The goal is simple: You want to reach your retirement years with enough money to travel, pursue your favorite hobbies and spend time with your grandchildren without worrying about whether you can pay your energy bill each month.
But how you reach this retirement savings goal is decidedly more complicated.
Financial advisers offer plenty of advice on how to best save for retirement, and the internet is filled with stories that lay out detailed blueprints on how you can meet those goals. But what steps are people actually taking to hit their retirement milestones? MoneyRates spoke to five people about the tools and strategies they are using for retirement. Here's what they had to say.
Kate Dore, 32
Photo courtesy of Kate Dore
Social Media Marketing Specialist
Retirement Funds: IRA, Taxable Investments Account
Saving for retirement has become a passion for Nashville's Kate Dore. The social media marketing specialist regularly lists her net worth on her finance blog, Cashville Skyline. As of early May of this year, Dore had saved more than $53,000 in a Roth individual retirement account (IRA) and more than $21,000 in a taxable investments account.
That's impressive, especially considering that the 32-year-old has, as she says, never been a particularly high annual earner.
"I have always been an average earner," Dore says. "I used to work as marketer in the music business. Now I'm in marketing for social media. I've rarely had access to a 401(k) account. I want to show people that you can get a hold of your money and save for retirement even if you are not making six figures every year."
Dore has had a 401(k) plan exactly once in her working life, when she worked in marketing for a record label. But she only held that job for six months before being laid off. Since then, she's never had the opportunity to invest in a 401(k) retirement savings account.
That hasn't stopped Dore from saving for retirement. Since turning 18, she has invested every year in her Roth IRA. She now maxes out her contribution to this savings vehicle every year. She also makes regular investments in her taxable investments account because maxing out the Roth IRA isn't enough, according to her.
Dore says that she is confident that she is on track to reach her retirement-savings goals.
"When I was in my early 20s, I wasn't earning a lot," Dore said. "But I knew that I had to start saving anyway, even if it was just a little. When I was 18, I contributed $1,000 a year. That was my goal, even when I was waiting tables. Since then, I've tried to contribute as much as I can to that."
Sean Coffey, 35
Photo courtesy of Sean Coffey
Media and Program Evaluation Manager
California Reinvestment Coalition
San Francisco, California
Retirement Funds: Roth IRA, Traditional IRA, 403(b) Plan
Sean Coffey just celebrated seven years of marriage. He and his wife, Elizabeth, have two children under the age of 3. In San Francisco, that means a lot of expenses.
"Our daycare bill in San Francisco is more than our mortgage payment," Coffey says.
Since having children, the Coffeys have slowed the pace of their retirement savings. But that doesn't mean they haven't saved at all. The Coffeys invest every year in a Roth IRA and a traditional IRA. Coffey also contributes to his company's 403(b) plan, which is like a 401(k) plan only for tax-exempt organizations.
Coffey is confident that once his children are in public school, he and his wife will again boost the rate at which they are saving.
"We talked to a financial adviser about a month ago," Coffey says. "The adviser told us that once our kids are in school, we'll feel like we are making money again. In the next couple of years, I don't see us socking away a lot for retirement. Once we are done with paying for daycare and preschool, though, we will ramp that back up."
Coffey said that during the last two years, he and Elizabeth haven't invested more than $1,000 each year in their IRAs. But before they had kids, they had stashed plenty of dollars in these accounts. Because of this, the Coffeys aren't worried about hitting their retirement goals.
"Once the kids are at school, we will maximize our IRAs again," Coffey says. "We were doing that before the kids, and we expect to do it again soon."
Oraynab Jwayyed, 45
Photo courtesy of Oraynab Jwayyed
Founder and Owner
Business Interludes, LLC
Retirement Funds: 401(k), IRA
Oraynab Jwayyed admits that she started saving for retirement late in life, not seriously socking away money until the age of 42.
"I was an independent contractor for most of my adult life, and retirement was never part of the plan," Jwayyed says.
That's changed. Jwayyed returned to school and finished her business degrees. She found her first corporate job, giving her access for the first time to a 401(k) plan. At that time, she contributed about 20 percent of her earnings into her account.
Jwayyed then moved to a new job, working in risk analysis for a mortgage lender. She rolled her first 401(k) fund into an IRA while contributing to the 401(k) account offered by her new employer. Jwayyed has retained a financial adviser to help manage both funds. She contributes 10 percent of her salary to this new account.
"As my salary increases, I plan to contribute more to both funds," Jwayyed says. "I've been told by my financial adviser that my funds are working for me. I should have enough money to retire on when that time comes."
Today, Jwayyed runs Business Interludes, a company dedicated to helping women manage their money. She is also the author of "Starting Over," a book Jwayyed wrote to help women work through financial crises after divorces or break-ups. Jwayyed has experience in this as she had to work through rough financial times after a divorce.
Too many women, even those who were regular savers while married, lose sight of their retirement and financial goals after divorce, Jwayyed said. She wasn't going to fall into that trap, she said.
"I knew that I had to take care of myself financially after the divorce," Jwayyed says. "I had decided it was time to focus on saving for retirement and I wasn't going to let my divorce stop me from doing that."
Jwayyed said that because she started saving for retirement later in life, working with a financial adviser has been key. Her adviser regularly studies Jwayyed's finances and investments to make sure she remains on track to hit her savings goals.
"Every year, we sit down and we go through an investment audit," Jwayyed says. "We look at my portfolio, my assets, everything that I have. We adjust if we have to. We discuss future plans. You have to always adapt as you are working toward retirement."
Abie Cooperberg, 27
Photo courtesy of Abie Cooperberg
New York City
Retirement Funds: Stocks, Real Estate, High Interest Savings Account, 401(k)
When Abie Cooperberg and his wife, Samara, first married, the couple pooled their money into one account with the goal of saving for a home in the New York City area. The only way to do that? They needed to create a detailed budget that would break down every financial detail of their lives, Cooperberg said.
Today, the Cooperbergs use a spreadsheet that they save on Google Drive to track every dollar they spend and every cent they save.
"We live by this," Cooperberg says. "Every single dime we spend goes onto this sheet."
At the end of each month, the spreadsheet tells the couple how much they've saved. They then take that money and move it into a separate savings account. From that point, the couple moves the money to one of three destinations: They invest a portion in the stock market, some in real estate deals and the rest in a high interest savings account.
"We have been doing this for the last year-and-a-half, and we have found this to be the most effective way to monitor and save money," Cooperberg says.
By following their budget, the couple saved 50 percent of their combined post-tax sales in 2015. This money is in addition to the regular 401(k) contributions that both Cooperberg and his wife, who works in public relations, make at their jobs.
Saving might get a bit more challenging. As of the writing of this story, the Cooperbergs were expecting their first baby. But Cooperberg says that the couple expects to continue saving even after adding in the expenses of diapers and baby bottles.
"If we maintain this for the next two years, we should be able to save a lot of money for retirement," Cooperberg says.
Aaron Norris, 39
The Norris Group
Retirement Funds: Roth IRA, Real Estate, Rental Income
Aaron Norris has had an interesting career path. He formerly worked as an actor in New York City. Today, he works as a vice president in the family business, The Norris Group, a Riverside, California-based company that invests in real estate.
And investing in real estate is giving his retirement savings a boost.
Norris owns several rentals -- under 10 -- and his own home. He has converted half of his retirement dollars into a Roth IRA that now holds a rental and several trust deeds. He has hired a professional financial planner to handle the rest of his retirement funds because, as he says, he "doesn't get blamed for not being diversified."
To Norris, a diverse retirement savings portfolio is one that includes investments in physical real estate. Real estate is an especially attractive way to build retirement savings because homes have the potential to increase in value, meaning that when the time comes, Norris can sell them for a profit.
"All of my California rentals have had an exciting run in price," Norris says. "It would be very difficult to ask for a $100,000 raise, despite my dad owning the business. Along the way, the properties continue to generate cash flow, which has been extremely awesome in helping save and buy more assets."
Of course, there's no guarantee that homes will increase in value. This is why Norris says that investors need to do their research, studying an area closely before investing in real estate in any particular neighborhood. But for those investors who do find a property that increases in value over time and generates rental income at the same time? They will be able to grow their retirement savings at a quick rate, Norris said.
"I think investing in real estate is a great tool for building your savings," Norris says. "It's not for everyone, but real estate rentals can be very profitable."
Interested in being interviewed on your retirement savings or personal finance journey? Contact us at email@example.com.
Comment: Which retirement savings accounts or investments do you use to build your retirement fund? Are you close to meeting your retirement savings goal?
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