(MONEY Magazine) – Keith Bruce and his wife Sandy Peletier are among the lucky ones: He currently earns more than $200,000 a year as a pilot for Continental Airlines, and he stands to benefit from a lucrative company pension when he retires later this year.

But you'd never know it from the way they live. Though they could easily afford a larger home, they own a charming but small two-bedroom condo near downtown Denver. Peletier drove her last car, a Honda Accord, for 14 years. The 1988 Toyota Camry that Bruce had until last year would stay in fifth gear only with a bungee cord wrapped around the stick shift.

Why the austerity measures? Bruce, 59, had long felt pressure to get out of the airline business on his own terms. "I've watched a lot of financial disasters in my industry, and it really made me sensitive to the need to prepare for the future," he says. Indeed, Bruce saw several former Air Force buddies lose jobs and pensions when Braniff went bust in 1982. His first airline job was at People Express, which failed and was bought by Continental, which itself nearly folded twice in the 1990s. Meanwhile, pilots at both United and US Airways recently lost most of their pension benefits. For her part, Peletier, 55, had seen how ill-prepared her own parents were for retirement and vowed not to make the same mistake.

So ever since marrying in 1993, their primary focus has been on saving for early retirement. After a 25-year career as an interior design architect, Peletier retired from full-time work in 1997. Bruce will leave Continental in November.

They've had to make up a lot of ground to get where they are now. Though Bruce would be entitled to a substantial pension, they knew that alone probably would not pay for the active retirement they envisioned. (For example, they plan to stay in Denver, despite its high cost of living, and to travel a lot.) Neither had brought major retirement savings to the marriage, which was the second for each of them. Bruce had gone through a costly divorce and had spent years paying alimony as well as child support for his two now grown children.

Even when their incomes shot up in the mid-'90s (commercial pilot salaries, in particular, ramp up with seniority), they fought to keep their expenses level and banked the surplus. Peletier's 401(k) lost 80% of its value during the tech crash in 2000. Yet they still managed to retire all their nonmortgage debt and sock away some $200,000 in savings and investments.

With that cushion, Bruce was able to play it safe with his pension. Worried about the industry's long-term health, he went for a lump-sum payout even though he might have come out ahead had he chosen lifelong payments. In November he'll collect $850,000. Bruce and Peletier will be covered by the airline's health plan until he is eligible for Medicare. (Peletier will be 60 then, so they'll have to pay for her coverage out of pocket.)

Aware that even $1 million-plus won't necessarily be enough to live the way they want to for the rest of their lives, Bruce has been laying the groundwork for a part-time consulting business that will help them hold off on tapping their savings. He'll run pilot-training workshops; Peletier, who continues to do part-time design work, will handle the marketing. They'll include sessions on financial planning for pilots. "Being financially prepared helps us sleep at night," he says. "That's a lesson we want to pass on."

INITIAL SAVINGS WITHDRAWAL RATE[1]

NOTES: [1] Assumes that withdrawals grow 3% a year to account for inflation and a portfolio invested in 60% stocks, 30% bonds and 10% in short-term bonds. SOURCE: T. Rowe Price.