He Wants to Retire in 15 Years, When He Turns 65. A Financial Adviser Weighs In.

Mr. Lynch works in social services at a psychiatric hospital, earning $60,000. His wife, Krista Lynch, 52, is a part-time waitress, earning $30,000 a year. The couple, who live in Lake Ozark, Mo., also receive $500 a month in child-care credits from the recent stimulus package.

Together, their two traditional IRAs contain $285,000. They have a combined $15,000 in two 401(k)s and each contributes 3% of their income, which their employers match. They have $15,000 in savings. In addition, Mr. Lynch has a small pension that will pay $325 a month when he turns 59½.

The couple still owe $160,000 on their house, which they say is valued at $385,000. They have a 30-year, fixed-rate mortgage at 3.75%. To have the mortgage paid off when Mr. Lynch retires at age 65, they are adding $300 a month to their required minimum of $1,100. They owe $11,000 on a car loan and pay $310 monthly on that. They have no other debt.

Other monthly expenses include: $1,200 for groceries and dining out; a $450 donation to church; $200 for utilities, water and sewer; $200 for gasoline; $210 for internet, phone and cable; and $700 for miscellaneous expenses. They pay $500 in car insurance every six months.

Mr. Lynch pays $350 a month for health insurance for himself and the children through his employer’s plan. Mrs. Lynch has private insurance which costs $300 a month. It would cost $250 to add her to the family plan, but Mr. Lynch says her plan is better for her and worth the extra $50.

Advice from a pro

John Pilkington, a Vanguard Group financial adviser based in Charlotte, N.C., recommends that the couple try to save between $15,000 and $17,000 annually. They saved about $9,000 last year.

Mr. Pilkington says they should go over their spending to find overlooked opportunities to save. When he subtracted their expenses and estimated taxes from their earnings, he found a gap of about $20,000 that didn’t include the child tax credit.

He recommends both spouses open Roth IRAs and each try to contribute the maximum $7,000 a year. If they need to withdraw money for an emergency, their posttax contributions (not earnings) can be accessed tax-free before retirement. And during retirement, withdrawals are tax-free, which reduces their tax liability down the road.

Another way to save, says Mr. Pilkington, is to rethink the extra mortgage payments they make. The $3,600 a year they spend on extra payments can instead go into their retirement accounts. Over a 15- or even 30-year period, the amount they are likely to earn in index or mutual funds is more than the amount they will save on interest payments. The Roth could then help pay off the mortgage when they retire.

The Lynches also should shop for a 15- or 30-year mortgage with a lower rate than their current 3.75%. A lower rate can help them invest even more in their retirement accounts.

Saving for college is somewhat of a stumbling block, says Mr. Pilkington. He suggests the couple invest the $500 child tax credit in a 529 college-savings account, to avoid being entirely dependent on loans or financial aid to fund their children’s higher education. They should put in $300 monthly for the 16-year-old and $200 for the 12-year-old.

He agrees buying private health insurance for Mrs. Lynch makes sense when it’s better for her and costs about the same.

Lastly, because of the child tax credit, the couple might want to make sure they don’t need to adjust their withholding on their W-2 forms. Since the child tax credit is being paid up front, it could affect whether they get a refund or owe when they file income taxes.

Ms. Ward is a writer in Vermont. Email her at reports@wsj.com.