Demographics
Clients: Radhika
Age: 29
Occupation: Speech Therapist
Primary Goal: Taking advantage of saving money while living at home to buy a home, help her parents retire, and explore possibilities around early retirement
The Situation
Radhika has been working as a speech therapist for a few years. She’s been living at home with her family throughout her 20s, and saving money aggressively in her TDA/403(b) and 457(b).
Radhika is grateful to have the opportunity to live at home and save as much money as she can. However, she knows that her parents don’t have a retirement plan of their own, and that in future years, she and her brothers will need to step up and provide for them.
Radhika wants to know if she’s saving enough and in the right places to support her parents in the future, and also to buy a home with her fiancé in the next few years.
Beyond that, Radhika has been reading about FI/RE, and wondering if it would be in the realm of possibility for her to retire in her early 50s, while also supporting her parents.
“I keep saving saving saving, and I’m always anxious that I’m not doing enough. But really, I have no idea how much I’ll need or how to figure out how my family responsibilities and my own big goals fit together.”
The Approach
Radhika is looking for concrete numbers and an articulated set of steps to hit her various goals - the “not knowing if it’s enough” is causing her to worry and not enjoy her money in the present.
The Results
Before creating Radhika’s financial plan, we needed to discuss and define Radhika’s goals, from retirement living expenses, to future home budget, to expectations for her parents. Radhika didn’t have all of the answers for this info yet, so part of her plan was a guide to help her get this information.
Radhika’s plan included:
An outline of questions to discuss with her brothers and parents to help quantify what would be needed to support her parents’ retirement.
Trade-offs between current spending and saving for retirement — Radhika knows how much she’ll need to save monthly for retirement to retire in her early 50s, mid-50s, and early 60s. As she gets older, she can now make decisions on retirement savings versus taking an occasional vacation.
Steps on how and where to save for a future downpayment — Radhika had only been saving in her retirement accounts.
For Radhika, the goal was a set of steps to achieve her goals and peace of mind to allow her to spend money on “fun” things.