When I’m 64: Part 2 of 3

August 14, 2011

In my life, there are only a few people whose lives I have envied.  My mom’s sister and her husband are two of them.  They live in a big farmhouse in a tiny town in New Hampshire, own lots of real estate in the area and are savvy business people.  They are also probably the most hospitable and generous people I have ever known.  A few years ago, they retired and bought a small, cute second home in Key West, Florida, where they now live during the winter months (and which I have had the pleasure of visiting, twice in three years, after their summer exodus).  They keep active, love traveling, and have managed to save enough to really enjoy their retirement.

When I was 22, carefree, and working as a waitress at a bar called Clerys downtown, my aunt and uncle came in for lunch.  Over the course of their meal, my uncle informed me that I really should start saving some money for my own retirement.  I listened to him talk about Roth IRAs and decided opening one would be a good idea, but does it seem like I’ve ever listened to anyone about saving money before this? Meanwhile, seven years passed.

Go figure.

My mom's cat has finally retired at the age of 75 (in cat years). If he had only opened a Roth IRA sooner...

Anyway, after meeting with my financial advisor (!), I found out that I might actually be able to retire comfortably someday if I do the right things.  So…

Roth IRA (Individual Retirement Account)

My current financial situation, my age, and my self-employed status have led my financial advisor to suggest that I open a Roth IRA (my uncle will be proud).  I can put a maximum of $5,000 in a Roth IRA every year, and it gains interest over its (and my) lifetime.

I can have specific amounts automatically deducted from my bank account, and, because I’m paid only once a month by various institutions, I can also call and change the date of debit from my checking account if a contract hasn’t paid me yet.  No problem.

My advisor gave me some good advice.  If I go out to dinner two fewer times a month, that’s $100 more dollars I can contribute to my IRA!

Just like that, I can retire someday.  (Oooh and that rhymed).

I wouldn’t be able to take any money out, tax free, until I’m 59.5 years old (not that I’ll be able to retire at that age), but at that point, I’d hopefully have a good amount of money to spend on living expenses etc., which would help me significantly, especially if I develop health issues, which brings me to my final, probably most lengthy post, When I’m 64: Part 3 of 3.  Keep reading, and I promise I’ll start talking about music therapy stuff again really really soon!

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One Response to “When I’m 64: Part 2 of 3”

  1. Emily Holleran said

    These posts are inspiring me to learn more about my own (very modest) finances! It’s interesting to hear what aspects you have to consider from an unconventional angle, given your self-employment. Blog on!

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