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Retirement Planning Gone Awry: Steve Twomey

It’s shocking how quickly years of financial planning can unravel if you lose a high-paying job and don’t get another one for a few years. Steve Twomey had his first brush with that painful lesson when he lost his job in his mid-40s after a long career in telecommunications. Other twists of fate compounded the pain later in life. Twomey, now 65, told his story to Bloomberg’s Ben Steverman. Below are edited excerpts:

I worked for a company in Pennsylvania for a couple years as the vice president, and then, quite honestly, I got fired. I was unemployed for two years at age 46 and 47. In terms of retirement funds, that absolutely wiped me out.

I was in a really difficult position. You can’t go from making mid-six figures every year and then all of a sudden the next month you get nothing. Trying to recover from that is almost impossible. You may have been in relatively good shape -- I did do all the right planning and all that -- but you can get in bad shape very quickly.

A few years later, I was in my mid-50s trying to catch up. A headhunter called me about a job in Jamaica, and I kind of took a flier on it. I moved to Jamaica, and then they deregulated their telecommunications markets. So I thought that was a good time to take a shot at my own business. My business had a plan to build a network, but the early 2000s were not great in terms of getting money for telecom. That just didn’t work out. Eventually we couldn’t keep up anymore.

I never really got back to a comfortable place. Plus, my wife and family didn’t live in Jamaica, so I was running two homes. I got close to selling the business. I had a buyer, but the government ended up not giving us a license, which the deal was dependent on. That cost me $3.5 million that would have gone in my pocket. When I shut the company down, I had to take Social Security early -- which in its own right is a killer because you lose 50 percent of the benefits.

I always wanted to teach, and I did have an opportunity to do that as an adjunct professor. I make about $34,000 teaching graduates and undergraduates business management at Suffolk University in Boston. When you take Social Security early, you're restricted in what you can earn elsewhere. For every $2 I make, I pay back $1 over the $15,000 limit . So I lose my Social Security for about five months. That doesn’t help much.

However, I love teaching and wouldn’t want to give it up. All I’m trying to do is manage things until the middle of next year. I turn 66, which is my normal retirement age. Then my limit [for what a retiree taking Social Security can earn] goes above $40,000. That will probably straighten things out.

I’ll probably have to keep working into my 70s. I like to travel, and I would have liked to have done a lot more of that in retirement. That’s almost impossible now because it’s just too expensive. Playing golf becomes a challenge because of cost and a lack of free time. I want to have a place in Florida because I hate the winter. At this point that looks probably not possible.

So there were all sorts of great plans, but they had to go by the wayside. Still, teaching is a job in which as you get older, you stay stimulated. You have to keep current. I think that’s good for you mentally.

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