Dare to Dream? Dare to Scheme

Retirement

Kindergarten teacher Kate Calfee was horribly late getting into the retirement planning game. "I was 50 before I even started thinking about it," she laughed.

But it hasn't hurt her. The 67-year-old grandmother said she's doing fine--fine enough to have recently purchased a new home in the sky-high real estate market of Palo Alto, California. The bulk of her retirement income comes from the pension she earned teaching in public schools for 38 years. It will provide 80 percent of her average annual income--with a built-in raise--until the day she dies. Calfee also managed to diversify her holdings by socking away a healthy chunk of her income into tax-sheltered investments. It came to nearly 13 percent of her annual income, but Calfee said the sacrifice was worth it. She continues to maintain mutual fund holdings, and stubbornly refused to sell during the recent round of stock market fluctuations.

"I'm well-diversified in the markets," she said, giving credit in no small part to her accountant, who has advised her on many of her fiscal decisions over the years.

Her advice to the not-yet-retired: "Keep working as long as you're physically able to and as long as you have the spunk and the desire. Sign up for as many (retirement) plans as you can within the law. And find out what the tax-related consequences are on any decision you make."

Money Insider Jeff Fleming advises of the benefits of planning and saving, even when starting late. Calfee had the discipline to do without luxuries through her working years. She saved a large portion of her earnings instead. But she is now able to enjoy financial independence as a result. She can choose to work for the fulfillment she gains and not because of her financial requirements.

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