Q&A: Getting on Track for Retirement

Amy Augenblick swears she isn't as traditional as she sounds. She and her husband, Walton Smith, both 43, are saving for retirement together. They both go to the financial planning meetings with their financial advisor--they've known him for decades, she tells me--but, the truth is, she's just not that interested.
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This article, written by Sarah Kaufman, originally appeared on Betterment.

Amy Augenblick swears she isn't as traditional as she sounds.

She and her husband, Walton Smith, both 43, are saving for retirement together. They both go to the financial planning meetings with their financial advisor--they've known him for decades, she tells me--but, the truth is, she's just not that interested.

"I don't even know how to say this without sounding ridiculously 1950s about the whole thing," she said, "but I do not pay much attention."

It's not that Augenblick doesn't care or doesn't get it--she does. It's that, like so many other Americans, she's got other things to do.

Augenblick runs Foundation for Families, an early childhood education consulting firm she started in 2000. Based in Virginia just outside of Washington, D.C., she and her husband have two daughters, 13-year-old Isabella and 11-year-old Elizabeth. She admits that, especially with having her own business, the entry point into retirement saving wasn't always clear.

"There are a lot of easy ways to get it wrong," she said. "Investing isn't like opening a checking account. The stakes are higher, there's more room for error, and it's much more complicated. I'm plenty smart and competent, and I could do it myself, but I'm really glad I don't have to."

Our conversation with Augenblick was sparked by the launch of Betterment's RetireGuide™, a tool that determines how much money you'll really need in retirement. We wanted to know how she's getting on track for retirement and what motivates her to save.

Augenblick and her husband have a variety of retirement accounts: 401(k)s, Roth IRAs, and a non-IRA retirement account. "I don't think we're knocking it out of the park," she says, "but I think we're going to be fine."

What motivates you to save for retirement?

Having comfortable, but not excessive, flexibility when the girls have kids is my core motivator. And that's the positive motivator. The scary, scary motivator is that I think women live longer than men. The women in my family live a long time, and it gets expensive to get old, medically.

When you think of a comfortable retirement, what does that mean to you?

I want to be able to see the girls grow up and whatever it is that their families look like. I'd like to be able to travel, see friends and family, maybe occasionally go see something new. I want to be able to be responsible with our medical expenses, and I want to be responsible about whenever it's time to get support and medical help as we age. It would be great if we could help the girls if they have kids do things they couldn't do at that stage.

What stage do you mean?

If they have some sort of dream or passion where they want to live in some area with schools that aren't great, I'd like to be able to help with private schools.

When it comes to retirement planning, what are the biggest unknowns?

I like to know that whoever is making the specific decisions about where the money is going is not only smart and responsible, but would play against my pretty risk-averse nature. I think my husband is less risk averse than I am and is broadly more open to taking a more aggressive approach. I look for smart and competent, and I am much more comfortable in a slow and steady mode, but I know that that's not always necessarily best.

When do you plan on retiring?

Good grief. I bet my husband will work furiously and in a really traditional way probably 'til age 60 or 65, and then he'd like to do something a little bit more creative and maybe riskier or with less income. I think I'll probably do the same thing.

Are you on track for that?

I feel pretty good about where we are. I think that our goals are pretty modest, so I think it's going to be okay.

What are your general feelings about saving for retirement?

Well, in general, I think it feels terrible. But I also feel like I'm in an unusually lucky situation, and I'm glad that we've got somebody we trust, I'm glad that my husband is interested in planning for retirement, I'm glad we have the same goals, and I think we're doing okay.

How have you prepared?

We both have 401(k)s, we have some money in Roth IRAs, and we have a non-IRA retirement account. I don't think we're knocking it out of the park, I don't think we're lighting it on fire, but I think we're going to be fine.

What excites you most about the thought of retirement?

I'm excited to get to take a nap every day, and go to the museums more, and play around in the garden, which I'm really bad at but like a lot. I'm excited to have permission to just slow down.

Amy Augenblick and Walton Smith are not Betterment customers.

More from Betterment:

Betterment is the largest, fastest-growing automated investing service, helping people to better manage, protect, and grow their wealth through smarter technology. With more than 80,000 customers and over $2 billion in assets under management, the service offers a globally diversified portfolio of ETFs, designed to help provide you with the best possible expected returns for retirement planning, building wealth, and other savings goals. Betterment also helps customers get on track for a comfortable retirement with RetireGuide™, a retirement planning tool that lets people know how much they should save and if they are investing correctly.

Betterment is a CNBC Disruptor 50 and Webby award winner, and it has been featured in the New York Times, Forbes, and the Wall Street Journal. Betterment helps people to achieve a smarter financial future with minimal effort and for a fraction of the cost of traditional financial services. Learn more here.

8 Ways To Prepare For Retirement
1. Start Saving(01 of08)
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Americans spend an average of 20 years in retirement. If you're not saving, it's time to start. Begin small if you have to, and try to increase the amount you save each month. The sooner you start putting funds aside, the more time your money has to grow. (credit:Alamy)
2. Estimate Your Retirement Needs(02 of08)
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Experts estimate that you will need about 70 percent of your preretirement income -- for lower earners, the figure is 90 percent or more -- to maintain your current standard of living when you stop working. Use this calculator to come up with a ballpark estimate. Research shows that people who try to estimate their needs in advance ultimately save more for retirement. (credit:Alamy)
3. Contribute To Your Workplace Plan(03 of08)
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If your employer offers a retirement savings plan, such as a 401(k) plan, sign up and contribute as much as you can. Your company may kick in a match, and deductions can be automatically taken from your paycheck. Over time, compound interest and tax deferrals can make a big difference in the amount you accumulate. Make sure your plan isn't a lemon by searching the website Brightscope.com. If it falls short, ask the management to do something about it. (credit:Alamy)
4. Learn To Invest(04 of08)
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How you save can be as important as how much you save. Inflation and the type of investments you make play important roles in how much you'll have saved at retirement. Know how your savings or pension plan is invested. Learn about your plan's investment options and ask questions. Put your savings in different types of investments. By diversifying this way, you are more likely to reduce risk and improve return. Your investment mix may change over time depending on a number of factors such as your age, goals, and financial circumstances. Financial security and knowledge go hand in hand. (credit:Alamy)
6. Don't Touch!(05 of08)
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If you withdraw your retirement savings now, you'll lose principal and interest; you might lose tax benefits or have to pay withdrawal penalties. If you change jobs, leave your savings invested in that employer's retirement plan. Or roll them over to an IRA or your new employer's plan. (credit:Alamy)
5. Understand Fees(06 of08)
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The cost of your investments makes a big difference. Index funds are a good option for reducing costs. The Labor Department provides this example: Assume that you are an employee with 35 years until retirement and with a 401(k) account balance of $25,000. If the returns on investment for your account for the next 35 years average 7 percent and the fees and expenses reduce this by 0.5 percent, your account balance will grow to $227,000 at retirement, even with no further contributions. If the fees and expenses are 1.5 percent, however, your account balance will rise to only $163,000. The 1 percent difference in fees and expenses would reduce your account balance at retirement by 28 percent. (credit:Alamy)
7. Open An Individual Retirement Account(07 of08)
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You can put as much as $5,000 a year into an individual retirement account (or IRA). Those 50 or older can contribute even more. You can also start with much less. IRAs also provide tax advantages. When you open an IRA, you have two options: a traditional IRA or a Roth IRA. The tax treatment of your contributions and withdrawals will depend on the option chosen. You can set it up so that an amount is automatically deducted from your checking or savings account and deposited in the IRA. (credit:Alamy)
8. Find Out About Your Social Security Benefits(08 of08)
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Social Security pays benefits that are on average equal to about 40 percent of what you earned before retirement. You should receive a statement each year that gives you an estimate of how much your benefit will be and when you can receive it. For more information, visit the Social Security Administration's website or call (800)772-1213. (credit:Alamy)

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