on to his dream of retiring at 55, though he concedes he might have to do something on his own, be it a business venture or real estate investing, to generate the income needed to make that dream a reality. Mina will settle for retiring at 62. The couple did adjust the percentage of equities in their portfolio and it paid off: In less than a year, Mina’s Thrift Savings Plan mushroomed from $150,000 to $240,000.
THE ADVICE: Maximize retirement savings at work and open an IRA. Make the maximum family contribution to get the tax benefits.
THE FOLLOW-THROUGH: Mina continues to contribute the maximum, 14% of her salary, into her 401(k). As the couple is concentrating on paying down their mortgage, Dwayne was not able to increase his contribution beyond 6%.
THE ADVICE: Refinance mortgage to extend amortization to 30 years, and consolidate debt with refinancing proceeds.
THE FOLLOW-THROUGH: The Whittingtons refinanced and obtained a rate of 6.125% on their second mortgage. They went for a 15-year instead of a 30-year. They were paying about 10%, so they stand to realize significant savings. They did eliminate their credit card debt with proceeds from the refinancing.
THE ADVICE: Finance college on the back end; seek out grants and scholarships.
THE FOLLOW-THROUGH: The couple found a scholarship for their oldest son and will help their second son payoff his loans.
THE ADVICE: Develop a corporate income enhancement strategy. Manage careers more aggressively and commit to achieving a household income of $200,000 by age 50.
THE FOLLOW-THROUGH: Mina was recently promoted and received a big raise. Dwayne has begun working on strategies that will help him increase his earning power within the next two years.
May Winner Mikia Potter
Mikia Potter wants to retire at age 45 and she’s serious about it. She will complete her master’s in business administration this month, ahead of her original 2006 timetable, and was recently promoted one level to senior systems engineer, which boosted her salary from $63,000 to $70,000. Potter made significant strides with her 401(k), overseeing its growth from $25,000 to $49,000. She’s also saved $18,000 between her checking and savings accounts, and has an additional $16,000 in a mutual fund. She only has $1,500 in credit card debt and that’s because she just returned from a vacation in Costa Rica.
But that’s not to say that Potter, now 28, hasn’t had some challenges. The one-family home she owns in Pensacola, Florida, that belonged to her grandparents suffered some damages when hurricane Ivan blew through last year. And the insurance company didn’t honor her damage claims. Furthermore, since February, she’s been without a renter. These two things have cost her about $5,000.
While Potter had great luck purchasing a second rental property—a duplex she got for $187,000 at a 6.625% interest rate, not far from her Mableton, Georgia, home—she’s having problems because one of the two tenants is not paying.
“Between managing properties and taking accelerated classes so I can graduate early, I haven’t had time for much else. So, no, I haven’t gotten married