Building your retirement nest egg

Black Enterprise, April, 1996 by Donna Hemans, Fairey. Juliette

A budget has its purpose. But ultimately, the Smiths realize that its success or failure lies with them and their everyday decisions. "I think Saeed's plan can help us if we do the right thing," Sean says.

READY TO RETIRE-A FIVE-YEAR PLAN

William and Victoria Kelley of Southfield, Mich., have been doing the right thing for years now--and it's already begun to pay off. At 49 and 40, respectively, they are laying the financial groundwork necessary for them to retire in five to 10 years and launch their own trucking business.

In fact, William, a manager who is just three years shy of qualifying for a full pension from Chrysler, wants to get started on the business even before he retires. With that in mind, he and his wife of three years are heavily focused on staying out of debt and beefing up their retirement funds.

William learned the value of saving years ago: During Chrysler's lackluster '80s, he was laid off twice--once for two years. Although he received unemployment payments, William had not saved adequately and so was forced to live from check to check, month to month. After that experience, "I decided I would never be broke again," he says. "I promised myself I would always save after that." He has invested through Chrysler's 401 (k) plan for 12 years.

Marrying Victoria three years ago did not change his financial plans. As a single woman, she had invested in bonds and brought her credit card debt way down before they married. "I didn't want to go into marriage with a lot of debt," she says. "Being married you take on different responsibilities. You are no longer doing things alone. You have to think of the other person."

But that doesn't cancel out each individual's dreams. Victoria's retirement plans, in addition to working on the trucking business with William, include possibly transforming one of her hobbies --floral arranging--into a full-fledged business. She has already supplemented her salary as a machine operator for the U.S. Postal Service by occasionally selling some of her creations. The couple also want to do some traveling.

ENTREPRENEURIAL VISIONS AND DEBT-FREE DREAMS

Like many people, the Kelleys want to retire debt free and live comfortably in their own home. They have no credit card debt, and their only current debt is the mortgage on their house. They won't specify the amount, but houses in their neighborhood range from $150,000 to $240,000. The couple, whose monthly fixed household expenses now total $2,500, want to repay the balance of their mortgage before making the transition from workers to retirees. "Our goal is to be debt-free within 10 years," William says.

In order to achieve all their goals, William and Victoria know they have to intensify their current savings program. Although the Kelleys have made a good start, they have generally been conservative investors. "We weren't too familiar with the market and didn't want to take too much risk," William says. "We were getting ready and learning about savings, investing and staying out of debt." Besides purchasing the house, they have spent money on other things. For example, William has put two of his four children from a previous marriage through college.