Time and Retirement

How am I ever going to Retire with all these Student Loans?

Michael Lux Blog, Student Loans 17 Comments

Sometimes when I wake up and stare at the reflection in the mirror, I get a little depressed.  I’m nearly thirty, and I see that the hairline is starting to shrink and the waistline is starting to grow.  I fight back the thought… are my best days behind me?

I enjoyed high school, but I loved college.  I may have spent a little bit too much time out with friends and not quite enough time in the library, but I received a great education and made friendships that will last for the rest of my life.  Rather than eulogizing my youth, I will just say this… I made the most of my years of college and graduate school, and I have no regrets.  I have many great memories.  Unfortunately, I also have many student loans.

While these loans may make it hard for the future to live up to the standard set by the past, my plan is to ensure that my best days are still ahead of me.  How am I going to make sure that my adult life, all the way through retirement, is financially secure?  How am I going to continue to have great times and build lasting memories?  How do I make sure my best days are ahead of me?

I’m going to employ these five strategies:

Strategy 1: Find a way to make memories without spending a ton of money.

Spending a fortune on a fancy vacation may be a great way to build memories, but it isn’t the most frugal way.  I’ve learned that a camping trip is a great alternative vacation.  When you think back on your great trips, the amount of fun you had has nothing to do with how much you spent.  Along the same lines, rather than going out for a romantic dinner, cooking a meal together can be just as much fun.

It seems for every expensive way to make memories, there are inexpensive alternatives.  I plan on filling my life with these inexpensive alternatives.

Strategy 2: Put together a plan to pay off my debt.

There is no sugarcoating how big my mountain of student loan debt is.  Law school is expensive, and I needed student loans to make it happen.  My personal plan is to dedicate my career to public service and take advantage of the student loan forgiveness options available.

Even if you are not interested in working in public service, there are many ways to pay back your loans.  The key is to make a feasible plan and stick to it.

Strategy 3: Build multiple income streams.

This is a concept that is fairly new to me.  The idea here is that you do not want to put all the eggs of your financial future in one basket.  Markets crash, companies go under, and the impossible happens.  My retirement will be in many diverse places ranging from cash, to real estate, to the stock market.  I’m also considering joining my state’s national guard.  It would be a great opportunity to serve and provide another income stream for my future.  While the advertisements on this website don’t yet pay for the cost of hosting, but I hope one day that I will also be able to earn a little money from my internet exploits.  Ideally, these totally independent revenue streams will put me in a position to roll with whatever punches the future may have in store for me.

One key tip here is to recognize your talents and find a way to use them to pick up a little extra money on the side.  Over the years, it can really add up.

Strategy 4: Save what I can for retirement.

Seeing the additional withholding I have set up on my paycheck can be painful.  Paying off debt is stressful enough and I need every penny I can get my hands on.  However, I also need to make sure that I have a few pennies at my disposal when my working days are over.

If you are wondering if it is better to save some or just put everything down towards your debt, the answer is that it depends.  For example, if you are able to save for your retirement with pre-tax dollars, you have too look at the interest earned plus the tax saved and compare it to the additional interest you will have to pay on your student loans.  That is a really complicated way of saying that the math is a bit fuzzy.  I choose to put some aside for retirement and work with what is left to pay off as much debt as possible.  I think this balanced approach is the surest way to build my financial future.

Strategy 5: Learn to live within my means and embrace it.

True Story: Today I saw a gorgeous Ferrari on my walk to lunch.  I would love to own a gorgeous Ferrari.  Unfortunately, I have a ton of debt and a very limited salary.  That means instead of being the guy in a Ferrari, I’m the guy who goes to Subway gets the two dollar sub, fills out the customer survey every day so I get a free cookie, and washes it all down with a complimentary water.

When I walked back from my lunch I caught myself in a deep state of envy gawking at the Ferrari and ignoring everything that was going on around me.  In my head I heard a voice: Take a picture, it lasts longer.

So i did:


Sadly, this car is not in my budget.

The point of this story is that I am beginning to learn how to live within my means and embrace it.  While an Italian super-car may be out of the question, I’m lucky to receive a steady paycheck in one of the wealthiest nations on Earth.  I have it pretty good.  I may long for it to be even better, but I’m not going to let what I lack get in the way of enjoying what I have.  In order to accomplish this, I have to make sure there is a healthy gap between what I earn and what I spend.  And just because I spent $2.18 on my lunch, doesn’t mean I didn’t enjoy it.  Plus, today I got an extra treat.  I got to enjoy the beauty of the Ferrari without the huge car payment.

How are you planning your financial future?  What is your secret to enjoying life but still making sure that your best days are ahead of you?

  • Definitely build multiple income streams! This is something that we have really been working on over the past year.

    • I really like the logic of this approach. It seems like common sense, but it is a lot of hard work. I think it will pay off.

  • The most pain-free way is frugality.

    It’s not what you make, it’s what you spend. Period.

    I think Strategy #1 is The King – the best memories come from experiences with friends and family, not from things.

    • There is always temptation to stray from strategy #1 but I agree, it is definitely the way to maximize your time and money.

  • Sean McNulty @ MyMoneyPlatform

    Nice article Michael,
    you hit a few nails on the head there. Nice homework on the tax saving of the retirement contributions versus the debt pay-off. A lot of people only assume that paying off the interest heavy debt first is the way to go, but of course they are wrong. I think there is a lot to benefit from being frugal. First time I noticed I had to cut back I actually starting enjoying seeing how much I actually saved every week…then made a competition out of it. I was no worse off after my lunch (like you) I just didn’t become a slave and give in to the marketing kings selling $10 lunches with minute portions.

    • Thanks Sean! I’m glad you enjoyed it. You are definitely right about how satisfying being frugal can be. I can’t imagine spending $10 a day for lunch. It is definitely a good way to save money.

  • Good tips! I especially like #1 and #5…embrace frugality and find alternatives to enjoy life. There are so much more to life than fancy cars =) It’s hard not to have a little envy when you see someone with a nice car, but honestly you’d probably get tired of it after a short time. My car gets me to where I want to go…don’t need something that flashy…and don’t need a car that attracts more speeding tickets! Material things really only bring temporary joy.

    • “Material things really only bring temporary joy.”
      I love this thought! Its very true and the idea behind frugal living.

  • I cut back on most of my expenses such as clothing and other unnecessary luxuries. However, on certain things like food I definitely don’t cut back. Clothing is for other people to see, whereas good food is for myself to enjoy.

    • I think everyone has one or two areas on which they like to splurge. I call this budgeting for fun. If you don’t make sure there are things in your life to enjoy, keeping a budget will be miserable and it will fail. There is no need to be ashamed of spending a little extra money on something you love.

  • Good for you! I grew up in a very wealthy family and it was hard to make that transition from Mom/Dad’s money to my own. I wanted to keep living to the same standard I had under their roof. Thank goodness I figured it out before I was in too much debt! That was a long time ago and now I live like my Depression era grandmothers taught me. 🙂

    It has been so long since I started living on real money instead of credit that I don’t miss the things I can’t afford (or don’t want to afford.) I don’t believe all debt is bad, but buying stuff you don’t need with a credit card (or buying a Ferrari when your wallet can afford a Honda) is not my idea of good debt!

    • Great points Betsy!

      Living on credit card debt my seem like the easy life but it definitely comes at high cost.

  • I don’t think I’ll ever go back to school full time. I’m in scuba diving school right now which is less than 7 days long and it feels so weird having homework to do. I spent my entire Saturday reading chapters, watching instructional videos and answering questions. Man I was burnt out in 1 day ha.

  • I was able to quickly pay off my student loans by living on a college kid budget until well after college. I am past that now, but still try to live on a pretty tight budget for most of my spending.

    • Keeping the budget tight is definitely the way to go. It is the quickest way to get rid of the loans.

  • I suffer from “what if the best days are behind” syndrome too, but we still have plenty of time. If you focus on making more, you’ll have your loans out of the way quicker than you thought and plenty of time to enjoy the rest of your years.