A Comfortable Retirement

Theresa Knight and her husband, Johnnie, are proof that slow and steady wins the race. The couple paid off the mortgage on their New Orleans home 10 years ago, has a new car, and take trips to Europe or cruises to the Caribbean at least once a year. The
Knights also paid for their three children to attend Catholic high schools and paid half of each child’s college tuition.

Theresa, 66, and Johnnie, 67, are both retired teachers. They weren’t earning extraordinary incomes nor did they hit the jackpot with some fabulous investment. They earned about $80,000 between the two of them before they retired in the mid-1990s — and they didn’t subscribe to fancy investment plans. They’ve accomplished all they have by going back to the basics — setting goals and saving their money over time to attain them.

“I’ve always been a person who saved,” says Theresa. “When we got married, we tried to live within our means. We bought the house and other things, too, but we made sure we didn’t get bogged down with too many bills.”

The Knights made their children’s education their first priority and were able to set aside about $200,000 in various accounts by following DOFE Principle 5: to engage in sound budget, credit, and tax management practices. Even before they were married, the couple started saving money so they would have something to start off their new life together. “We saved so that we would have enough for a down payment for a house,” says Theresa. The Knights bought their home for $26,000 in 1966, a year after they were married. Today the house is worth more than $100,000, and they continue to make improvements to the property.

In the early years of their marriage, when Theresa was making $4,300 a year, the couple managed to put 2% of every paycheck into their credit union account. They were able to save $60,000 in that account over 20 years. When Theresa retired in 1992, she was earning close to $40,000. She continued to work for two more years through a special program that allowed her to receive her pension and continue to earn her regular salary, about $2,500 each month after taxes, which was then set aside in a special account. “I did all this for my children,” says Theresa. “I knew I needed money for weddings, since I have two girls, and I had my little boy late in life and needed to know I could send him to college even if I was retired.”

Needless to say, the Knights consider DOFE Principle 10, to ensure that my wealth is passed on to future generations, to be of great importance, and the investment in their children has paid off. Their daughter, Arlene, is producing her first movie, and Theresa and Johnnie put up $10,000 to help with the cost. “It has always been hard for black people to start businesses, as we typically don’t have money that can be passed down from generation to generation for startup capital,”