Guest Post: A millennial’s pretirement plan

Today I wanted to share yet another guest post from a favorite fellow blogger. I figure by now you’re a bit tired of listening to an old guy like me whine about all my dumb financial blunders. So today I’m welcoming someone much younger to the stage. She is by far the savviest financial Latina I know and has been tearing it up on her blog lately. Savvy Financial Latina is a 20-something woman learning to manage life, career and money in Dallas, Tex. She has a Bachelor’s in Global Business, a Master’s in Supply Chain Management, and an MBA, all without any debt. She now works for a Global 500 company as a sourcing analyst. Savvy Financial Latina is, also, a member of the Dimespring 30, a community of bloggers sharing their thoughts, experiences and perspectives on personal finance.

What financial independence means to me:
Savvy Financial Latina

This is a totally different financial Latina.

This is a totally different financial Latina.

I’m 23 years old. I graduated with a Bachelor’s in Global Business, Master’s in Supply Chain Management, and M.B.A. I’m married to a wonderful man and we are searching for a nice, affordable home to live in Dallas, Texas. We try to have a frugal lifestyle and invest in our future.

Pretired Nick and I have been commenting on each other’s blogs for a couple months now. I think I have pretty much read every article he’s written. I find the topics stimulating and the possibilities endless. When he asked me to write about pretirement from a Gen Y’s perspective, I jumped at the opportunity.

Retirement in Corporate America

I started blogging when I was 21 while I was in graduate school and in my first year of marriage. We were pretty broke, and money was tight, and often a topic of stress. Blogging was an outlet at a point in my life where I was stressed out over everything. Soon after graduating in May 2012, I started working in Corporate America. Financial and lifestyle choices have always interested me, and thus, I started asking older workers about their retirement plans. I have found only one person who has a set date for retirement. Everybody else balks at the word retirement, and says “no way!”

I ran into Guy X one day leaving the building. He was really cheery, and so was I! Surprise! He mentioned he had just finished talking to his daughter who was helping him build his home in Hawaii. He quickly delved into how he had less than 2 years to retire fully. At which point he was going to split his time between Hawaii and Colorado. He deserved it. He had spent 30 years working at a manufacturing company, and another 10 years working for our company. Dang… if you count the other two years of work he has left, he has worked a total of 42 years. Astonishing! The guy had a calendar counting down day by day, minute by minute!

Most people don’t have a plan for their retirement. They think retirement is scary. If you think about it, retirement is a fairly new concept. Prior to the 20th century, you either died early or you worked until you no longer could, and then your kids took care of you. The baby boomers will be the generation that takes advantage of social security and/or pensions. And please, if you say social security and your pension will not be enough to fund your lifestyle, please think before you speak. My generation will have no pensions or social security to rely on. I truly believe social security will no longer be in existence by the time I qualify.

What’s wrong with this picture? Just because something is scary does not mean there should not be a plan.

My definition of financial independence

Retirement: Sitting on a recliner watching TV. I could do this for one week before I would start going crazy. Not my cup of tea.

Financial Independence – Not having to rely on the corporate paycheck to fund your lifestyle. Not having to care about politics at work, impressing anyone, tied to a set schedule, etc. Freedom is what I want. This is what Pretired Nick defines as pretirement.

Do I have a number?

So, I can’t say I have a number yet. I do know my husband and I want to have the freedom to do whatever we want earlier rather than later. We don’t want to be in our sixties and stuck because we have too much debt, etc.

I once saw an episode on House Hunters International of a couple looking for a home in South America. The couple was in their 40s, and had “retired” early. This seems like a very lovely idea!

Our plan is to:

  • Max out my 401K (So we have income when we’re old and wrinkly).
  • Max out ROTH IRAs (Again, our old and wrinkly selves will thank me!).
  • Invest in a taxable brokerage account. (Passive income for our not so old selves)
  • Develop side hustles that bring extra money.

I want us to save/invest 50% of our income. I know our plan is not very definitive, but I do feel we are trying to invest toward our future. It’s extremely hard to put a net worth goal when you are so young. Any thoughts?

Personal finance blogosphere

I feel so lucky having an entire troop of personal finance bloggers talking about their financial choices and how that has affected their lifestyles. It is extremely encouraging to maintain a financial conscious, yet comfortable lifestyle.

Pretired Nick here again. Well, what do you all think? Savvy Financial Latina is building her retirement fund and a nice pretirement fund at the same time. And she’s working toward saving 50% of her income. Sounds pretty good to me. Let us know what you think in the comments! 

Image courtesy of David Castillo Dominici via FreeDigitalPhotos.net.
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22 Thoughts on “Guest Post: A millennial’s pretirement plan

  1. If you can consistently save 50% of your income at your age, pretirement is definitely in your future! Best of luck. :)
    Nick (@ayoungpro) recently posted…Five Frugality Rules to Improve Your LifeMy Profile

  2. It seems that you’re on the right track and I am sure that pretirement will happen exactly when you’ll want it to happen. Oh, and we do share the same opinion on retirement/financial independence… and I am sure that there are more who feel the same.
    C. the Romanian recently posted…Time to Work with a Five Year Plan!My Profile

  3. Wow, SFL! I wish I was thinking like you when I was your age. My husband and I are in our early 40s and finally got serious about money just a few years back. Until then we were just going along doing what everyone else was doing – buying cars and houses and filling them up with things! Now we run our own businesses, have IRAs, and are currently paying off all our debt. Our plan is to be “done” at 50, but that doesn’t mean we won’t work. We, like you, will only be doing the kind of work that we want to do (emphasis on ‘want’). I love seeing so many younger people living a lifestyle like you and husband. Who wants to be 60 and up to their ears in debt?

    Thanks so much for coming over and sharing your expertise!
    Tammy R recently posted…Be a Crybaby and Miss Out on the Good LifeMy Profile

    • Thanks Tammy! Although I do get jealous of people who spend like there’s no tomorrow, I have also seen the other side. It’s no fun being 50 worrying about whether your going to be laid off, and not have enough money to survive. Especially if you have been a professional for the past 30 years. Don’t want to be that person.
      SavvyFinancialLatina recently posted…Home Buying Tips for First TimersMy Profile

  4. This idea of pretirement is really starting to grow on me. As soon as I rid myself of debt, I’m definitely going to be maxing my 401k! It’s refreshing to see people my age take retirement as seriously as I am. Great post, SFL!
    Lisa E. @ Lisa Vs. The Loans recently posted…Who Wants to be a Millionaire?My Profile

  5. I agree with your definition of financial independence. That’s what I would like some day as well. I also think it’s a little difficult to have a date in mind when you’re so young. We have so much room to grow, and hopefully get raises, that we really don’t know where we will be in five-ten years!

    I think saving 50% of your income is a very good start to the pretirement path, though. I would love to be able to do that, but until we move out of this area, that won’t be possible. I have to work on paying off my student loans first, and then I plan on getting serious about investing.
    E.M. recently posted…July Goals Review & Goals for AugustMy Profile

  6. Definitely sounds like you’re on the right track SFL. Saving 50% of your income is a great goal! I also like the idea of side hustles, but we just don’t have enough time at the moment between our full time work and personal lives. It is fun and inspiring to read about some of the incredible income that’s possible just from side hustles though!
    GamingYourFinances recently posted…Building Wealth: How to Become WealthyMy Profile

  7. Hi there, Savvy Financial Latina. It’s great to learn a bit more about you and your plans. I am in Sourcing as well, so it’s good to connect with one of our own here in the blogosphere.

    I’m so impressed that you are setting goals like this early on in your career. I have no doubt you’ll reach financial independence quickly.
    Done by Forty recently posted…Should I Buy Investment Property Locally?My Profile

  8. SFL is definitely on the right track!

    Plus all that saving leads to good habits which means you’re used to spending less when you ARE retired.
    No Waste recently posted…Microwaves And Video GamesMy Profile

  9. You are so lucky to have time on your side! Now you can start maxing out those retirement accounts and reap the benefits of compound interest for many years to come.
    Holly@ClubThrifty recently posted…Operation Frugality: Save Money by Eating Old FoodMy Profile

  10. Good for you, SFL! Smart, smart move on your part. We started our responsible finance handling much later in life than you, but no matter. We have a plan for financial freedom, and I can’t wait till hubby can dump his day job!
    Laurie @thefrugalfarmer recently posted…How to Teach Your Kids About MoneyMy Profile

  11. How exciting! I like that you have your goals in front of you. It used to be so frustrating trying to help people reach their goals when they couldn’t even really crystallize them.
    AverageJoe recently posted…This Gross Habit Made Me Thousands of DollarsMy Profile

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