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I’m a 35-year-old father of four with $135,000 saved for retirement. We’ve always lived paycheck to paycheck. ‘What am I doing wrong?’

Hello,

Feeling like I am in dire retirement straits. I am a married 35-year-old father of four and provide 95% of the income for my family. Most of my career we have lived paycheck to paycheck. I have managed to save approximately $135,000 in retirement funds and we have a rental property, which could supplement our retirement. 

We are currently maxing out our retirement savings per IRS guidelines, but it still seems like we will be short. What am I doing wrong?

See: I’m 62, unemployed, living off savings and waiting on Social Security—‘Can I go fishing for the next 25 years and forget about work?’ 

Dear reader, 

First: Don’t panic. Yes, the 30s are a critical time to save for retirement but you already started in the midst of so many other financial obligations, so you’re already ahead of the curve. 

The fact that you’ve already amassed $135,000 with a family of six and while living paycheck to paycheck most of your career is a great feat, and it’s obvious you care about ensuring your future financial security—good for you. 

Financial advisers agree. “Accumulating six figures of retirement savings by age 35 and maxing out a retirement account is a fantastic start,” said Alec Quaid, a certified financial planner at American Portfolios Denver. 

You mentioned you’re maxing out your retirement savings. I’m not sure what kind of account you have but if it’s a 401(k), that’s wonderful. If you have access to a 401(k), I suggest opening an IRA as well. You might want to consider a Roth, which is funded with after-tax dollars. Even if you can’t manage to max that one out too, any additional money earmarked for retirement will help in the long run. 

Read more retirement news and advice on MarketWatch

Now if you’re already doing that, consider having your spouse also open an IRA. Even if your spouse doesn’t earn any money, spousal IRAs allow the married couple to contribute to the account on behalf of the spouse who does not work—that’s more cash stashed away for your future. If you go the Roth way—for either your IRA or your 401(k)—and you follow the rules, that money will be tax-free at retirement.

Right now, you may not want to work with a financial adviser, but in the future it is worth considering. They could help you achieve any financial goals you have with input on investment positions and contribution amounts, and they can also provide peace of mind for when you’re worried you’re not doing enough. 

Read: Want to be a better investor? Sign up for our How to Invest series

Also keep perspective. Using the Rule of 72 and assuming an average rate of return of 7%, it takes about 10 years for a person to double his investment, said Amie Agamata, a certified financial planner. So for example, by 45 years old, your $135,000 would be $270,000. By 55, it’d be $540,000. And by 65, you’re looking at a little over $1 million. Of course, this is just a generic rule of thumb (basically, you divide 72 by the percentage rate to calculate how many years it will take for money to grow) and does not take into account additional contributions. You could imagine how much better off you’ll be since you’re committed to saving more—compound interest is an incredible thing. 

There are a few other considerations you can make to feel extra secure in your finances. For example, you might want to consider a level term life insurance policy, which would protect your family if something were to happen to you, said Thomas Scanlon, a certified financial planner at Raymond James. You should also have a basic estate plan with a will that lists guardian(s) of minor children in the event both parents die—without this, the court decides, and you may not want that. 

Back to your retirement savings. Ultimately, there are only two real ways to really beef up a retirement account (or any savings, for that matter). 

The first: Earn more. The second: Spend less. Sometimes people feel like they can’t do either in their current situation—and that’s completely fine too. You also shouldn’t deprive yourselves of everything you may enjoy, so if you’re living within your means and you’re spending on what you and your family need and care about, keep at it. But while you’re in this moment where perhaps you can’t earn more or spend less, take the time instead to make a plan for your money. 

Want more actionable tips for your retirement savings journey? Read MarketWatch’s “Retirement Hacks” column

Look over your budgets or your credit card and debit card statements and see that every dollar is going toward exactly what you and your family hope it is. If not, readjust. Think about a side gig if you or your spouse have the mental and physical bandwidth to do so, or start strategizing for how you’ll get a raise or find a better-paying job (where you’d also be happy—that’s important). The new year is a perfect time to assess where you are and where you want to go. 

“It’s normal to go through periods where it can be tough to save, especially if you have four kids!” Quaid said. “The key is to continue to be intentional about the savings you can do now and make incremental increases when possible. For example, when you receive a raise or you finally pay off some debt, make sure you purposefully direct some of those funds toward retirement savings.” 

Readers: Do you have suggestions for this reader? Add them in the comments below.

Have a question about your own retirement savings? Email us at HelpMeRetire@marketwatch.com

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