How Being in Debt Has Set Me Up For Retirement


Where we currently spend our frugal summers. I could handle my summers in retirement with this view every day, if I ”had to” 😉

I’m quickly approaching my 30th birthday and I can admit that I have zero dollars saved for my retirement. While some people would rightfully be freaking out I’m totally calm.

I have a decent life right now, debt and all. I mentioned in my post outlining our debt payoff plan that my plan was a ”life happens” plan. Meaning, I fully expect life events to pop up and for this plan to still hold up. We’re currently not living so tight there is zero room to give, nor have we maximized every single outlet for increased income (should it look like we may have a ”low month”). We like our lives for what they are right now and enjoy the balance that we have between our jobs, family, interests and goals. If, once our debt is paid off we continued to live just the way we currently are-with cable, decent grocery budget, safe reliable vehicle with gas in it, clothes on our back, the odd frugal family getaway, I’d be content. I want more, but I know I could have a life that I would be content with.

Living on less has taught me well

While retirement experts suggest you aim for a retirement income of upwards of 70% of your current income, once our mortgage is paid off- and it will be years before retirement age- we’ll be very comfortable living on 40% our current income. Being in debt, and being forced to live such a lifestyle that allows us to have this balance between paying it off while still living, has taught us what we really need and are comfortable with. So while there is no reason why we can’t save enough for the projected ”expert” level of 70%, even if we’re late starters, if we come short I know we’ll be more than fine. Anything over 40% our current income is extra icing on the cake in my eyes.

Age isn’t really a factor…

Though starting to save for retirement into your early 30’s may be ”old” by some standards the fact is that we’re still young, we have great promising careers and nothing but income potential in front of us. If our income froze right now we’d still be ok given that we’re able to pay down our mortgage and put over $2,000 per month towards debt today. Though I have dreams of how I want to allocate that $2000 when the debt is paid off- broken up between retirement savings, vacation and a little more wiggle room in our current budget, it still comes down to the fact that I have more than $2000 per month to play with and funding retirement trumps all other plans. If we invested even half of that $2,000 each month we’re projected to hit a savings goal that would supply an annual income in retirement that would give us a very comfortable retirement, more money than I think we’d spend (but will obviously save anyway!).

Being in debt has shown me that we’re capable of some pretty amazing things when we’re forced into the situation. While I certainly don’t dream of a retirement with no fun or games, life has shown me that should we be forced into a situation we can always make the best of it. I’m glad we won’t be approaching retirement with nothing but room for disappointment. If I was setting myself up in life with expectations for a very lavish retirement and couldn’t do it, I’d be a mess. Retirement is not the stage in life where you’re forced, for the first time, to make theses sorts of financial changes. You’ll likely blow through your money too fast with no means of getting it back. I’m glad I learned the financial lessons I did, the hard way, while I was still young and able to carry my lessons learned forward in life.

Enjoy Plunged in Debt?


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  1. I actually say this to my clients all the time. Their debt has forced them to make really smart money choices everywhere else and they are used to putting aside a chunk of change every month that once it goes away, they will be conditioned to saving for the next thing in their lives.

  2. I just wrote an article about how having a low income served my husband and I better than anything else, because we learned to be frugal and live on less:
    It is the same concept as this article and I love seeing how so many of us personal financial bloggers can come to the same idea from different view points and points in our lives.

  3. Yes, you may have “lost” some of your compound interest years but I’m sure you guys will more than make up for it when you start saving. I’ve found the same thing when I paid off my debt, I don’t spend nearly anywhere close to what I used to (and what got me into debt in the first place) so I’m able to save more than I ever thought possible 🙂

  4. You make good points Catherine. I never thought about my debts as having caused me to become smarter with my money. I guess that’s one “upside” of having debt and trying to dig my way out of it.

  5. Very good point, Catherine.. I’m not sure that I have ever thought about it like this.

    When you are paying off debt, you have to get creative in finding ways to save money and those lessons will continue even after you have finished your payoff. It has worked that way for us!

  6. I’m totally with you on the value of learning to live with less. We’ve simplified our lives such that our living expenses are just really low now. I love this easier, less-consumer-driven lifestyle and I know it’ll serve us well in the future. If you need less to live on, you don’t need to save as much!

  7. Hey, I know someone who didn’t start saving for retirement until they turned 40. It is never too late! You still have plenty of time if you start now.

  8. I am so thankful for our debt in this regard. I know we can accomplish anything we set our minds too. I used to be afraid of owning rental property, but now I know that even if we had no tenants at all, our monthly costs would be less that what were were once putting toward credit card debt, so it doesn’t scare me at all. I almost think you have to hit bottom to really change your outlook. We paid off debt and ran it back up several times before being financially smart stuck, but now it’s just our way of life.

  9. I have a whopping $500 in my retirement account and I just turned 30! I feel you, girl. My debt has set me back in that way, but I know what it is like to live on less and have functioned pretty well doing so.

  10. While I admire your planning for the future and the way you’ve managed to use the experience of being deep in debt as a learning experience, I think it’s terrible that most of us only become fully intimate with money by getting into debt. Why is it we don’t have proper financial education in schools so that young kids can understand the implications of debt and saving?

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