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.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
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.”
Related content
-
Moves to Manage the Soaring Costs of Owning a CarIt's costing more and more to keep a car on the road, but you can drive some costs down. Here's how to get a better deal on insurance premiums, repairs and gas
-
Here's What You'd Have If You Invested $1,000 Into Coca-Cola Stock 20 Years AgoEven with its reliable dividend growth and generous stock buybacks, Coca-Cola has underperformed the broad market over the long term.
-
The ‘Common Man’ Rule of Retirement SpendingThe 'Common Man' rule is for the 'armchair' retiree. It’s a conservative way to live comfortably and leave the rest to heirs.
-
Are You Prepared to Live Longer? MIT AgeLab Answers QuestionsA new measure of longevity readiness indicates that for many Americans, the answer is no — and suggests what is needed to get on track.
-
I'm Retiring With $3.3 Million at Age 65 and Don't Want to Touch My Portfolio's PrincipalWe ask financial professionals for advice.
-
I'm a Wealth Planner: These 3 Steps Can See You and Your Heirs Through a Wealth TransferBoth givers and receivers need to be seriously strategic about communicating, understanding tax efficiency and leveraging smart money moves.
-
Should You Skip the Wait and Prepay Your Retirement Dreams?He bought his retirement home more than a decade before he plans to retire. Was it the right move?
-
My $1.2 Million Vacation Home Has a $360K Mortgage. I Don't Need My Upcoming $45K RMD. Should I Use It to Pay Down the Mortgage?We asked wealth planners for advice.
-
Unwrapping Your Estate Plan for Your Kids: A Gift That'll Keep Giving Long After the HolidaysThe holidays offer families a perfect opportunity to discuss important, often difficult topics like long-term care, estate plans and legacy.
-
I'm a Financial Planner: Here's How You Can Use AI to Improve Your FinancesApps can help with budgeting, saving and investing, financial coaching and debt management. But providing your personal information can also raise your risks.
