The $33,000 Retirement: One Man's Surprising Path to Financial Freedom at 61

retired couple in a garden — (Image credit: Getty Images)

For Paul Alto, a lifelong Cleveland, Ohioan, the plan was always to retire at 65. But after having surgery to treat two hernias at 61, he knew he couldn’t go back to lifting 100 to 150-pound boxes in his shipping and receiving job.

Even though Social Security and his pension wouldn’t kick in until he turned 62, and he wouldn’t have any income coming in for a few months, he decided early retirement was the best option.

“My wife had been saving money. We had enough money to keep living until the transition,” said Alto, who turned 62 in late June. Alto will receive his first pension payment later this month and his first Social Security check in August.

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In the meantime, he is drawing about $150 a month from the $33,000 he saved in his 401(k) and supplementing that with money in his savings account. The couple has been able to sock away some money over the years, not even close to the amount financial planners say you need to live comfortably in retirement, partly by selling their home and living a frugal lifestyle as they raised three children who are now 38, 33 and 32.

Alto and his homemaker wife were able to get discounted health insurance through the Affordable Care Act for about $200 a month. Alto says he can swing that monthly payment until Medicare kicks in at age 65.

Paul Alto, at his home in Cleveland, Ohio

Frugal for the win

While this may seem like a nightmare situation to some people — those who had planned to work for three more years and amass more savings for retirement, particularly when the financial planners tell us we need more than $1 million to retire comfortably — Alto couldn’t be happier.

He has always lived a frugal lifestyle and hasn’t been afraid to cut back as he’s gotten older. He got rid of cable a few years back and uses an antenna for TV, doesn’t travel, and about nine years ago started renting. He and his wife rent a three-bedroom house for $1,200 a month. That cuts down on the expenses that come with owning a home.

“I grew up in an old Italian house. If you make a dollar, you put 25 cents in the bank. I’ve been saving all my life,” says Alto. “I don’t travel. I married my dream girl, whom I met when I was 16. She cooks and bakes. My family owns a restaurant, and I don’t even go there.”

It’s not because Alto is cheap; it’s that he thinks his wife is the best cook in the world, so why should he spend money eating out? “Don’t get me wrong, if I get free tickets to a baseball game, I’ll go, but if I don’t have the money to spend, I just don’t go,” he says.

Modest lifestyle carried into retirement

Ever since getting married, Alto has lived a modest life, focusing on family and education, instead of materialistic things, which he says has paid off.

His grown children work as a doctor, a lawyer and a teacher, respectively. He is the proud grandfather to six grandkids, all five years old and younger.

Alto didn’t spend money on vacations when his kids were growing up; instead of trips to Disneyworld or the Caribbean, he paid for Catholic school. Sure, there were day trips to the zoo, but when Alto was on vacation from work, he would use that time to get things done around the house, toil in the garden, or spend time with the family.

That approach is staying with him in retirement, enabling him to easily transition into the next phase of his life, even if it's on a tighter budget than he planned.

Don't worry about the Joneses

When friends complain they are bored in retirement, Alto doesn’t get it. Instead of wishing he was still working, he’s relishing the time he has with his wife, children and grandchildren.

While society tells people they have to live a certain way in retirement, Alto says everyone is better served ignoring that advice.

“Everybody has their own opinion (about what retirement should be like), but people shouldn’t focus on that. They should concentrate on their own life,” he says.

The older Alto gets, he says the less he cares about things and the more he cares about spending time with his family, and staying active. Those, he says, are the keys to longevity. “Don’t let society run you’re life. You’ll be a happier person.”

Donna Fuscaldo is the retirement writer at Kiplinger.com. A writer and editor focused on retirement savings, planning, travel and lifestyle, Donna brings over two decades of experience working with publications including AARP, The Wall Street Journal, Forbes, Investopedia and HerMoney.