The Moneyist: I’m a farmer in my late 30s and live a frugal lifestyle. My son has a disability. Should I pay extra on my mortgage — or save for retirement?


Dear Quentin,

I believe you recently stated that by 40, one should have three times their annual income saved for retirement. That frightened me a little. I am in my late 30s, and we have a little more than half my annual income saved in an IRA that my wife started before I knew her.

My wife and I live a fairly frugal lifestyle. We drive 12-year-old cars and have a modest house that we try to make an additional $5,000 principal payment on every year, hoping to take years of the mortgage.

When we were first married, we both worked, averaging a combined $100,000 to $120,000 per year. I work in agriculture, and my income fluctuates with market prices and the weather.

‘We soon had our first child, and it became necessary for my wife to leave her job to be with our son. He has a disability that will likely mean he will be living with us for our entire lives.’

We soon had our first child, and it became necessary for my wife to leave her job to be with our son. He has a disability that will likely mean he will be living with us for our entire lives. After we’re gone, we will likely have to set up care for him for the rest of his own life.

My parents have graciously set up an investment account with a substantial initial payment for him that will likely help him for a long time, but maybe not 30-plus years, depending on how long he will outlive us.

We are now trying to find places we can save more, and put the money into some kind of retirement investment. Now, with just my income, we usually net around $60,000 to $70,000 per year. I have experienced one devastating year where my crop was destroyed and I only had $20,000 in crop insurance to live on that year, so I’m always worried about not having a cushion easily available.

I guess my questions are: Should we put the money we’ve been paying down the mortgage into retirement, and how much might we need in our retirement with three mouths to feed? Is retirement even a possibility at this point? Farmers often work well past 65, and I am worried that’s where we’re headed.

Father, Husband & Farmer

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Dear Father, Husband & Farmer,

Money milestones — the amount of money you should have saved by a particular age, according to advisers and financial-services companies — vary. Wildly. They are goals. Something to shoot for. They also present an ideal scenario in a perfect world where all things are equal, and life goes perfectly as planned. Life rarely, if ever, goes perfectly as planned — or according to any plans. Money milestones are both useful guides and, oftentimes, unrealistic ones.

The average retirement savings for people aged 30 to 34 is $21,731, according to the Federal Reserve Board Survey of Consumer Finances. It rises to $48,710 by ages 35 to 39. Even that figure gives me pause, as much as it gives me hope. But as you can see, it’s a moving target — and given that millions of people cannot even access savings in an emergency, there is a wide gap between the rich and poor, and everyone in between.

Every situation is different. You are young and your circumstances will fluctuate. Some years will likely surprise you on the upside. Many people in their 30s are not even thinking about retirement, so you’re already ahead. “How much you need in your retirement account is a function of your expected expenses,” says Brian Walsh Jr., a senior financial adviser at Walsh & Nicholson Financial Group. “No two financial situations are the same, and retirement is expense driven.”

”Set up a budget based on your current income and expenses and find out where the majority of your cash flow is going,” he adds. “You are still young, so you should have plenty of time to save for retirement. From there, based on the nature of your business, establishing an emergency fund should be a top priority, followed by establishing a trust for your child and then saving for retirement.” Working with a financial planner on a blueprint may help put your mind at ease.

You are paying interest with your mortgage, so I support your decision to pay extra every year. That in itself is an enviable position for many people. Do what you can afford to do, and stick to your goals. They may also fluctuate based on need.

You have a mortgage and retirement savings. You’re already ahead. Be proud of what you have achieved: From what you say in your letter, you have worked hard and faced unexpected challenges with equanimity and maturity.

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