The Many Faces of Retirement: New Lives, Dashed Dreams, High Hopes
The rocking chair needs to be retired as a symbol of retirement, perhaps by a pair of running shoes.
As part of a special report on The Future of Retirement, Bloomberg.com spoke with a wide range of people both in and looking ahead to retirement. Their tales of modern retirement thinking run the spectrum, from a 33-year-old couple's crafting of aggressive plans to retire when they're 53 to a 65-year-old's disappointment at finding that even the best-laid retirement plans can go awry.
One thing unites the stories: Slowing down is not an option, whether by choice or financial necessity. Edited excerpts of conversations with Bloomberg,com's Ben Steverman follow.
Setting Out to Defy The Odds: David Mathews and Eddie Vandermark
Is early retirement an achievable goal in the 21st century? The naysayers point to risky markets, scarce pensions, longer lives and unpredictable career paths. David Mathews and his partner, Eddie Vandermark, are determined to prove them wrong.
The couple, both 33 years old, want to retire in 20 years, leaving most of their 50s -- and all of their 60s, 70s and beyond -- to roam the country. Mathews, a training manager for a large telecommunications company, and Vandermark, who works for a medical supplier, have been socking away as much as possible in 401(k)s and individual retirement accounts (IRAs). The couple, who live just north of Fort Lauderdale, Florida, are also trying to pay off debt and cut expenses.
David Mathews: When I first met Eddie, when we were 24, I said, “What do you want to do?” He said, “Retire.” So retiring early has always been in the back of our minds. In the last six months we’ve started laying down some serious plans.
Our goal is to retire by our 53rd birthdays. To see if that was possible, I put together this crazy monstrosity of a spreadsheet.It was important to resist the temptation to look at the best-case scenario -- I looked at average inflation and a below-average rate of return on investments.
I was lucky in that I started my 401(k) when I was 25. So that’s grown. It’s not huge, but it’s getting us out of the gate a little faster. The big question is what to do between ages 53 and 59½, which is when you can take money out of your Roth, 401(k) and IRA without penalties. When I started at the company I’m with now, I was fortunate that it was the last year they offered a traditional pension. That’s part of bridging the gap of seven years.
I’ve had a fortunate career in that I’ve moved up fairly rapidly and I make decent money. We have two incomes and no children, so we don’t have colleges to pay for.
One option we have is to continue moving up the corporate ladder. The downside to that is that we’d have to move to major city hubs -- like Chicago, New York, Atlanta, Dallas or Seattle --which are all fairly expensive.
The other option, the one we’re actually leaning toward, is to stay in the same categories of jobs but find ones that would give us the flexibility to move to a less expensive area, maybe someplace rural.
We live near Wilton Manors, Florida, which is gay central. But we don’t go out much to bars or fancy restaurants. If we were to move to a place that had a significantly lower cost of living, we could throw more money into retirement. We could also gain by selling our house, which we bought last year at the bottom of the bottom of the market. Prices here are starting to rise at an almost scary pace. Because we live a mile and a half from the ocean, we could buy a comparable house at literally half the price elsewhere.
Before moving, our goal is to live more frugally. We need to rein in debt. In addition to a mortgage, we have a little left on a student loan and a little credit card debt. We’ve also borrowed for toys -- an RV and our cars -- and that’s the kind of debt we definitely don’t want. Once we get all that paid off, that frees up easily $2,000 a month.
Special Report: The Future of Retirement
We like our jobs, but we’re looking forward to not being completely tied to them.We envision buying a nice RV and nice truck and, for a good chunk of the year, touring the country. We might find ways of making extra income from our hobbies, though we’re not planning on that.
We go to this one campground a lot. There are people there in their early to mid-50s who are retired. That’s what got us thinking maybe we can do this. Over cocktails or a game of cards or dominoes, we’d ask, “How were you able to retire?”
They’ve all given different answers, but the consistent theme is that they have streams of income, whether it’s from investments or rental properties. We asked, “How do you live frugally in the retirement years and still enjoy life?” That has helped us focus, and figure out what’s realistic and what’s a pipe dream.
(To see country rankings on retirement readiness, view the "Global Retirement Dilemma" graphic.)
Catering to the Colonel: Cheryl Delaney
Cheryl Delaney tried retirement. She didn't like it.
After a year of “doing nothing,” the 66-year-old resident of Milton, Massachusetts, is back at work, in a job more physically demanding than any she held in her four-decade career in banking and finance. Her last office job was a nine-year stint as a receptionist for traders and their support staff at a large investment firm. Now she provides support of a different kind.
Cheryl Delaney: I was pushed out at 60, and I didn't want to retire. For the next three years I worked for several staffing agencies, and they kept me busy. Then I decided to take a year off and do nothing.
I got bored as heck. My husband said he noticed I was starting to get in the rut of just watching TV and sitting around all day.
After more than 40 years of doing office work, I didn't want to look at another office. I really didn't. Instead, I'm a caregiver to a 95-year-old retired Army colonel. I got the job after a company whose resume-writing service I used a few years back, RetirementJobs.com, called me. [RetirementJobs.com is a website for job applicants over 50 that runs a staffing agency for elder care.]
The colonel is the toughest client in the assisted-living community where I work. Everyone thinks I'm crazy, because he's so tough. He had gone through tons of caregivers. I've been with him nine months. He's a challenge, but I like a challenge.
Some of my friends think they can just afford to live on Social Security. Not true.
Every cent that I make we can just squirrel away. My husband is a little younger than me. He'll be 64 in November. We’ve always both been very conservative as far as savings. I would assume that once he retires, I'll probably do it, too. We'd like to go down south, to Beaufort, South Carolina. Something about Beaufort is very appealing, very community-oriented. The cost of living is probably a third lower than it is in Massachusetts.
Some of my friends think they can just afford to live on Social Security. Not true. A lot of people think Medicare is free. They don't realize you have to pay for part of it. Some of my baby boomer brothers and sisters are just not ready, unfortunately, for retirement. I don't think we are ready yet either. If you really like to live -- to be able to go out once in a while to a dinner and a movie, for example -- you've got to have money.
The Retirement School of Rock: Joseph Sasfy and Marianne Mooney
Joseph Sasfy and his wife, Marianne Mooney, were financially secure enough to stop working at the end of 2011. What they didn’t want to do was slow down.
The couple moved to Asheville, North Carolina, for the area’s hiking, bird watching, mushroom hunting and microbreweries. They were also drawn to the local Osher Lifelong Learning Institute, where Sasfy, 65, soon took on a new role -- teaching rock history.
Joseph Sasfy: For more than 25 years, I was a music consultant, working mostly for Time Life Music compiling CD collections. Our life was good in Washington, D.C., but it was getting a little pat. We enjoyed what we were doing but really wanted to challenge ourselves, too.
We stumbled on Asheville. You come here for a vacation, and you kind of get seduced. The town has so much energy, so much buzz. It was so much livelier than some of the places we looked at in California, where people retired but you got the sense they were in a literal sense retiring. That wasn’t really our plan. We felt like we’ve got a whole other lifetime to start working on.
One of our plans here was to possibly get involved in the business community, where there are a lot of creative younger people starting new businesses.
We chose a place where we didn’t know anybody, where we’d have to build a community and find things to do. In the Washington area, you felt there was a chasm between older people and the young people who dominate the professional world. In Asheville you don’t feel like there’s a barrier to going out to clubs, breweries, concert halls and interacting with young people.
One of our plans here was to possibly get involved in the business community, where there are a lot of creative younger people starting new businesses. We met a talented young baker and chef who were launching an upscale pizza restaurant. We became a part of that, as investors, helpers and facilitators. My wife was a professional chef at one time, so she knows a lot about food and the food world.
I had taught earlier in my professional career, and the one thing I missed in the music business was teaching. Having this lifelong-learning institute here was a major part of our decision to move to Asheville. The teachers are not paid, but there’s no dearth of volunteers.
I thought I’d teach classes on rock history. I didn’t want to do this if I got a class of well-intentioned students who want to hear “oldies” and talk about memories. That’s fun -- there’s nothing wrong with that. But I wanted to teach a course about what this music means and how it interacts with American history and culture.
I figured I’d start back in the 1950s and see how it went. My first semester, we only got to 1958. The students have been fabulous. Everybody said, “Keep going.” In my second course we went from about 1958 to the early 1960s. Now I’m hoping to get through 1964 and 1965, two of the most exciting years in rock music history. It’s just a tremendously creative period in American popular music, when the music doesn’t seem trivial anymore.
The pizza place is open. It’s doing fantastic. The guys who started it have had to work their asses off. We’re really proud of what they did. We hope to do more of that here in Asheville.
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, 65, 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.
Steve Twomey: 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.
There were all sorts of great plans, but they had to go by the wayside.
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.
A New Life Abroad: Rich Holman
At 63, Rich Holman decided to uproot his life in Naples, Florida, and move to Medellin, Colombia, to start a real estate business. He’d never worked in real estate before, and barely spoke Spanish.
Holman is now 69 and says his business, First American Realty Medellin, has more than 30 employees who oversee rentals, sell properties and help other English-speakers make the sort of overseas leap that he made.
Rich Holman: I’ve had several careers. I helped start a publishing company. At one time, my stake was worth more than $10 million, but less than two years after that we had to file for bankruptcy and I received nothing. Then I went into investment banking and got caught in the Nasdaq collapse in 2002 and lost half my net worth, about $500,000. My last career was in mortgage banking.
I first came to Medellin in August 2006. I thought, “This is the world’s best-kept secret.” On the second trip I switched from relaxation mode to thinking, “I have to consider buying something here.” I told my Dad. He said, “What? Are you crazy?”
The perception of Colombia is very different from the reality. The big change in the country was in 2002, when Alvaro Uribe came into office as president. The security improved and overnight this country started changing. You could see it in the real estate prices starting to go up. I’ve been offered more drugs in the states than I have in Colombia.
I really wanted to move. I lost my father in 2007 and moved here the next month. Starting the business was a tremendous amount of work, though my initial out-of-pocket expense was less than $10,000. This will give you an idea of the cost to live here: Because I purchased my own place, I could literally quit working and live off my Social Security of $1,800 per month. For a frugal lifestyle, my monthly costs would be $1,500. So it’s always been nice to know I have a backup in case the company never worked out.
As it stands now the company is doing well. I’m down to 50-hour workweeks, we are profitable and I am about ready to start drawing my first paycheck. It’s fun and it’s all starting to come to fruition. I think it’s critical that you keep track of your stress, and that you let it be positive stress and not negative stress.
I'm single and my social life has never been better. There's no age discrimination here -- it's an advantage to be older.
When it comes to moving abroad, it’s not as hard as you think. The thing that holds back a lot of Americans is that they get entrenched with family stuff. That’s one thing that you really can’t change. I’ve been trying to get my brother to come down here since I moved here. My son has been here a couple times.
I only had some high school Spanish when I arrived. I can converse in Spanish pretty well right now. I love trying to fit into this place. I’m single and my social life has never been better. There’s no age discrimination here – it’s an advantage to be older.
When I was 63 in Florida, it felt like people were looking at me like I should be getting ready for the nursing home. It was like, “I’m done, it's over.” Here, the last quarter of my life is the best quarter of my life. I see guys my age coming down and they look like they’ve got one foot in the grave. I see them six months later and they look like different people. They’re living again.