A Gen-X'er's Retirement Plan

How one couple mapped out a straight financial path

Tom just turned 31 and realized he needs to get serious about financial planning. He's facing some challenges, including the need to save for retirement.

Tom knows that one key to retirement planning is to start saving as early as possible. But he has several financial responsibilities. Tom and his girlfriend Amy, also 31, are getting married this year. Tom has a $1,600 credit-card balance, and Amy owes $20,000 on a student loan. They'd also like to save for a down payment on a home.

Mindful financial decisions

Tom and Amy work for the same company, and their employer matches 50% of the first 6% of eligible salary contributed to their retirement savings plan. Tom and Amy contribute 4% of their salaries to take advantage of the match. They would like to increase those contributions gradually, without neglecting their other obligations and goals. With automatic savings increases, they'll boost their contributions by 2% with their next raises and each year after that, even when they've reached the employer's match maximum, as this is a good "forced savings" plan and they won't notice the missing income.

The couple recently began carpooling to work and brown-bagging their lunches to free up around $300 a month. They will devote $150 of their monthly savings to paying down their debt and the other $150 to their retirement plans.

With a solid financial plan in place, Tom and Amy are looking forward to their life together - with a comfortable retirement in the future.

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