Never Too Late To Build A Nest Egg

The Beasleys are getting a crash course on investing for retirement

William And Brenda Beasley in the military–serving active duty for over 15 years. Brenda, 34, (who was unavailable for our photo shoot) entered the Navy after graduating from high school; William, 36, joined the Marines after almost completing three years of college. The husband and wife team have been together 14 years.

“When we got married, we were struggling to make ends meet,” says William, explaining why they waited until now to seek out financial guidance. “We had our first child. We were low-ranking [military personnel], so we weren’t getting paid much (around $2,000 a month combined). It was hard for the three of us to survive out in California.” While the Beasley’s income increased as they moved up the ranks, there was another mouth to feed when Brenda gave birth to their second child three years later.

Today, the couple makes a combined $75,000. William, a staff sergeant, and Brenda, a yeoman first class, have both set their sights on retiring from the service and entering the civilian workforce in four years. In fact, William is currently working on obtaining his master’s degree in education so that he can become an elementary school teacher. “Now we are at a point where we feel more comfortable setting aside money and not having to worry [about touching it],” he says.

To date, their biggest liability is the $170,000 mortgage on the one-family home they purchased in January, in Virginia Beach, Virginia. Also, two of the three vehicles they own are paid for but a $13,000 loan is outstanding on his truck.

While the Beasleys are getting a late start on investing, it is never too late to begin squirreling away money for the later years of life. Between them, they have about $7,000 in savings and no retirement funds outside of their pensions. They each expect to receive 50% of their base salary as a pension upon retiring from the military. The couple plans to use that money to pay for their daughters’ Tejada and Tejaeda, 13 and 10, respectively, college education.

Using the $2,000 financial fitness contest prize, the couple wants to open a Roth IRA, which they can contribute to regularly. After years of procrastinating, the Beasleys are ready to sit down and seriously talk shop about creating and following a budget, controlling their spending, and mapping out a financial plan for their golden years.

THE ADVICE
To help the Beasleys make the transition from military to civilian life, BLACK ENTERPRISE had the couple consult with Larry E. Folmar, principal of the Folmar Financial Group Inc., in Southfield, Michigan. He says the couple has done a “decent” job of minimizing credit card debt and maintaining cash flow. However, although the car note and mortgage are understandable, there is a lavish expense of $5,000 a year on clothing that must be curtailed. Folmar also identified an extra $500 of disposable income that could be put to better use. His recommendations are as follows:

  • Change tax-withholding status. The couple is overpaying income taxes by approximately $2,000 a year.
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