Ages: Frank, 43, Trudi, 42
Occupations: Systems analyst and office coordinator for the state of Illinois
Salary: $119,000 combined
Deferred compensation:
$267,000 combined
Home and land:
$250,000 estimated value
Roth IRA: $2,000
529 plan: $16,400
Online account: $2,500
Savings account: $2,000
CD: $2,000

Utilities: $800 a month
Groceries: $350 a month
Gas: $320 a month
Property tax: $1,200 a year

Frank Furbeck was taught at an early age that even if he didn’t have a lot of money, he should still set some aside for savings. He kept to that motto and is also teaching his sons Josh, 17, and Jake, 13, to follow the same direction.

“[A man] told me that every time I get a raise I should put that money into my deferred compensation, and I will have something,” Furbeck said. “He was right.”

Frank started working for the state of Illinois when he was 19. Now a systems analyst making $83,000 a year, he puts the maximum contribution of $15,500 a year into his deferred compensation, which has grown to about $227,000.

Deferred compensation is like a 401(k), where an employee defers some portion of his income to a savings plan. It’s not matched by his employer, but the money is only federally taxed upon withdrawal.

Frank’s fiancé, Trudi Morris, also a state employee, is an office coordinator in the payroll division for the Illinois Department of Human Services. Trudi had not started saving aggressively until she met Frank. She earns $36,000 a year and contributes almost half her pay to her deferred compensation by setting aside the maximum $15,500. She has saved up about $40,000.

“We don’t live extravagantly or poorly,” Furbeck said. “I call it comfortable in my standards.”

Frank and Trudi carry no credit card, auto or home debt. “I saw my mother struggle with credit cards, and I didn’t want to go that way,” Frank said. He owns all three of his cars and only pays property tax of about $100 per month for his home.

Frank and Trudi have also saved $2,500 in a money market account bearing 3.9 percent interest. Frank also has $2,000 in a Roth IRA, $2,000 cash in a regular savings account and $2,000 in CDs. Trudi plans to set up a Roth IRA, but she hasn’t decided when.

Frank set up 529 plans for both of his sons with about $6,000 each. But when Josh decided to enlist in the army, Frank transferred his full balance into Jake’s account, which now has $16,400. Frank started investing in a brokerage account for Josh with $1,500 in mutual funds. When Josh is employed, he will transfer the money to a Roth IRA. “It’s never too early to start saving for retirement,” Frank said.

Although Frank stopped contributing to Jake’s 529 for now, he plans to fund 75 percent of his college education.

Frank’s ex-wife sends a child-support check of $475 every month for both sons. Frank gives $200 to Josh and $50 to Jake. They both tithe 10 percent of their allowances, save half of what they have left and use the rest for whatever they want.

As state employees, Frank and Trudi’s health and life insurance are covered by the state. For auto insurance, Frank pays $525 for liability every six months for Josh’s car and $300 for full coverage on the other two cars.

Frank’s house, which he built himself, sits on 32 acres of land in rural Illinois. He spent about $50,000 on construction and another $4,500 on a small barn and fencing. The land and house currently have an estimated value of $250,000.

Each month, Frank and Trudi spend around $800 on utilities, $350 a month on groceries and around $320 on gas. Frank tithes $400 a month to his church.

As a hobby, Frank raises cattle and makes between $500 and $750 for each cow. He also saves on groceries since he butchers some of the meat for himself. His sons have their own cattle. Jake sold a cow and put the $850 he made into a brokerage account.

With the extra cash they have in a month, Frank and Trudi like to go out to dinner at local restaurants. They use coupons and end up spending around $25 altogether. They also save on gas by carpooling to work everyday.

As for wedding plans, Frank said, “We’ve both been married before, so the second time around is going to be us going away. No tuxes, no dresses, or any of that other stuff.” They plan to get married next year, but have not set a specific date yet.

Frank plans to retire at 53 ½ after 35 years of state employment, which makes him eligible to receive a pension for 56 percent of his salary. He also has one year worth of sick time that he’s using toward retirement and hopes to reach millionaire status by the time he’s 60. Trudi plans to retire by the time she turns 58.

“I live well below my means,” Frank said. “So when I leave state service, I will basically get a pay raise from what I’m used to bringing home.”

Our expert’s take

Frank and Trudi are well on their way to millionaire status, according to Ric Martin, a Certified Financial Planner at Steinhaus Financial Group. Martin said that Frank can retire at age 53 ½ and Trudi can retire at 53. Both of them will have accumulated $1,910,378 of investment assets by Frank’s age goal of 60.

According to Martin, Frank and Trudi could increase their standard of living to $53,250 per year in today’s dollars and still have enough money to last through age 95. Assuming a return rate of 8.5 percent, this would equate to $73,000, adjusted for inflation, at Frank’s age of 54 and Trudi’s age of 53, Martin said.

Martin said Frank should boost his college savings for Jake to between $3,700 and $7,200 a year depending on what percentage his 529 is making and assuming the cost of college today (between $20,000 and $30,000).

Frank can afford to contribute the maximum $5,000 into his Roth, Martin said. “His Roth should be invested into high growth and/or international investments based on Frank’s risk posture.” Martin also said Frank should add his CD to his money market account.

Even though Frank and Trudi have done a good job saving for the long term, Martin said they should build an emergency account covering 6-12 months of expenses of $16,080 in readily available assets, based on their current standard of living.

“They have almost no liquidity. Frank should get a line of credit against the house just for liquidity and emergency use,” he said. A bank will likely give them no more than 80 percent of the equity in their house or $200,000, according to Martin.

Frank and Trudi also need to consider disability income needs, which at their age may be more important than life insurance, said Martin. “In the event that something happens to them, they would likely get 60 percent of their pay, which is then taxed,” he said. “Their after-tax cash flow may not be enough to sustain savings and the standard of living they are accustomed to now.”

Frank should also review his life insurance because Martin thinks it may not be enough. He also recommends Frank’s deferred compensation should be a diversified portfolio of funds, iShares and some internationals sectors.

Martin said Trudi should diversify her portfolio as well and include some international sectors. “A Roth is always advisable, but as you can see, they are already saving more than enough to exceed their retirement goals,” Martin said. Instead, they could put that money towards their liquid assets.

Frank said he has a will and is setting up a trust, but Martin said he should consider getting a QTIP trust (Qualified terminable interest property trust), which allows assets to be transferred between spouses. It also keeps assets out of the estate of another person if the grantor dies first.

“In the event of his fiancé passing thereafter, the estate does not pass exclusively to his fiancé’s family and not to the Frank’s two sons,” Martin said.

- By Keisha Lamothe, CNNMoney.com staff writer

Are you a millionaire in the making? Tell us why at millionaire@cnnmoney.com.

Ages: Justin 25, Emily, 28
Occupations: Navy officer and administrator at a computer consulting firm
Salary: About $60,600 combined
TSP: $9,300
Roth IRA: $4,500
529 plan: $8,500 combined
Mutual fund: $15,200
Emergency Fund: $2,300

Auto expenses: $820 combined per month
Groceries: $360 per month
Tithe: $450 per month
Life insurance: $26 per month

After receiving an inheritance about two years ago, Justin and Emily Bergman weren’t sure what to do with an extra $50,000 they now had. Sure, they could have splurged on something they really wanted, but instead they looked for help on how to invest the money.

After a transfer from Georgia, the Bergmans wanted to use the inheritance for a down payment on a new house in Connecticut, where Justin is stationed with the Navy. They decided against buying, however, because the cost of living was much higher than they expected, so they currently rent a house on the base. They owned their house in Georgia and sold it before they moved. After making a $25,000 profit, they put $10,000 in their mutual funds and used the rest to repay credit card bills.

Around the same time, they consulted a financial planner and invested the money Justin inherited from his father. Justin started up a Roth IRA and 529 college savings plans for their daughters. They paid off credit card bills, kept $2,000 for themselves and used the rest to pay other expenses such as cremation fees, legal fees and travel expenses. They also put a $21,000 down payment on a brand new car.

The Bergmans started 529 plans for their daughters Hannah, 5, and Sariah, 1, because they plan on covering at least 50 percent of their college tuitions. They now contribute $50 a month to each 529 plan and have saved about $4,800 for Sariah and $3,700 for Hannah. They also have about $15,200 in mutual funds, earmarked for a down payment on a house they plan to buy the next time they are relocated.

“I don’t think I was as crazy about saving in the past because I didn’t make enough,” Justin said. “But now that I make more in the Navy, I try to keep my sights on being a saver.”

Justin, whose salary increases at a different rate every year, currently makes around $28,000 after a housing allowance that includes utilities is subtracted tax-free from his salary. He contributes 10 percent of his base salary into a Government TSP (Thrift Savings Plan), which is similar to a 401(k), except the money is not matched because his savings are not taxed. He’s allocated 100 percent of his money into a Lifestyle 2040 fund, which automatically adjusts his mix by currently investing in higher-risk mutual funds. As it gets closer to 2040, the investment shifts to more conservative funds.

Emily makes $800 a month working for her father at a Maryland-based computer consulting and testing firm. The Bergmans save on babysitting costs because Emily works from home; however she does not contribute to a savings plan.

The Bergmans discussed opening a Roth IRA for Emily, but decided against it since they have not yet maxed out their $4,000 contribution to Justin’s Roth IRA account. They also have an emergency fund of about $2,300 in cash that they keep in a high-yield online banking account, earning 4 percent a year.

Most of the Bergmans’ expenses come from their cars. Emily drives a 2006 Honda Odyssey that they bought brand new with a $21,000 down payment. They pay $440 a month and expect it to be paid off in eight months. Justin pays $230 a month for a used 2005 Toyota Corolla, which he plans to pay off in almost four years. For gas, the two spend about $150 a month together.

Their monthly expenses also include $360 on food by shopping at the on-base commissary, $50 for cable, about $75 a month on tap lessons and soccer sessions for Hannah, $50 on dinner outings, and about $100 on clothes for their daughters. They also tithe more than 10 percent of their monthly income to their church.

For life insurance, Justin pays $26 a month for a $400,000 policy that also covers his wife.
The Bergmans do not carry any debt and pay the full balance on their credit cards every month. Around the same time Justin received his inheritance, he also earned a reenlistment bonus that he used to completely pay off a debt consolidation of $12,000.

Justin has been in the Navy for seven years and plans on staying for another 13 years so he can receive a pension. On top of working in the repair facility for submarines, he takes night classes at the University of New Haven. He’s majoring in mechanical engineering, and his tuition is covered by the military.

Looking ahead, the Bergmans would like to buy a house in about two years and possibly have more children. Justin plans to get a civilian job in engineering when he retires. They would also like to live in Maryland, where Justin and Emily will both be closer to their families.

Even though they don’t stick to a strict budget, Justin’s grandparents served as an inspiration for wanting to save because they lived right after the Great Depression. “They weren’t always into buying flashy things and I learned from them that you don’t always have to have the best of the best,” he said.

Our Expert’s Take: The Bergmans are on the right track to reach millionaire status by the time they retire and should keep up the momentum, said Joseph Montanaro, a Certified Financial Planner at USAA who specializes in military savings.

Montanaro suggests that after the Bergmans pay off Emily’s car, they can increase their savings plan. “Once that loan is paid off, they should shift that $440 per month immediately into Roth IRA contributions for Justin and Emily. Even then they’ll have room to grow these contributions since each would be able to put $5,000 each into their Roth IRAs beginning in 2008,” he said.

Although Toyota won’t be paid off for few more years, Montanaro said if they are not already maxing out their Roth IRA, they can invest that money towards that. “I would recommend they use future pay raises and or elimination of expenses or debts as an opportunity to increase their savings and investments,” he said.

In terms of their life insurance, Montanaro suggested that the Bergmans should reevaluate their current coverage because it doesn’t seem adequate. Instead, they could fill this gap with a 20-year level term policy, he said.

The Bergmans also need to increase their contributions to their daughters’ 529 plans if they want to cover at least 50 percent of their college education, according to Montanaro. He said that at their current savings rate, they’ll only be able to cover 25 percent of Hannah and Sariah’s schooling. Montanaro said their contributions should increase to $75 a month for Sariah and $115 a month for Hannah to reach their goals.

For the Bergmans’ “housing fund”, they should start to position their savings in stable investments, such as a money market fund, according to Montanaro. “Right now it’s in a mix of stock and bond mutual funds taking more risk than they should with a short two-year time horizon,” he said.

The Bergmans should also work to build up their emergency fund and continue to increase their all of their savings, Montanaro said. After Justin exits the Navy, he’ll be able to make a lot more with a civilian job in engineering and can increase their savings even more, he said.

“With the TSP and Roth IRA start-up [from the Honda car payment] the Bergmans will be on track to have a nest egg of over $300,000 when they retire the first time - at 41,” Montanaro said. “With the same savings strategies, they should achieve millionaire status in their 50s.”

– By Keisha Lamothe, CNNMoney.com staff writer

Are you a millionaire in the making? Tell us why at millionaire@cnnmoney.com.

–Editor’s note: A previous version of this story referred to Justin as a “Navy officer.” He is a “Navy non-commissioned officer.” CNNMoney.com incorrectly stated that Emily Bergman earned $1,600 per month. She earns $800 per month. The article also incorrectly stated that the Bergmans tithe $300 per month to their church and that Justin used a reenlistment bonus to pay off Emily’s student loans of $12,000. The Bergmans tithe $450 per month and the reenlistment bonus was used to pay off a debt consolidation of $12,000.