We dated for six years before we got married. For much of that time, we lived together and combined our finances. We got married and bought a house six months before I graduated from college. The house cost $39,000, and the interest rate was over 10%. My ex-husband had a county job with a pension and insurance. We felt like buying a house and having a pension were all we needed to do to plan for our future. At the time, neither one of us was very financially literate or retirement savvy. 


The author, Rebecca Chamaa.


I thought that our future was in good financial shape, until the marriage unraveled and we ended up in front of a mediator, splitting up our assets. Because I made significantly less than him as a social worker, I got the house (and the mortgage), and he agreed to pay me a settlement. I had to use the check he wrote to me each month to help with the bills and to buy things to keep me competitive, like a home computer. 

I was way behind on retirement planning

Every financial calculator I have played with (and I have done the calculations on them a lot), shows how much easier it is to reach your retirement goals of, say, $500,000 to $1 million if you start in your 20s. The amount you have to save when starting in your 20s to build a retirement nest egg that will sustain you through your golden years is significantly less than if you start saving in your 30s, 40s or, for some, their 50s. 

For example, a chart on CNBC claims you can save over $1 million starting at age 20 if you save $319 a month. If you wait just five years and start at 25, you have to save $440 per month, and if you wait until 35 (like I did), you will have to save $864 per month to have $1 million by the time you are 67 — the numbers listed factor in a 6% return rate and compounding. 

I found myself at 26, divorced, in a low-paying job, and with no way to start saving for a retirement that was now my sole responsibility. I didn't have the resources to start building an emergency fund until I was 32, had a steady job, and was engaged to be married again. 

A new view on saving for retirement

Luckily, my current husband and I had a similar view of money, namely that I should always have my own, as well as a retirement plan separate from his in case something unexpected or unforeseen happened. 

But even with a far better plan than I had ever had before (like access to a personal 401(k) and brokerage account), there was no way that the two of us could catch up and put away the $864 a month necessary to build $1 million before the age of 67. There was certainly no way I could save that much money in my accounts from my paycheck alone. 

I have been married to my husband for over 20 years now, and I still have a separate bank account and IRA. We have long since given up the concerns of getting divorced or having to split up our assets and moved on to planning our golden years — still, those fears and safeguards we set up when we were much younger stuck. 

I'm glad they did because they have given me comfort and peace of mind over the years that I would have some form of retirement if I found myself responsible for a life and bills beyond the age I am capable of or want to work. We never did make up for the late start we got investing, though. 


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Sean McClay
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STM Asset Management
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