| Here's a look
at how two families in their 40s manage to keep on an even financial keel as they deal
with personal issues and life's struggles.
While their stories are unique, the issues they grapple
with are common for many folks in their 40s.
Betsy Leidecker: Many Small Decisions Lead to Saving
Success
By outward appearances Betsy Leidecker, 46, would seem to
be a quintessential baby boomer. She's an urban professional living in an up-and-coming
neighborhood. She and her husband, Kevin Gustafson, 46, recently installed a whirlpool and
several pricey light fixtures from Restoration Hardware in their historic home.
But, don't pass judgment hastily. If anything, she's the
antithesis of this stereotype. She's not profligate. Most purchases she makes are
carefully thought out.
Leidecker, a mortgage broker, figures the spa and lights
are valuable investments.
There's no BMW or Volvo for this family. She drives around
a nine-year-old van. "(It) isn't sexy," she admits.
On Friday nights, when the family has pizza, it's not from
some tony restaurant. "We buy a frozen and doctor it up," she said.
It's with this sensible, frugal approach that Leidecker and
her husband, a security system rep, have managed to amass a retirement portfolio worth
about $209,000, and a $25,000 college savings account for their nine-year-old son Peter.
And yet, she believes they could still be doing more.
"I think as things get crazier and crazier, you don't
know how much is enough," she said. "My feeling is that we need to continue
planning and continue putting money away."
Leidecker credits her parents for giving her a sound
financial grounding. "My parents are in good health and have planned well for their
retirement. I want to be like them," she said.
The two cornerstones of her retirement portfolio are
$100,000 in IRAs and $100,000 in Citigroup stock. She built up the latter when she worked
for the company for 10 years. That provided her with a "really good start" on
retirement savings.
Her family's road to financial success hasn't always been
easy. In the early 1990s, she lost about $25,000 in a failed attempt to start her own
business. And then there was the day she and her husband walked into their house to find
the plaster ceiling had fallen.
But, they've managed to get past these obstacles and
continue. Their goals at this point are to provide the money for Peter to go to college,
and to make sure they aren't a financial burden on him in their old age.
Currently, she's the primary saver. She puts away $7,200 a
year into the 401(k) plan offered by the bank where she works.
The only cloud in the sky is about $23,000 in nagging
consumer debt. But Leidecker hopes to pay some of that down very soon.
Cindy Wingard: Going at Life in Reverse?
Cindy Wingard had her mid-life crisis in her 30s. Instead
of hanging it all up and heading to Tahiti, she went to college, got a degree, bought a
house, and settled down. Currently, she's got all the pieces in place to do the things she
loves: follow her beloved Lakers, play tennis, and take the occasional vacation.
By her own admission, at age 45, she's a lot more relaxed
about dealing with money than when she was 25. Then she was a "big planner," she
said.
But, when she lost her job as a mortgage banker a decade
ago, as the real estate market tumbled, reality slapped her in the face.
So, she took her savings (about $50,000) and invested in
herself. She got a business degree and went back into the mortgage business. Now she's a
senior vice president at the mortgage bank where she works.
But, taking that time off hurt her financially. "It
took me 10 years to get back to earning what I was getting prior to going to
college," she said.
Today, she has about $54,000 in her 401(k) account and
$6,000 in an IRA she opened in her early 30s. To her credit, when she went back to school,
she never touched her retirement money. She faithfully makes out a budget every quarter.
She credits her single mother for passing on both a strong work ethic and money management
skills. "I saw how hard she worked to make our payments, to put clothes on our
back," Wingard said.
Knowing she got a late start on retirement saving, Wingard
currently contributes the max allowed in her 401(k) plan. She doesn't expect to retire
until age 65.
In the meantime she sees herself having "20 years to
get as much saved as I can."
Her house figures prominently in her retirement plans.
"My house will be paid off when I'm 59 years old," she said.
The key to that was a decision two years ago, to refinance
her house. She locked in a 6% fixed rate on a 15-year mortgage.
Wingard conservatively managed any debt she assumed.
"When I bought my house, it was the highest debt I ever had in my life," she
said.
In addition to the purchase price, Wingard spent about
$20,000 upgrading the house to make it livable. "I paid that off as soon as I
could," she said.
One factor which might hurt her plans is her 68-year-old
live-in mother. Her mother is in good health, and Wingard hopes that continues. But, she
expects that if her mother falls ill, Wingard and her sister Laura will have to shoulder
the financial burden to pay for any costs not covered by the HMO.
"We will do whatever" is necessary, she said. And
she's trying to plan ahead for these expenses as well, through additional savings.
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