As for longer term goals, Patrick is saving about 5% of his salary in his 401(k). They have a plan, too, for those burdensome student loans–keep paying them faithfully for 10 years, and then take advantage of the College Cost Reduction and Access Act of 2007, which allows those who work for nonprofits, like his present employer, to write off the remaining balance. Haile plans to seek employment with a nonprofit as well. If that’s not viable, she will use a 25-year loan forgiveness plan.
The Advice
Black Enterprise and Jocelyn D. Wright, a certified financial planner and founder and managing partner of Ascension Wealth Management in Elkins Park, Pennsylvania,
took an in-depth look at the couple’s finances.
– Get real about retirement. “Eric and Antoinette seem to have their priorities in order, especially in terms of their wedding and their commitment to saving,†says Wright. However, they need a dose of reality. “What needs to be more clearly defined are their long-term goals. Their retirement goals of $500,000 to $1 million are unrealistic, given how early they are in their careers and Antoinette wants to retire at 45. Well, that would take an inheritance or some sort of windfall,†says Wright.
Then, too, the two both have a family history of longevity, with relatives living into their 90s. “So if Antoinette retired at 45, she could have another 45 years in retirement, without the 20 more years of saving if she stepped out at 65,†Wright says.
If Patrick and Haile want to retire at ages 48 and 45, for example, they would need to save up $2.6 million, which would require them to put aside $4,310 a month–completely unrealistic, Wright says. On the other hand, they could save $830 monthly and retire at ages 70 and 67 with $3.4 million. These figures are based on the couple living on 60% of a $100,000 household income and adjusted for inflation; the numbers do not factor in income from Social Security.
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