A new path: Pamela Turner strikes out on her own and takes control of her retirement planning.

Declaration of Financial Empowerment

From this day forward, I declare my vigilant and lifelong commitment to financial empowerment and hereby pledge the following:

1 I will use homeownership as a foundation for building wealth.

2 I will be proactive in managing my budget, credit, debt, and tax obligations.

3 I will maximize my earnings potential, live within my means, and commit to save and invest at least 10% of my income.

4 I will ensure that my investments are properly diversified and correspond to my current financial goals.

5 I will immediately commit to a program of retirement planning and investing.

6 I will preserve and protect my assets through proper financial and insurance planning.

7 I will ensure that my children receive a thorough education on financial and business matters.

8 I will ensure that my wealth is passed on to future generations through proper estate planning.

9 I will actively support the creation and growth of viable, competitive black-owned enterprises.

10 I will use a portion of my wealth to strengthen my community.

PAMELA TURNER HAD A DECISION TO make. Last summer, working as a project manager for Computer Horizons Corp. in Mountain Lakes, New Jersey, her contract was about to expire. Rather than seek to re-up or find a position with another company, she thought the time was right to start her own consulting business, PMT Associates L.L.C. As it turns out, Turner's timing probably couldn't have been better. Within a year of her departure, the IT consulting firm liquidated its assets and in April withdrew its listing from Nasdaq.

"Relinquishing the security of a regular paycheck benefits, and other perks in order to strike out on my own was a risk that a lot of people probably wouldn't have taken," she says. In addition to PMT Associates, Turner also wanted to spend more time running her personal training business, TurneRound Fitness, which she established in 2005--where, as a certified fitness trainer, Turner works with clients in their homes.

Fortunately, the startup costs for both ventures were minimal, consisting largely of expenses such as registration, insurance, and supplies. Still, as she made the transition to an independent contractor, Turner, 34, quickly realized that implementing a savvy, yet sound investment plan that would maintain her current financial independence and ensure her fiscal future would require some careful consideration.

Always mindful about saving, investing, and having a pristine credit rating, Turner is not a novice when it comes to maximizing her money. Perhaps it was this early commitment to financial responsibility that allowed her to buy her first home at the age of 26. But it wasn't until after she decided to leave behind a six-figure salary and exit the corporate labyrinth that she fully committed to establishing a sound retirement plan.

Turner met with Keith Latimer, a financial adviser at Merrill Lynch in Princeton, New Jersey, who advised her to establish a clear long-term plan. "This was especially important since I was no longer a salaried employee but an independent contractor," says Turner.

Fortunately, she already had a good start in building a nest egg--she rolled over roughly $40,000 in her 401(k) into an Individual Retirement Account. She also had about $170,000 in equity in a rental property in Easton, Pennsylvania, and owned her residence, a two-bedroom condo in Woodbridge, New Jersey. Perhaps more importantly, Turner has no dependents and is virtually debt free--except for a small student loan balance of about $1,600 and a car lease payment.

As part of her transition, in February Turner sold her condo for $265,000, and temporarily moved into the three-bedroom rental property she owns in Pennsylvania. It just so happens that the tenants are her retired parents, whose rent covers Turner's mortgage payments. Turner purchased the home in 1999 for $175,000 and says it is now worth more than $300,000. Rooming with her parents will end this fall when construction on her new $360,000, four-bedroom home in Forks Township, Pennsylvania, is completed.

Turner has been working with Latimer for nearly a year. Initially, he was especially interested in her plan for the rental property. Latimer noticed that Turner purchased the property in Pennsylvania as an investment but didn't have a clear sense of its role or purpose within her larger retirement plan. For instance, he estimates that by the time Turner is 65, the value of the home could more than double. At the very least, by that time she could have significant equity that could play a major role in her retirement plan.

Latimer says he advised Turner to use the income generated from the property, as well as the capital appreciation, as her primary retirement plan. Utilizing Latimer's advice, Turner re-evaluated and adjusted her portfolio to accommodate her new life as an independent contractor. She began a retirement plan, making systematic contributions to a Simplified Employee Plan (SEP) IRA, depositing part of the proceeds from the rental property into the SEP plan each month. Two of the funds that Turner holds are American Funds Growth Fund of America (AGTHX) and Davis New York Venture (NYVTX)--both highly rated by Morningstar.

Finally, Turner says she expects her income to slightly increase from her past salary, at least in part, because PMT Associates recently landed a long-term contract with a major financial institution. In addition, Turner's personal training business continues to grow with a regular list of more than a dozen clients. And she continues to look ahead: Turner says one amenity of her new home is a fitness studio. "Clients will be able to come to my home-based studio for individualized fitness training," she says. "My business will grow and so will my retirement accounts."

Turner's Advice:

* Save the rent. If you own rental property, channel all or most of the income generated from the rental property into a retirement vehicle--SEP-IRA or individual 401(k). After you pay the mortgage and ongoing maintenance expenses, investing the funds in the market will help You maximize the value of the properly investment. In the end, the capital gains you capture from selling the property may not be as large as anticipated, so benefiting from the compounding of rental income can offset that risk.

* Get help. Educate yourself on all aspects of investing and retirement planning, and consult with a reputable financial adviser when necessary. There are several retirement planning calculators available on the Web that can get you started, including one from AARP (www.aarp.org). What's more, two useful Websites to help identify an adviser include the Financial Planning Association (www.fpanet.org) and the National Association of Personal Financial Advisors (www.napfa.org).

* Establish a clear and succinct plan. Envision where you want to be financially when you retire. Right now, Turner works for PMT Associates on-site at client offices four days a week and telecommutes one day a week. She sees her fitness clients during the evening and on weekends. "PMT Associates pays the bills and is funding my dream retirement goal of running TurneRound Fitness full time when I retire." Whether or not you're an entrepreneur, part of your retirement planning must factor in the type of lifestyle that you'd like to lead. Do you plan to work part time, travel extensively, or simply spend more time with family? Make sure that your projected income stream in retirement can fund whatever activities you'd like to pursue.

PHOTOGRAPH BY JERRY JACK: SEPTEMBER 2007

EDITED BY TREVOR DELANEY: [e-mail]