose retirement lifeIt’s always fun to daydream about what we might do when … we no longer work.

If you had to choose your own adventure, what would it be? Taking a foodie tour through Europe, retiring on a beach and becoming a late-in-life surfer? It’s sure fun to think about, but then there’s the reality of sketching out a financial vision for your real-life retirement now.

We asked two couples, and a still-single guy, where they stand today—and what their ideal future might look like. Then we consulted with David Blaylock, a CFP® with LearnVest Planning Services, for his feedback on how they can keep making progress toward their dream retirements.

The key for each, he says, is flexibility: “I think they will all be O.K. because they’re willing to adjust their expectations, like being honest about the possibility of working part time while retired, or being realistic about their standard of living. I’m confident that all three of these households will be able to accomplish their retirement goals—they just have to focus on the right priorities.”

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Read on to hear exactly where he suggested they focus.

DavePThe Globetrotting Bachelor (For Now, at Least)

Who: Dave Puketza, 45, a web designer and art director who most recently lived in Brooklyn, N.Y. He recently left a long-term job and is traveling in the Philippines before returning to the States to figure out what’s next.

His dream retirement: I’d like to retire between 65 and 70. My ideal retirement involves having enough so that I don’t have to worry about covering the basic necessities—to that end, I’m not opposed to leaving the U.S. to go where my standard of living could be elevated without the extra expense. If I have kids, I would like to be able to contribute to their education, and I would like the ability to travel modestly. I have some basic construction skills, so I’d also consider owning an income property where I could serve as landlord. I’d enjoy having a little extra income, as well as the tax benefits that come with owning a rental property.

His progress so far: I made $90,000 at my most recent job, and my income at my next job remains to be seen. I currently have $40,000 in regular savings and $60,000 in retirement savings divided over three 401(k)s.

I don’t have any debt or other financial obligations, but I do have a few pending choices to make that will require funds. One is moving back to California. It’ll require thousands of dollars, and finding new work will be my most immediate concern. Add to that the move-in costs for a new place and possibly purchasing a car; I’d likely buy a used one, for which I’d be willing to spend between $5,000 to $6,000.

I’d also like to explore the possibility of purchasing a home in California in the next five years. Meanwhile, my significant other lives overseas, so maintaining the relationship would involve costly airfare and, potentially, visa fees for her. Should we marry and she relocates to the U.S., she also wouldn’t be able to work right away, so I’d have to support us alone for a while.

I don’t feel like I’ve made good progress on my retirement goals so far. From web research, it seems as though I’m about average for my age in terms of stowing away for retirement, but I don’t really gain comfort from this. I’ve struggled through a few recessions and recognize the volatility of the economy.

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The CFP® says: It’s good that Dave appears to have sufficient emergency savings and has started saving in his retirement plan. In order for him to pursue his retirement goals, the most important thing for him right now is to do everything he can to maximize his retirement savings.

A move to California could be an opportunity because he could look for an affordable place to live and use what he may save on housing to maximize his retirement contributions. Dave doesn’t have quite enough saved for retirement based on his age, so when he chooses a new company, he should also consider the value of its 401(k) match and try to save a larger percentage of his salary toward retirement than he has been. He should assume he’ll need about $75,000 a year to live on in retirement, so ideally I would like to see him have somewhere north of $200,000 saved up at this stage.

All the same, I think his target date for retirement is probably doable. The main thing he’s got to do now is focus on saving. At age 45, he’s starting to lose the benefit of time, which is the most important factor. This is a very critical time for him.

If buying property is something Dave’s intent on, he might want to look at a multifamily property where he can live on one side and rent the other side, like a duplex. That could help maximize his return, versus buying a single-family home, and rental real estate could eventually contribute to his retirement portfolio.

I also like the idea of his potentially living abroad in retirement, especially if he likes to travel a lot internationally anyway. Personally, I wouldn’t buy property in the U.S. until I was absolutely sure I was staying, or at least staying for the next 10 to 15 years, because real estate doesn’t appreciate that fast. Buying a home is a big capital outlay and there’s no need to if you might not stay in your home for the long run. That money is too valuable and potentially needs to be in a retirement account instead of tied up in real estate.

I would recommend Dave figure out the cost of living in the country where he’d consider retiring, and then inflate that at 3% to take into account that costs will be higher by the time he retires. He would need to have at least that much saved up. From there, he can compare the price tags of retiring here or abroad. He’s going to need to save more no matter what he chooses, but if he refocuses on this goal starting now, I think he’ll give himself a chance to achieve a realistic retirement.

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  • Tina

    My husband and I are starting residency next month and this is such a help!

  • MS

    Would be interested in being profiled in a column like this… could be helpful for sure.