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The Basics

What if you retire in a bad economy?

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Lessons for younger people

Younger people who have time to save for retirement have an opportunity to learn from these economic cycles and avoid the frayed nerves that so many older people are experiencing.

Monica Kulaga of Madison Heights, Mich., says she and her husband, James, both 36, have been careful spenders and savers for years, and though the process isn't painless, they can see how it's going to pay off. Even now, with Kulaga staying at home to care for their 2-year-old daughter, Lily, they're managing to save about 20% of her husband's $70,000 salary. She says their savings habit enables her to not worry about recessions and bad stock markets that will inevitably occur in the years ahead.

"We've saved so well that I've never really worried about money," Monica Kulaga says. "I used a calculator where you enter all your information and it tells you whether you'll have enough money to meet your goals in the next 30 years. We'll have more than enough."

The Kulagas' life isn't without sacrifice, but they're not into total self-denial. They eat out and take frequent vacations, but they both drive 10-year-old cars and are leaning toward repairing their aging dishwasher rather than replacing it.

Saving money is a mind-set, and it takes time and effort to get good at it. When the Kulagas are ready to retire, there's a good chance that a shaky economy won't put a knot in their stomachs.

This article was reported and written by Laura Bruce for

Published April 29, 2008

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