Getting It Right the Second Time Around

Retirement was short-lived for Don King but he and his wife, Patricia, are working on a plan to make sure he’s ready in three years

The King family

In 1996 when Patricia King’s husband, don retired from the Army, she says they didn’t look at the big picture—and paid a steep price. “We didn’t understand the full impact that retirement would have on his finances when he got out. We kept spending as we always had. We made big mistakes. We were not prepared for his retirement,” says Patricia.

Don went back to work the same year he retired. Now they’re refusing to let history repeat itself. In the next three years, Don, who is 63, would like to retire from his job as a Department of Defense contractor. “We want to get it right this time,” says Don.

Their caution is understandable. Nearly 20 years ago, they lost their home to foreclosure. At the time, Patricia was an emotional shopper who could not control her spending. But the Rineyville, Kentucky, couple took money management classes at their church, and Patricia eventually weaned herself of her bad habit of using retail therapy. “We didn’t want debt to be a way of life,” she says.

Today, while they have more than $11,000 in credit card debt, they have a strategy. “We have a six-, 12-, and 18-month plan, going from lowest to highest interest rate and paying beyond the minimum, so that in six months we can pay off one, and then take what we were paying for that one and apply it to the next one for the next 12 months and so on,” she explains. Much of this debt is travel expenses, as well as some help they gave one of their three grown children to help furnish an apartment. Mostly, though, they tap their credit cards sparingly.

In addition to credit card debt, the Kings have about $18,000 in student loan debt, $199,000 on their mortgage, and $22,000 on their car loan. Their mortgage payment is $1,076 and they pay an extra $100 monthly. Their car payment is $546 and they pay $50 extra monthly. “We want to be debt free in two years and finished with our mortgage in 15,” says Patricia, who is the postmaster for the U.S. post office in Sonora, Kentucky, and officer in charge of the U.S. post office in Radcliff. They’re aggressive with debt because the goal is to reduce bills as much as they can before Don retires. At 50, Patricia doesn’t expect to exit the workforce for another 15 years.

Ideally, Don would like to retire fully in three years, but he is open to working part time. However, the couple still have yet to take a critical step: calculating the income they will need in retirement. “One of my primary concerns after both of us retire is affordable healthcare,” Don says. They are wondering what the best approach is for paying for long-term care.

They also believe that real estate investing will offer an option to develop an income stream when Don retires. Patricia has her broker’s license and they would like to purchase their first rental property sometime this year. “I would like us to buy about seven properties, though we don’t want to over-leverage.”

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