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THE DEFINITIVE GUIDETO BECOMING

The DefiniTive GuiDe To BecominG ı The ReTıRee NexT DooR ı 2

Contents Introduction: Meet America’s Successful Retirees• Traveling in Retirement: Betty Robinson went without when she was working so she could retire on her very own yacht! Cynthia and Brad Bowman sold their business and retired to Spain with school-age daughters and the family dog• Retiring After Financial Missteps: Steve Schullo and Dan Robertson lost more than a million dollars right before retirement, but now have a lavish SoCal lifestyle and a Tesla Spendthrift Carolyn Bushong and saver Alan Errickson retired while she still carried $20,000 in debt, but they now share two homes Barry Maher overcame going broke in his thirties to become a self-made millionaire Judy Peters regained financial control after an expensive divorce by working with a financial advisor • Retiring with Friends:

Barbara Fletcher, Nancy Fassett, and Margaret Sugg are real-life Golden Girls! They lived and invested together before and during retirement

• Affording Early Retirement Rick Cross reveals his secret of how this ordinary worker retired comfortably at 50 Harry Coleman explains his “bucket” system that allowed him to retire at 51 and live the life he chooses Linda and Mark Majors plan to live a life of adventure abroad despite their relatively modest savings. Will they make their dream a reality?

• Conclusions

• Thanks To Those Who Helped Us Tell America’s Retirement Stories

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The content of The Retiree Next Door is provided for general information purposes only and does

not constitute investment or professional advice. You could lose money investing. Prior to making

any investment, a prospective investor should consult with his or her own investment, accounting,

legal and/or tax advisors to evaluate independently the risks, consequences and suitability of that

investment. Some names have been changed to protect privacy.


Introduction

Have you ever spent a sleepless night

worrying about funding your retirement?

You are not alone. Nearly 74% of

Americans are anxious about having

enough money to retire, according to a

survey of 2,286 adults by The Harris Poll®

in 2014.

You might believe that reaching a

comfortable and secure retirement – let

alone your dream retirement – requires

perfect money management. If you forgot

to save, went through an expensive

divorce, lost your job, became seriously

ill, made a major financial misstep, or

just started too late, well then, retiring

comfortably is simply out of your reach.

But that is simply not true. You might

as well conclude that retirement is

impossible for mere mortals.

In reality, there is no single, perfect path

to a fulfilling and secure retirement.

Even those individuals who face serious

financial challenges can find a way to

their happy second act.

To celebrate the many retirement paths

and lifestyles available to Americans,

we partnered with a talented group of

Certified Financial Planners®, wealth

managers and finance writers in the

MoneyTips community to interview a

diverse group of financially independent,

retired and semi-retired Americans,

including:

• Betty Robinson, whose frugal lifestyle

has allowed her to live on her yacht,

sailing the world.

• Cynthia and Brad Bowman, who sold

their furniture business and moved

their young daughters to Spain… along

with the family dog!

• Career educators Steve Schullo and

Dan Robertson, who lost over one

million dollars right before Dan’s

retirement, but managed to get it all

back.

• Real-life Golden Girls Barbara Fletcher,

Nancy Fassett, and Margaret Sugg,

who bought a house together in 1975,

and found a retirement community

where they could continue living

together.

• And you will also meet aspiring retirees

Mark and Linda Majors who, despite

not having a lot of savings, are

planning to retire abroad and live a life

of adventure.

Everyone profiled in this eBook has

taken a very different path to retirement,

and they are happy with the lifestyles

they have chosen. Their candid tales of

successes and missteps provide incredible

inspiration and insights to Americans

worried about retiring, as well as common

lessons that can help anyone to reach a

secure and enjoyable retirement. We hope

you enjoy their stories and find them as

inspiring as we do.

Marc Diana

Serial Entrepreneur & CEO

MoneyTips.com


Meet America’s

Successful Retirees


When Betty Robinson was working as

an information technology professional,

one of her brothers criticized her frugal

lifestyle. “He said, ‘You could do so much

more – you’ve got plenty of money!’”

That frugality allowed her to retire in her

mid 50’s and live fulltime on her 48-foot

Kadey-Krogen yacht, traveling between

the Chesapeake, the Florida Keys, and the

Bahamas.

Living the dream? Not quite. Missing

her life on land, she recently purchased

a summer cottage on Bald Head Island

in North Carolina, where she now plans

to spend her summers while still calling

the boat her home each winter. And

her brother? “I got to retire many years

before he did and I have a fabulous

lifestyle that he envies, and it’s a result

of purposely living in a more restricted

financial situation when I was younger.”

Live Below Your Means - Far Below ThemNot only does Betty have great discipline,

but she has always budgeted, starting

with her very first job out of college. Back

then, when she was earning $9,600 per

year, she used envelopes to keep herself

on track and make sure she didn’t spend

her rent money on entertainment.

“I lived within my means with the idea

that I wanted to retire much earlier than

my parents did, and I wanted to have a

fun time doing it,” Betty explains. She

certainly succeeded.

EARLY SACRIFICES LEAD TO EARLY RETIREMENT

LIVING THE DREAM ON LAND AND SEA By Emily Guy Birken, author of The Five Years Before You Retire

BETTYROBINSON Now in her 60s, Betty Robinson spends most of her retirement on her yacht

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Know Where Your Money GoesOne of the keys to living below your

means is understanding exactly how you

spend your money. Betty recommends

documenting each and every dollar that

you spend in order to live your lifestyle.

“For a lot of people, a dollar comes in and

a dollar goes out, and they have nothing

to show for it at the end of the year. So I

do believe that you need to understand

– and you need to document – how you

spend your money.”

Betty still walks the walk. Even in

retirement, she still tracks all of her

expenses, although today she uses an

Excel spreadsheet instead of envelopes.

Consult an Advisor

Budgeting and tracking expenses are an

excellent way to increase your savings

rate, but most workers need a hand

figuring out where to put those savings.

Betty recommends getting involved with

a retirement planner early.

“If you have the wherewithal to pay for

a retirement planner, you would want

to at least get some advice in your 30s

and 40s, particularly if you are planning

on retiring in your 50s, like I did. Our

lifespans are longer, so the sooner you

start to understand what your finances

need to look like to sustain yourself for

forty years of retirement, the better.”

When Betty retired just under a decade

ago, she sat down with a financial advisor

to help her map out her financial future.

She wanted a plan that would take care

of her nautical lifestyle well into her 90s,

including the care and upkeep of her

yacht. Even though Betty is no longer

earning an income, she still meets with

her financial advisor once a year, and she

built potential investments – such as her

recent summer cottage purchase – into

her post-retirement financial plan.

“Part of the planning process,” she

explains, “is figuring out how I might

finance a house when I am no longer

earning an income. I planned when I was

making money, and I planned on how I

could make investments after I stopped

making money.”

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“From my vantage point, I see a lot of younger people living for the moment, and that’s fine, but those moments won’t exist later in life.”


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BETTY OFFERS THE FOLLOWING ADVICE FOR ACHIEVING YOUR DREAM RETIREMENT:

1. START AS EARLY AS POSSIBLE Betty was raised by savers, and she was always expected to put some

money aside. “As a teenager, I was always expected to save, and I

was expected to pay my own way as soon as I was financially able to

and got on my own,” she says. This put her in the right place to be a

diligent saver throughout her career.

2. TAKE ADVANTAGE

OF EVERY WORKPLACE SAVINGS OPPORTUNITY Any time one of Betty’s employers offered a tax-advantaged savings

program, she would immediately take them up on it. That means she

always got the maximum company matching of funds and used every

savings instrument available to her.

3. SOCK AWAY YOUR BONUSES It took a lot of discipline, but Betty made a habit of putting almost

every penny of her bonuses into her retirement savings accounts.

“My job paid funds beyond my normal salary. So doing my best to

get every bonus I could earn and putting it away in my retirement

accounts was another important way to save.”

Betty’s retirement is living proof of

the old saying, “Good things come to

those who wait.”

“From my vantage point, I see a

lot of younger people living for the

moment, and that’s fine, but those

moments won’t exist later in life,”

she says. “I did this all on my own. It

can be done with enough planning

and enough forethought.”


CHUCKING IT ALL TO RETIRE IN EUROPE - WITH KIDS!

PROOF THAT ANYONE CAN LIVE THEIR DREAMS By Kate Holmes, CFP®

Who hasn’t dreamed of retiring to an

exotic, foreign land? As a Certified

Financial Planner, I often encourage

people to discover what truly makes them

happy and then create a plan to pursue

it, rather than doing only what they think

they can afford or have time for. Mother-

of-two Cynthia Bowman and her husband

Brad did just that. One day, they realized

that the traditional path of marriage,

children, career, and saving towards

retirement was not working for them, so

they took drastic steps to create a whole

new life they love… and get to spend

more time with their kids, to boot! The “R” WordDuring their early days together,

retirement seemed to the Bowmans like

“that distant thing that you do in your

seventies”, a concept equating simply

to a way of ending your life. “We have

got to come up with a better word for

retirement - there is such a stigma to

it,” says Cynthia emphatically. Your

aim in life should be a state of financial

independence that you reach sooner

rather than later. I have made a few bold

changes in my life, and people often

comment that I managed it because

I’m unencumbered. But as a married

couple who started a successful furniture

store while raising two young girls, the

Bowmans are living proof that anyone

can veer off the traditional path and make

courageous life changes to achieve this

independence.

CYNTHIA & BRAD BOWMAN Cynthia and Brad packed up their dog Charli when they retired to Spain

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When Doing Everything Right Feels WrongThe couple had been running their Los

Angeles furniture business for fifteen

years, working every day and putting

in sixty or seventy hours each week,

struggling to find quality time with their

daughters. They were burnt out. Cynthia

asked herself, “If the business closed

tomorrow, what would I have to show for

all this effort over the years?”

The thought of leaving the business and

re-entering the workforce in his fifties

was scary to her husband, Brad, who had

been a professional skateboarder and

renowned hair and makeup artist. They

had to find a solution that did not involve

going from one high-pressured career to

another. It was the book How to Retire

Early and Live Well With Less Than A

Million Dollars by Gillette Edmunds that

finally opened Cynthia’s eyes five years

ago to an alternative way of living. “I used

to think, ‘I might not even live to seventy.

What happens at that point? Am I going

to have enough in retirement to live

comfortably?’” she says. The book

highlighted creative ways of retiring

without needing millions of dollars in an

IRA or 401(k).

The family had always enjoyed traveling,

but they had mostly stolen a few days

here and there added on to business

trips to interesting destinations. Cynthia’s

dream was to retire and travel properly.

Over the course of a year, the Bowmans

developed this idea, planned, and

finally pulled the trigger. They sold their

business, rented out their house, pulled

the kids out of school, packed up Charli,

the family dog, and moved to Spain!

As you can imagine, moving to another

continent was no easy task. They had to

focus on the positive to convince their

young children that the move away from

friends, schools, and the only world they

ever knew was good. “We told them we

were finally going to stop working and

be Mom and Dad for them fulltime,” says

Cynthia. “And we were going to do it in a

really cool place. What kid is not going to

be excited about that?”

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“We have got to come up with a better word for retirement – there is such a stigma to it.”


The Big Problem with AdviceWhen the Bowmans shared their early

retirement plans with their friends and

family, they faced opposition from all

sides. “No one understood what the heck

we were talking about,” says Cynthia.

“They meant well, but they would bring

up so many concerns: What if you go

broke? What if you have a terrible tenant

and your house gets destroyed? Are the

kids going to get bullied in school?” This

pushback made the Bowmans doubt their

bold plans, but today, they are glad that

they ignored the naysaying.

Even their financial advisor was anxious

about how long the Bowmans could

afford to chase this dream. “He is very

conservative, but we appreciate that

most of the time,” Cynthia acknowledges.

Although they did not follow his advice to

stay the traditional course, the Bowmans’

longterm financial advisor still manages

their life insurance and their daughters’

college funds.

The Dream Life in RealityThe Bowmans moved to Spain with a nest

egg in the low- to mid-six figures. About

half of their roughly $3,500-a-month

living expenses are funded by rental

income from their U.S. properties. They

draw about 10% each year from the

savings from the sale of their business

and inventory. If they continue at this

rate, these savings should last for ten

years. They have also been lucky: as the

Euro has weakened, the dollar exchange

rate is now close to 1:1 or 1.1:1, making this

the ideal time to live in Europe.

Although Cynthia would prefer to hold

onto their property assets for as long as

possible, her husband enjoys investing

and would at some point like to sell the

property off and put the money into

stocks. He has been doing well in the

market and the dividends the Bowmans

collect from his stocks are another source

of income. “I keep saying that we should

leave it and see how long we can let it

grow,” Cynthia shares. “We’ve been so

lucky because we haven’t had to touch

our assets or principal.”

Cynthia feels a great responsibility for

teaching her daughters, now eight and

fourteen, to take money seriously so

that one day they can do whatever they

want and do it well. “Where we live, it

is a beautiful thing because they are

picking up so much independence,” says

Cynthia, who blogs about her new life at

JoyJournist.com. “It’s a safe area here.

They take public transportation and buses

to school and sometimes they run out

of bus fare because they forgot to tell

me. They then have to walk half an hour

home. I would have never done that to

them in the U.S. but here it is fine. They

are going to be resilient and learn what

money is about.”

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CYNTHIA’S ADVICE FOR ACHIEVING YOUR DREAM LIFE

1. SAVE YOUR MONEY, GROW IT, AND INVEST IT IN

INCOME-PRODUCING ASSETS THAT APPRECIATE IN VALUE (like real estate or a business), rather than saving X% to reach some

magic number decades from now. The Bowmans had built up a nest

egg mostly comprising the property they owned. They now rent out

their house, which was half paid off, a condominium and a commercial

warehouse they had used for stock, which had been fully paid for.

“I’m happy to say that property is a big reason we are able to do this,”

Cynthia confides.

2. MAKE SURE YOUR EXPENSES REMAIN LESS THAN

YOUR INCOME Independence is not about how much you make or how much you

have. Someone with passive income of $3,000 per month and monthly

expenses of $2,500 has achieved financial independence that is not

reliant upon a paycheck. Compare this with someone earning $9,000

each month, but taking on credit to spend five figures.

3. FOCUS ON WHAT YOU NEED People are often happy with less, just as the Bowmans are today. They

arrived in Spain with one suitcase each to start their new life. “I regret

that it took a move for us to simplify our life,” Bowman reveals. “We

lived with so much stuff – three cars, a boat – things we never even

used. The stress of managing a cluttered house was not worth it.”

4. WRITE DOWN A SCRIPT OF THE LIFE YOU WOULD LIKE TO

LEAD AND DO NOT WORRY ABOUT WHAT THE ANSWER IS Play with your imagination and explore the details of what it would

look like - what you would do, where you would go and what your

worldview would be.

5. AVOID DEBT AT ALL COSTS AND PAY IT DOWN QUICKLY Doing what you wish when you wish requires that you don’t carry

debt within your life.

6. TAKE CALCULATED RISKS

Ask many questions and seek advice.

“I want people to understand that I don’t believe you can get rich working your

whole life, “ Cynthia emphasizes. Follow your own path to find the personal

wealth that will truly make you happy, just as the Bowmans are doing.

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HOW TO RETIRE SUCCESSFULLY AFTER MAJOR INVESTMENT MISTAKES By Emily Guy Birken

Retirees Steve Schullo, 67, and Dan

Robertson, 73, pulled off a neat hat

trick. Despite losing more than half a

million dollars nearly overnight in March

of 2000, a mere three months before

Dan’s retirement, they are both now

happily retired with a $1.5 million nest

egg, a gorgeous home in Rancho Mirage,

California, and a 2014 Tesla in the garage.

According to conventional retirement

wisdom, Schullo and Robertson should

not be enjoying their comfortable (and

in some ways lavish) retirement. Not

only did they face a huge loss, these

two career educators made many other

missteps in their planning:

• Neither started saving until they had

reached their late thirties.

• Based on bad advice from agents and

advisors, their first investments were

in annuities that were inappropriate

for their needs.

• When they did take control of their

investments and began buying mutual

funds, they overinvested in tech

during the dotcom bubble of the

nineties. That is why they saw their

nest egg drop from over $1.5 million

to $460,000 in a matter of months.

Schullo and Robertson live primarily

off their pension and Social Security

benefits that come to about $75,000

per year and plan to maintain the

principal of their nest egg indefinitely.

STEVE SCHULLO & DAN ROBERTSON Career educators who retired in 2000 with a $1.5 million nest egg

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“We thought we were diversified,” Robertson says. “We had hundreds of tech stocks. Itdidn’t occur to us that an entire sector could be experiencing a bubble.”


Their success story highlights that the

path to retirement does not have to be

perfect, as long as you make intelligent

decisions along the way. Here is what you

can learn from them:

Educate YourselfSchullo’s first experience with investing

for his retirement was through an

insurance agent selling annuity products

at the school where he taught. Even

though it was unclear how the agent

was compensated – which made Schullo

somewhat wary – he went ahead and

purchased an annuity from her.

But that turned out to be a mistake. The

rates promised by the insurance company

in the promotional literature did not

match the actual rates he saw. Buried

in the fine print was the caveat that the

insurance company could reset the rates

as it saw fit. When he discovered the

bait-and-switch tactics, Schullo realized

that it was foolhardy to trust others with

his retirement decisions. He needed to

understand exactly how the investment

process worked.

“You have to be involved in your own

investing,” he says. “And you do not have

to be a professional or earn an MBA to

be an educated consumer.” Upon coming

to this realization, Schullo and Robertson

decided to learn as much as they could

about their options to figure out what

would help them grow their money.

Beware of FeesSchullo and Robertson started following

the work of John C. “Jack” Bogle, founder

and retired CEO of The Vanguard Group.

Bogle focuses on common-sense

investment strategies, with a particular

emphasis on the impact of fees. Just as

your investment returns compound over

time, so do your fees compound over

time. For instance, a 2% annual fee on a

mutual fund will eat away nearly

two-thirds of your investment over a

fifty-year time frame. For this reason,

Schullo and Robertson adopted a strategy

of investing in low-cost index funds

so they could keep their compounded

interest, rather than lose it to fees. While

it is nearly impossible to avoid any annual

fees, they are not the only charges you

need to watch out for. To avoid losing

more of your hard-earned money to

additional fees, Schullo tells everybody

one simple what-not-to-do rule: “Never

pay a commission when investing.”

Don’t Lose Your HeadPossibly the most overwhelming moment

in Schullo and Robertson’s path to

retirement was the day they lost more

than half of their portfolio when the

dotcom bubble burst. “We thought we

were diversified,” Robertson says. “We

had hundreds of tech stocks. It didn’t

occur to us that an entire sector could be

experiencing a bubble.” Though they were

frozen and stunned by their loss, they

kept their money in the market — which

is exactly the right course of action for

shell-shocked investors after a market

correction. Otherwise, investors who cash

out post-correction make their losses

permanent.

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Two things helped Schullo and Robertson

recover from this mistake. First, they

stayed levelheaded at every point in

the bubble. “Our overnight loss was on

paper,” Robertson explains. “We had not

changed our lifestyle in any way because

of how well our investments were doing,

so we didn’t lose anything tangible when

the market took a dive.”

In addition, the crash spurred them to

adjust their investment strategy. After

2000, they began to invest in the whole

market, because the whole market will

rise over time. This strategy allowed

Schullo to retire in 2008, during the next

big market correction.

THERE IS ALWAYS HOPE SCHULLO AND ROBERTSON OFFER THE FOLLOWING ADVICE FOR ANY WORKER HOPING TO RETIRE AFTER A MISSTEP OR TWO:

1. LIVE FRUGALLY AND AVOID DEBT Both men grew up in small homes and were used to making do.

That meant they saw no need to go into debt just to be able to buy

impulsively and keep up with the Joneses. Frugal living was what

allowed them to weather the bursting of the tech bubble.

2. YOU CAN INSULATE YOURSELF

FROM THE EFFECTS OF INFLATION Schullo and Robertson are committed to energy conservation — hence

the Tesla and solar panels on their house to power both. However,

their conservation is not just about helping the environment. It is

also a way to protect themselves from the inflation of energy prices.

You don’t have to put up solar panels or buy an electric car to do

this. Simply being more mindful in your spending can help you avoid

inflation’s bite.

3. YOU DON’T NECESSARILY NEED A FINANCIAL MANAGER “There is nothing mysterious about investing,” Schullo says. “Anyone

can educate him or herself. But CNBC and its ilk all try to make

finances opaque.” Schullo recommends finding a fiduciary planner

through the National Association of Personal Financial Advisors if you

really want help handling your own investments. “But you do have

to be somewhat involved,” he cautions. “Go for low-cost, diverse,

indexed mutual funds.”

Schullo and Robertson are thoroughly enjoying their retirement, despite the

ups and downs it took them to get there. Their experience has helped them to

understand that a successful retirement is within reach for anyone.

“There is hope,” Schullo says. “But you have to learn a little bit about investing.”

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HOW A SPENDER AND A SAVER FOUND RETIREMENT BLISS

By Richard Eisenberg, Senior Web Editor, PBS Next Avenue

Carolyn Bushong, 67, and Alan Errickson,

68, don’t do things the conventional

way, including — maybe especially —

retirement. Bushong, a psychotherapist/

marriage counselor/author, and former

financial advisor Errickson have been

a committed but unmarried pair for 27

years. They didn’t follow the traditional

pattern of quitting work simultaneously

and then relocating or aging in place. In

fact, they didn’t agree on what retirement

means, or even where they should

spend it!

Errickson, a Vietnam vet with a grown

daughter in Colorado, retired full-stop

from his Wells Fargo job in Denver

in 2012. “I just kind of coincided my

retirement with the Social Security date

and said, ‘That’s when it’s going to end,’”

he says.

Bushong, by contrast, is semi-retired,

dealing with clients part-time. “I never,

ever wanted to retire,” she says. “I love

what I do.” Since 2012, they have led

the snowbirds’ life, dividing their time

between Bushong’s Morrison, Colorado,

split-level mountain home near Denver

and the Tucson, Arizona, 1½-acre home

that Errickson bought for them. (Errickson

sold his Denver townhome once he

retired.) They now spend seven months a

year in Tucson and five in Colorado. While

in Arizona, Bushong consults with clients

by phone. The first winter in Tucson was

stressful for Bushong, she says, because

she barely knew anyone there.

ALAN ERRICKSON & CAROLYN BUSHONG Snowbirds reconciled opposing money habits

Two different retirement plans

Two opposing money habits

+ + Two towns

1 HAPPY RETIREMENT=

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“I felt very lonely,” she recalls. Over

time, she has grown much happier. They

say opposites attract, and the two have

diametrically opposed money habits.

“I guess my motto has been ‘Live for

Today’ and his has been a lot of ‘Live for

Tomorrow,’” says Bushong.

After “a pretty expensive divorce” at

age 40, Errickson realized he needed a

financial rebound, so he diligently stashed

money away to amass a retirement nest

egg. “I just practiced what I preached

between 401(k)s and a variety of other

things,” he says. “And I also had the good

fortune that a couple of firms I worked

for got bought out as I approached

retirement, so that helped a bit, too.” He

also got maniacally serious about debt.

“My mission the last five years was

to make sure there was no debt on

the homes or cars or credit cards or

anything,” Errickson says. “I was on a

debt-reduction plan for the five years

prior to retirement.” He has already paid

off the Tucson place.

Bushong jokingly describes her carefree

high-spend, high-debt attitude as: “I can

pay for it if I have a credit card to pay

for it.” Also divorced, she notes, “I had

something like $20,000 in debt before

Alan retired. So he said to me, ‘If you will

close your [Denver] business and move to

Tucson with me, I will pay all the bills and

take care of us. But I need you to get rid

of this debt before we go.’”

She did, although it wasn’t easy.

“I went to a bankruptcy attorney who

helped me figure out how to negotiate

with the credit card companies,” Bushong

says. “We threatened bankruptcy so they

would negotiate,” she recalls.

As you might suspect, the couple’s polar

pecuniary perspectives has led to some

iciness in their relationship. “Yeah, we had

fights,” says Bushong. “The day he said to

me ‘You need to pay yourself first,’ I said,

‘I do; I go to the mall.’ We’ve kept our

money completely separate until we did

the retirement thing.”

These days, however, they’re not only

making it work; they’re smashingly

successful retirees in good health. The

couple lives on about two-thirds of

their pre-retirement income, plus Social

Security and pensions. “When you retire,

a lot of your expenses go down,” says

Errickson. “I used to pay $3,000 a year in

parking.”

To fund their current lifestyle, he

estimates, “you probably need at least

$5,000 a month.” To do that, the former

financial advisor says, “If you’re going

to put it in T-bills, you probably need $5

million. But if you take a little risk and can

get four or five percent off of it, then $1 to

$2 million would do it.”

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“I regret not doing a forced savings plan and I’m lucky I’m with someone who did.”


1. PAY YOURSELF FIRST While the maxim is trite, Errickson concedes, it works. “Be sure that

you fund your 401(k) and all that. That way, the money’s taken out of

your hands before you get it in your paycheck, so it’s kind of a forced

savings account,” he notes. Adds Bushong, who has come around to

Errickson’s view, “I regret not doing a forced savings plan and I’m

lucky I’m with someone who did.”

2. TRY TO GET DEBT-FREE AND IF YOU HAVE A DEBT

PROBLEM, COME TO GRIPS WITH IT “I never would have retired if I still had mortgages,” says Errickson.

Since Bushong became semi-retired, she switched her credit card

usage to a card with a strict $500 limit. She stopped overspending,

too. “Now that I’m semi-retired and sitting in my shorts next to the

phone, I don’t need all those things,” she says.

3. WHEN RETIRING TO A NEW AREA, IF YOU FEAR GETTING

LONELY, FORCE YOURSELF TO MEET PEOPLE AND TO

BECOME ACTIVE “I wrote out a list of ten things I needed to do to get more involved in

the community,” says Bushong. Joining women’s meetup groups paid

off the most. “I found Ladies who Lunch and Love Happy Hours and

have been a member for a couple of years. Then I joined Glitzy Girls

and Girls Over 50 Who Want to Have Fun,” says Bushong.

4. EMBRACE YOUR DIFFERENT VIEWS OF RETIREMENT “His is: ‘I just want to sit here on this beautiful property we have

and enjoy myself. I worked my ass off and I just want to relax’,” says

Bushong. “Mine is: ‘I want to do things.’ But he’s not bothered at all

with me running out and doing tons of things, so I just do.”

Adds Errickson, “I planned for this for so long and it finally happened. I

still wake up every day and feel like I need to kiss the ground.”

ERRICKSON AND BUSHONG HAVE TIPS FOR COUPLES PREPARING FOR RETIREMENT

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BARRY MAHER Former salesperson, manager, executive, consultant and author travels the world as amotivational speaker

FROM FLAT BROKE AT 37 TO A SELF-MADE MILLIONAIRE

IT’S NOT FAILURE, IT’S EDUCATION By Jeff Rose, CFP®

I recently had the honor of interviewing a

motivational business speaker and author

who has appeared on the Today Show,

CNBC and NBC Nightly News. Through

saving and investing, a lot of hard work

and, in his words, more than a little luck,

Barry Maher went from being broke at

age 37 to being a self-made millionaire

and semi-retiree who can afford to retire

completely.

What Does Semi-Retired Really Mean?Now 67, Maher only works when he wants,

how he wants and as often as he wants.

That sounds like a pretty sweet deal to

me. But who knew this would be in the

cards for the boy who started out selling

greeting cards door-to-door?

Maher was self-employed through college

and built a successful business selling

advertising products from scratch, but

sold it so he could pursue a career writing

fiction. Unfortunately, he financed the

sale, the new owners ran the business

into the ground and he lost any chance of

being paid in full. “I only got about thirty

to forty percent of the base price and

a small pittance of what was supposed

to be royalties. What was intended to

be an annuity turned into nothing with

breathtaking speed.” Making matters

worse, his novels were not selling well and

he found himself flat broke at the age of

37.

So how did Maher turn that situation

around to become so successful?M

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The Journey from Broke to Millionaire Maher credits his becoming a millionaire

in large part to making good money in the

corporate world and as a speaker. Armed

with his experience of building a business

from nothing, Maher got a job with GTE

as a salesman. “I busted my butt because

I was absolutely broke,” he confesses. “I

worked ridiculous hours from the time

I woke up to the time I collapsed into

bed.” Maher quickly became the Fortune

500 company’s top salesman, earning a

promotion and financial security.

With money to invest, Maher dabbled in

the stock market. He admits that he does

not have the time or the expertise to pick

individual stocks, but he has bought many

index funds that have done well over the

years.

Maher also credits his frugality for helping

him to save the money he has. As he

explained, “Whenever I buy something,

I think of how hard I had to work to

make the money for it.” For example, he

imagines his Honda Accord, not just as a

car, but as whatever he had to do to earn

the $25,000 it cost him. “That mindset

always makes my Honda seem more

attractive when I start to think about

buying a Mercedes, “ Maher quips.

One day, Maher’s literary agent suggested

that instead of writing more fiction,

he should try his hand at a business

book. Although dubious at first, Maher

wrote a specialty book on Yellow Pages

advertising and was soon asked to

speak at small business events on the

topic. Maher took this opportunity to

broaden his field of expertise and he

began consulting on various sales and

management issues.

The book that really helped to establish

Maher as a sought after motivational

speaker was Filling the Glass: The

Skeptic’s Guide to Positive Thinking in

Business, which was translated into a

number of languages and was cited by

Today’s Librarian as “one of the seven

essential popular business books”.

“Whenever I buy something, I think of how hard I had to work to make themoney for it.”


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Common Misconceptions about Millionaires Maher stressed that many millionaires

today live normal lifestyles free of

limousines and yachts. He drives an

economy car and lives in a regular house.

Because he doesn’t have a mortgage and

is frugal, he could afford to retire when

he was sixty. As he points out, a million

dollars does not have the same spending

power it once did. The writer estimates

that, excluding travel and business

expenses, it costs him significantly less

than $100,000 per year to maintain his

lifestyle.

It is easy to be intimidated by Maher’s

success and accomplishments, but

everyone has hiccups to overcome on the

road to success. Even though he might

have changed some of his past decisions,

Maher acknowledges that without his

experiences, he would not have

anything to pass on to others.

For example, Maher gave many free

presentations until he got himself

established as a speaker. His first gig as a

paid speaker was an excruciating six-hour

seminar on the Yellow Pages that he put

together himself. “I bored the paint off

the walls,” he recalls. “It was terrible! But

if I hadn’t done that wrong, I never would

have learned how to do it right.”

What Financial Freedom Really Looks Like Although he has been broke, Maher has

never been seriously in debt. “I don’t buy

it until I have the cash to pay for it,” he

says. For Maher, the biggest advantage

of avoiding debt was having the financial

freedom to try a new career if he didn’t

enjoy his job.

He built an emergency fund to know that

he would not starve if nobody hired him

for six months or a year. In the corporate

world, this financial independence earned

Maher a reputation for being brutally

honest, “because I knew I could walk

away from that job anytime I wanted.

That is the kind of freedom that kept me

working.”

“The best investment you’re ever going to

make is the investment in yourself,” says

Maher, “You can’t take charge of your life

if you’re paying money to other people.

Then the bank’s in charge of your life.

You’ve got to get out from under the

thumb of debt if you’re actually going to

succeed in the way that you would like

to.”

“You can’t take charge of your life if you’re paying money to other people. Then the bank’s in charge of your life.”


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ADVICE TO GIVE YOUR YOUNGER SELF I ASKED MAHER WHAT HE WOULD TELL YOUNG WORKERS ABOUT HOW TO SUCCEED:

1. DO YOUR HOMEWORK Maher’s worst investment was buying a franchise for a sales business.

“I thought I’d investigated it, but I really hadn’t, and it turned out to be

a loss. I basically had to write it off.”

2. RECOGNIZE THE REAL COST OF YOUR PURCHASES You might think of frugality as being a drag, but if you don’t

acknowledge that every dollar you spend costs you time at work, then

you will never get off the work-spend-work-spend treadmill.

3. BE OPEN TO TRYING SOMETHING NEW If you have too rigid an idea of what your career or your retirement

will look like, then you will miss amazing opportunities that present

themselves.


JUDY PETERS Entrepreneur, 67

TAKING THE RIGHT ADVICE

HOW A FINANCIAL ADVISOR TURNED A DIVORCEE’S LIFE AROUND By Katie Brewer, CFP®

After going through a divorce in her late

thirties, Judy Peters felt scared, alone

and financially out of control. ”I thought,

‘How am I going to do this? I’ve got

two kids and a huge house in a yuppie

neighborhood with an interest rate of

around 18 percent.’”

Fast-forward to the present day. Peters is

a 67-year-old millionaire. Along with her

recently retired second husband, Peters

can travel where she wants. How did she

manage such a turnaround?

Working with a Financial AdvisorBack in the eighties, Peters’ divorce

attorney referred her to a financial

advisor, Michael McNamara of McNamara

Financial Services in Marshfield,

Massachusetts. McNamara explained

financial concepts in a way that Peters

could understand, enabling her to handle

her finances confidently for the first time.

“He wasn’t using all these big words that

went in one ear and out the other,” says

Peters. “That was very reassuring to me.”

Once Peters got a handle on basic money

management, she started talking about

long-term goals with her financial advisor.

“When I first went to him, I was 38 years

old and in the office supply business,” she

recalls. “We sat down and looked at the

numbers. He said to me: ‘Well, if you ever

want to retire, you’re going to have to sell

a lot more pens and pencils than you’re

selling now.’” That was a big wake-up

call! With McNamara’s guidance, Peters

learned how to set financial goals and live

on a budget. He holds her accountable to

those goals and they have been working

as a team ever since.

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The advisor told Peters to keep her

finances simple, make more money and

spend a lot less than she was earning.

Peters was in a sales role on variable

compensation. Every month, she just

put her income into the same account

from which she paid her bills. Her advisor

recommended that she have a separate

account for her commissions and write

a check for her monthly bills (usually

around $3,500), allowing the rest of

her income to sit and earn interest. This

enabled Peters to control exactly how

much she was spending. “It was very

helpful, because the remaining balance

was totally separate,” she says. “I didn’t

see it on a daily basis, so I didn’t spend it.”

When friends tell Peters that they are

doing their own financial planning, she

shakes her head and thinks, “Wow,

why would you try to do this on your

own?” Choosing the right advisor is

crucial, however, as Peters adds, “Trust

is everything when working with an

advisor. You need to make sure that they

understand you and that you understand

them!”

You’re Never Too Old Or Too Young to BudgetAfter being laid off from her job in the

office supply business, Peters decided

to leave the corporate world and start

her own business in 1993. With a laugh,

Peters remembers thinking, “You know

what, I’m not going to work for anybody

else anymore. Forget it.” Peters and

her second husband ran their business

together for years, selling promotional

products from their home.

Peters learned that budgeting could

help you both before retirement and in

retirement. To this day, she still uses a

budget spreadsheet to keep track of her

expenses. She pays for everything with

a credit card, and then imports all of her

expenses into the spreadsheet and pays

off the balance in full at the end of every

month. Her business expenses are kept

completely separate from her personal

spending.

Including the mortgage on their home

(currently at 2%), Peters and her husband

have approximately $65,000 a year in

expenses. The mortgage is their only

debt. Their living costs were almost

halved when they decided to move from

their house in Boston to a log cabin they

had built in Maine. “It’s been an adventure,

that’s for sure,” Peters admits.

Her personal goal was to save $1 million

and she was excited to achieve that

milestone almost four years ago. “I called

my son and said, ‘You’re not going to

believe it!’” Peters laughs, “And he went,

‘Ooh, I’ll take a check!’”

“How am I going to do this? I’ve got two kids and a huge house in a yuppie neighborhood with an interest rate of around 18 percent.”

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Her and her husband’s current net worth

is nearly $3 million, comprising a mixture

of investments in retirement accounts,

a SEP account, trust accounts and more

liquid accounts. She describes her family

as frugal and admits that she never goes

shopping unless she has to.

Enjoying the Quiet Life NowFor Peters, retirement is about time and

quality of life. Semi-retired, she continues

to work because she enjoys what she

does. As an entrepreneur, she is not stuck

in an office; she can work from anywhere,

as long as she has online access. If you

continue to work in retirement, make sure

it is because you enjoy it and not because

you failed to plan.

Although she enjoys having her own

business, Peters is not currently taking on

any new clients. “I’m just winding down

and taking care of the clients that I’ve

been hand-holding for the last twenty

years,” Peters says. This allows her to

spend part of the week making money

and the rest of the time relaxing or

traveling with her husband.

It also allows her to see her kids and six

grandkids, who live a five-hour drive

away. “We had two of our grandkids

up here for four days over their school

vacation,” Peters says. “We took them

snowshoeing and sledding, and they had

a ball. They think it’s like camp.”

So many people think retirement is just

about the numbers, but Peters chalks up

her happy retirement to her lifestyle. She

paints an idyllic picture: “It’s pretty rural

here, which is nice. My husband putters

around the yard. We’re out in the woods,

so he’s chopping something and he loves

his snowblower. He’s making all these

little paths through the woods so the deer

can come. We have motion cameras out

there so we can see all the critters that

are out there at night.”

Peters says her retirement lifestyle with

her husband is pretty much what they

expected, thanks to the help from her

financial advisor. They are living proof

that retirement can be whatever you want

it to be as long as you plan for it and seek

the advice of a professional when needed.

Peters’ accountant told her that the best

way to get back at her ex-husband is to

become extremely successful, so she did!

When friends tell Peters that they are doing their own financial planning, she shakes her head and thinks, “Wow, why would you try to do this on your own?”

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THREE SINGLE WOMEN POOL THEIR RESOURCES TO LIVE AND RETIRE TOGETHERBy Emily Guy Birken

Like TV’s Golden Girls, Nancy Fassett,

83, Barbara Fletcher, 74, and Margaret

Sugg, 85, are three retired friends who

live together. Unlike the sitcom, however,

these three women have shared a

successful and fulfilling life together for

over forty years thanks to their decision

to buy a house together back in 1975.

“There was a time in our lives when

friends were buying houses individually.

We realized that if we pooled our money,

we could buy a much nicer, bigger house

for the same amount of money that we

might invest in a house by ourselves,”

Margaret explains.

Forty years later, the three friends were

still sharing the house they purchased

in 1975, and they decided to move

together to the Asbury Methodist Village

retirement community to continue their

living arrangement.

Sharing a home in retirement is certainly

unusual. Only 2% of retirees live with non-

family members, according to exclusive

research by MoneyTips. But the wonderful

experience that Nancy, Barbara, and

Margaret have shared makes it clear that

living with good friends can be a fulfilling

way to improve your retirement lifestyle.

NANCY FASSETT, BARBARA FLETCHER, AND MARGARET SUGG Real-Life Golden Girls

“If two people want to do it and one doesn’t, the two people prevail. If it’s a major decision, all three of us have to agree to it.”

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http://www.moneytips.com/retiree-next-door-ebook



Here are some of the important lessons to

learn from the experiences of these self-

proclaimed Golden Girls:

Teaming Up for Major Life DecisionsAfter buying a home together, Nancy,

Barbara, and Margaret decided they

should join forces on investments, too.

Barbara explains, “We thought that

maybe real estate was a good investment

and we bought a rental property in

Georgetown in Washington, D.C.”

The women eventually owned several

houses and apartment buildings. “We did

quite well with our investments,” Nancy

says. “We didn’t get rich, but we were

able to maintain positive cash flow.” None

of that would have been possible if they

had not pooled their resources.

In addition, they help each other make

big life decisions. “We have a two-out-

of-three rule on things that are not major

decisions,” Barbara says. “If two people

want to do it and one doesn’t, the two

people prevail. If it’s a major decision, all

three of us have to agree to it.”

With this system in place, the three

women always feel like they are a team

and they have each other’s backs.

Nancy claims that their unusual living

arrangement has actually made it easier

to make big decisions — because all

three women are comfortable with each

other and respect each other. “You have

to be agreeable,” she adds, “but this has

worked out really well for us.”

The Importance of Boundaries in FriendshipNancy, Barbara, and Margaret have

always understood that they needed to

put clear boundaries in place in order

to maintain their friendship. When the

women first started living together, they

asked Nancy’s father, an attorney, to

draw up an agreement to cover what

would happen if anyone decided to leave

their shared home. “We never used it,”

Margaret says, “but it was important to

put it all in writing, just in case.”

Having such a contract did not detract

in any way from the three women’s

friendship, but it was good protection

for them in case their circumstances

changed.

In addition, the friends have an excellent

system for fairly splitting bills. “We have

a household account and credit card.

Each month, we contribute the amount

of money needed to pay the bills that

month,” Barbara explains. “We also have

a savings account for household expenses

that might pop up unexpectedly.”

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“We realized that if we pooled our money, we could buy a much nicer, bigger house for the same amount of money that we might invest in a house by ourselves.”


By keeping the household accounts

separate from personal accounts, the

three friends have ensured that bills are

split reasonably between the three of

them. In addition, putting money aside

specifically for household surprises is

an excellent way to make sure that no

unexpected problem eats into their

regular budget.

Such boundaries provide personal

security that enables the friends to keep

any financial issues from encroaching on

their friendship. “Everybody has their own

investments,” Barbara says. “It seems like

a good balance.”

Leveraging CreditDespite living in the same home for

nearly forty years, Nancy, Barbara, and

Margaret never paid off the mortgage.

“We kept refinancing to improve the

house,” Barbara says. “We never had a

huge mortgage and had a lot of equity

in the house. We refinanced as the

rates changed or for extra money for

upgrades.”

This strategy is counter to what many

personal finance experts advise — that is,

to minimize debt and pay off a mortgage

as quickly as possible. But the three

friends managed to make it work, not only

for their primary residence, but also for

their investment properties.

“We had mortgages on all of our

properties,” Margaret says. This worked

for them because they actively manage

their finances and stay on top of all

of their bills. Carrying the mortgages

allowed them to tap that positive cash

flow — which might have been impossible

if they had been forced to save up to

purchase their investment properties in

cash.

Leveraging credit in such a way can be a

savvy move, but it requires great financial

diligence to work as well as it has for

these three friends.

I asked Nancy, Barbara, and Margaret for

advice they would give to retirees living

with spouses, friends, siblings, or adult

children:

Keep the Lines of Communication OpenManaging their combined investments

together necessitated that each of the

women talk frankly about their goals

and how to finance their ideal retirement

situation. The three friends did not know

for sure what they wanted to do after

they retired, but they did not shy away

from talking about their options. “We

talked about what we would do in the

future,” Barbara says. “We’d seen several

retirement communities, but none of them

had a location that was big enough for

the three of us, until we found our home

at Asbury Methodist Village.”

Since the three women were always

open with each other about their

preferences and concerns, they were able

to decide quickly when they found the

retirement community that fit all of their

requirements. After forty years and two

homes together, their system must be

working! Me

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HOW A REGULAR WORKER RETIRED AT 50 WITH MILLION$

THE EARLY BIRD GETS MORE THAN WORMS By Alaina Tweddale, Business Writer

The twenty-something crowd might not

find it easy to wake up to the nuances

of personal finance investing, but early

bird investors benefit powerfully from

the magic of compound interest. When

coupled with regular contributions over

time, compounding carries incredible

potential for wealth generation.

Just ask Rick Cross of Winston Salem,

NC, a retired employee-turned-executive

in a large consumer goods corporation.

Cross spent his career slowly working

his way up the corporate ladder while

steadily adding to his retirement nest

egg. He started his career as a front-line

sales employee and, through methodical

resolve, was able to retire with several

million in investable assets and a

$100,000 annual spending plan after

taxes. Did we mention that he retired at

fifty? This early bird scored a lot more

than just worms!

Cross’s story of early preparation and

continual follow-through provides a

plan for those just starting out on their

retirement journey. Here is the course

he followed to reach the successful

retirement he enjoys today.

RICK CROSS Maxed out his 401(k) since his early 20s and retired at 50 with millions. Rick, 55, pictured with wife Sue.

“If you get in the habit of saving, then you’re not really feeling the impact of taking those dollars out of your pocket.”

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Start Saving Early As soon as he could, Cross started

investing six percent of his salary in his

company retirement plan, which allowed

him to maximize his employer’s match.

At the time, the six percent represented

a sizable chunk of his income. The six

percent sacrifice was a small price to pay

to reach his goal of early retirement.

Over time, Cross slowly increased his

contribution percentage to a staggering

twenty percent. “About every one and

a half to two years, we’d reevaluate and

determine if it was the right time to

increase the percentage,” he says. He also

regularly earmarked a portion of annual

employee bonuses for his kids’ college

accounts (yes, you can retire despite

paying college tuitions!) and his after-tax

long-term accounts.

Despite several hefty salary boosts over

time, Cross says, “I don’t want to dismiss

the increases in salary as a contributor,

but every $10 I put in at age 23 had a

greater compounding effect than every

$100 I put in at age 40.” According to

Cross, starting early and having the right

mindset were really the most important

keys to creating a dream retirement.

Live Beneath Your MeansIf you start saving early, you will get used

to not having a certain percentage of

your income available to spend. Instead

of upgrading cars every few years and

buying a more lavish home, Cross and his

family worked diligently to pay off their

home, cars, and consumer debts over

time. Now, Cross owes no money.

“It’s as much about a mindset as it is

about anything else,” says Cross. “If you

get in the habit of saving, then you’re not

really feeling the impact of taking those

dollars out of your pocket.”

In short, Cross chose to focus on the

larger retirement picture, and not on the

short-term trade-offs. “It’s not how much

you make, it’s what you do with it,” says

Cross. “Because, quite frankly, I know

people who make a lot more money than I

ever did, and don’t have a lot to show for

it.”

Build Your Own Vision of RetirementToday’s retirement is different than it was

for earlier generations. “When our parents

retired,” he says, “they stopped work and

traveled or just kind of relaxed. I have

way too much mental and physical energy

to stop working.” Instead, Cross drew on

his already-existing career skills to build a

part-time consulting career.

“I wanted to move away from the six- or

seven-day work week that I experienced

in the corporate environment,” he says.

“Now my business partner and I try to

work no more than three days a week.”

While the partnership does generate

income, Cross is clear that money is not

the motivation behind the part-time work

he does today. “It was a big adjustment

for me to throttle back from 95 miles

per hour to 65,” he adds. “For so long

I was moving so fast and was involved

in so many things. Now I’m much more

comfortable with enjoying the moment.”

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Despite his retirement success story,

Cross is quick to point out that he is just

a regular guy who worked hard, lived

beneath his means, and saved as much

as he could. “There is no magic behind

what we did over time,” he says. “I took

on additional responsibility and moved up

the organization and was compensated

for that. But, we were able to do

everything we did as a result of taking a

systematic approach.”

HERE IS WHAT YOUNGER INVESTORS TODAY CAN TAKE AWAY FROM THIS EARLY BIRD:

1. THE SOONER YOU START, THE GREATER YOUR

COMPOUNDING ADVANTAGE IS Over time, the earnings you make on an investment earn their own

interest. This means the advantage of time itself can be the biggest

single asset any young retirement investor has at his or her disposal.

For example, assume an 8% annual return. Investing $3,000 per year

over a decade starting at age 25 in a tax-deferred retirement account

will grow to $472,000 by age 65. And that’s without adding another

nickel past age 35. If you wait to start saving until age 35 and then

save the same $3,000 per year but keep socking the funds away for

the remaining thirty years until age 65, your account will only grow to

$367,000. In short, save $30,000 over ten early years and end up with

$472,000 or save $90,000 over thirty later years and end up with

$367,000. That’s why an early start can be such a huge advantage.

2. THE LESS YOU SPEND, THE MORE YOU CAN SAVE It is easy to spend as much as you make (or even more!), if you don’t

keep careful watch of where your money goes. For this reason, many

professionals recommend you artificially deflate your take-home

income by paying yourself first. In other words, if you automatically

send a portion of your take-home pay to a separate account or

accounts (your 401(k) or savings account, for example), you won’t be

as inclined to spend it and your savings will grow at a faster rate over

time.

3. YOU GET TO CHOOSE HOW YOUR RETIREMENT WILL LOOK You have the power to control how you want your retirement to look.

Some want to spend their retirement years traveling or working part-

time or even starting a dream business. Knowing what you want can

give you the power to start planning to meet that goal now - while

you still have the benefit of time on your side.

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KICKING THE RETIREMENT BUCKET!

REAP REWARDS BY RETHINKING RETIREMENT By Roger Whitney, CFP®

Traditional retirement planning does not

work for most of us. It focuses too much

on things we cannot control, like the

investment markets and the economy.

It presents us with two crappy options:

settle for less now so that we can save

more, or plan to settle for less later.

Harry Coleman examined these options

and picked, “None of the Above!”

Coleman enjoyed his successful career

at a large consumer company and loved

his co-workers. But he wanted more out

of life, which he determined was divided

into three buckets: work, giving back and

goofing off. Although he loved his work,

it was too large of a bucket in his life. He

was ready for a better balance between

the three. So, at age 51, Coleman decided

to leave his successful corporate career

and “retire.”

Retirement, Semi-Retirement or Something Completely New?Coleman is a great illustration of the

growing trend of baby boomers who

are rejecting the traditional view of

retirement and charting their own course.

This new class of “retirees” is rewriting

the rules of retirement by leaving

traditional careers earlier and living a

more balanced life divided between part-

time work, serving others and enjoying

their family.

HARRY COLEMAN 57, retired from a corporate career at 51; rejects the “traditional” retirement lifestyle

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“I didn’t want to screw it up. It was worth the cost to hire an expert to help guide me.”


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How He Got There Coleman credits four things with

positioning his family to “retire” so early.

Valuing Experiences, Not Things He and his wife lived comfortably, but

modestly, over their thirty-year work life.

They never had the newest things, but

never really missed them either. Even

now, Coleman drives a 2003 minivan. This

mindset helped them focus on people

and community rather than shopping and

consumerism.

Whenever Coleman received a raise or

bonus, it went towards paying down

debt and savings. The result? A modest

lifestyle they enjoy and savings ample

enough to provide for it whether they

work or not. He won’t give a number,

but they have enough savings and

investments that they can live off about

3% of their assets per year.

Finding a Trusted Advisor Although Coleman was smart enough to

create his own plan, he was also smart

enough to get help. When I asked him

why, he said, “I didn’t want to screw it up.

It was worth the cost to hire an expert to

help guide me. It lowered the stress level

in my life and gave me assurance that I

was making good decisions.”

The plan they created did not depend

on Coleman working. This extra margin

of safety has given Coleman and his wife

more options and more discretionary

income.

Keeping Ample Cash Reserves

In 2007, Coleman and his wife started

their retirement journey heading into the

perfect financial storm. Their timing could

not have been worse. Just as the markets

were crashing, he quit his job and built a

new home — while still making payments

on his old home. He saw his portfolio lose

over 25% of its value. He says he was

able to weather this financial tsunami

because he and his financial planner had

built flexibility into his lifestyle — and

enough cash reserves to stay afloat. In

addition, he and his wife had always lived

comfortably but never extravagantly.

When the storm hit, they were able to

lower their spending until the markets

calmed down.

Retirement Doesn’t Mean You Stop Working Coleman works because he wants to.

Remember those buckets? When he

retired, he did not empty his work bucket;

he just stopped it from overflowing into

the rest of his life.

Coleman works with a number of firms

that hire contract labor for special

projects in his area of expertise, as well

as participates in general assignments

like study groups. He is able to pick and

choose his assignments as he wishes,

based on his schedule, interests and need

for cash. He credits his continued work

with more than financial security. He also

gets a great deal of mental and physical

engagement from his efforts. Although

he planned financially to have the option

of not working, he never thought he

would stop cold turkey. He always knew

exclusive leisure would not be fulfilling

enough.

Coleman, now 57, continues to enjoy

his flexible lifestyle. He works when he

wants to work. He and his wife volunteer,

regularly go on mission trips, and they

take one nice vacation a year. And his

buckets? “Currently they are allocated

about 25% work, 40% volunteering and

35% goofing off. At the end of the day,

it’s my life and I just shifted the balance a

bit.”


READYING FOR RETIREMENT OVERSEAS

A COUPLE PLANNING TO RETIRE SHOWS US THE WAY By Cathy Curtis, CFP®

Meet Mark and Linda Majors, a San

Francisco Bay Area couple planning

to stop working in the next five years.

Despite not having employer-backed

pensions, their goal is to retire and live

a life of adventure filled with traveling

through different countries, kayaking and

scuba diving. While this is a dream many

of us share, the couple are taking steps

to make it a reality. I recently spent some

time with Mark, aged 57, and Linda, 50,

to understand their retirement goals and

how they are working to achieve them.

Both of them have worked as

independent contractors for nonprofits

and social welfare organizations over

the past fifteen years, so they have been

responsible for their own retirement

savings. They have both contributed

to regular brokerage accounts and IRA

accounts at differing rates over the

past thirty years. Occasionally, Mark

feels frustrated when he thinks of the

colleagues he worked with at Union Oil in

the eighties, knowing that their corporate

careers have secured most of them a

pension of thousands of dollars a month.

“Then I wonder: Would I want to give

up what I’ve experienced over the past

twenty years for that?” he says. “No, I

wouldn’t.”

LINDA & MARK MAJORS Aspiring Adventure Retirees, ages 50 & 57

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“We felt like in spite of what we tried to do, we hadn’t done a proper job of saving.”


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Linda adds, “I don’t think we’d trade our

jobs for that at all. We feel like we’ve

helped make the world a better place.”

The couple first started talking about

retirement plans and crunching numbers

two years ago: “We felt like in spite of

what we tried to do, we hadn’t done a

proper job of saving,” says Mark. They

had been informed that their investments

should generate 75% to 80% of their

current income each month in retirement.

“That’s true if you stay where you are,”

Mark says, “because lots of things you

spend money on now don’t go away if

you stay put. But we believe that if we

can find a way to patch together the

assets we have now, the assets we can

liquidate, and the eventual Social Security

we will collect, we hope we can be fine in

another country. It doesn’t look that hard

on paper.”

Living on $3,000 - $5,000 a monthThe couple did their homework, reading

books and taking part in conference calls

for retirees interested in living overseas.

After much research, they concluded

that their ideal adventurous lifestyle

combining their old hobbies and pursuing

new experiences would cost $3,000

to $5,000 a month, including health

insurance. “Between the Affordable Care

Act and everything else in the U.S., what

it costs to have health insurance here is

out of control until you’re on Medicare,”

says Mark.

Their main reason for exploring other

countries is simply that the cost of living

is lower. “This country is huge,” Mark

says of the States. “There are plenty of

interesting things to do here, so many

climates, geographies, dialects, and local

food. The problem is staying here and

exploring is crazy expensive.”

Another big reason for retiring abroad is

their love for learning new cultures. Mark

points out that it would solve the problem

many retirees face: having nothing to do

and becoming bored. “If you don’t know

how to order food in the restaurant, or

buy the stuff at the market,” he muses,

“all those things are challenges, but we’ll

embrace them because it will make life

interesting.”

Linda adds with a laugh, “And make sure

that our brains stay active and avoid

Alzheimer’s, we hope.”

“We’ll have a big suitcase, a small suitcase, and a backpack. That’s it,” says Linda, “We’re only buying stuff that we think we are going to need in that lifestyle.”


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For the first few years of retirement, this

couple who loves to hike is planning to

keep moving from country to country.

Their shortlist of retirement destinations

includes Mexico and Panama, but there

are many more countries in Europe and

Southeast Asia under consideration. The

generous couple’s criteria for evaluating

destinations not only include the local

infrastructure and healthcare, but also

the opportunities for giving back. As

Mark explains, “You can volunteer here or

you can volunteer somewhere else, and

maybe it’s more important somewhere

else than it is here.”

Does That Go To Panama? If Not, We’re Not Buying It Such a large change of lifestyle requires

that Mark and Linda begin making many

adjustments now, including downsizing.

“We set a goal that volumetrically two

wine boxes of stuff would leave the house

at least every week,” says Mark. Besides

donating items they won’t need to the

less fortunate, Marks admits, “I’ve been

working eBay for two or three years just

trying to make things go away!”

“We’ll have a big suitcase, a small

suitcase, and a backpack. That’s it,” says

Linda, “We’re only buying stuff that

we think we are going to need in that

lifestyle.”

Adds Mark, “Our watchword is, ‘Does that

go to Panama?’ If not, we’re not buying

it.”

In order to reach the lump sum they need

to achieve their retirement goals, Mark

and Linda are liquidating their assets,

including selling their second house and

eventually their own home. According to

Mark, the investment property they own

was a safety valve more than a retirement

destination: “We thought if we want to

stay in California and live a California

lifestyle, we can’t stay where we are

because of the property taxes – the

amount of asset that is tied up in sleeping

in the house that we already own.” They

estimate their property tax at about

$7,000 or $8,000 a year.

“If we can patch together the assets we have now, the assets we can liquidate, and the eventual Social Security we will collect, we hope we can be fine in another country. It doesn’t look that hard on paper.”


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TIPS FOR OTHERS DREAMING OF LIVING ABROAD

1. BE SURE THAT IT IS WHAT YOU REALLY WANT ”Know thyself,” are Linda’s first words of advice. “Many of these

countries that we’re talking about, where the cost of living is lower,

they are not America. The resources are different, the climate is

different, the language and the people are different. Are you ready for

that?”

Vacationing has also become a research experience for the couple.

“Usually we would go diving somewhere, go have beers, eat at a

restaurant, drink more beers, and have a good time. Who wouldn’t

like that? But usually you’re only there for a week or two, so you don’t

get bored with it,” says Mark. “We’ve tried to analyze locations since

starting the search for where we might live. We take say a Monday

morning at 11 o’clock and imagine we’re at this destination, but we’re

not on vacation. Does it suck or is it okay? We’ve got both eyes open

to the vacation effect.”

2. MAKE SURE YOUR PARTNER IS ON THE SAME PAGE ”We have to agree, otherwise it’s not going to work,” says Linda, “It’s

actually a leading cause of divorce in couples who move to other

countries - because one person is good at Spanish and the other

person isn’t, or they have different ideas about what it’s supposed to

look like.”

“If something is really not working for one of the people, the other

person in the couple has to say, presumably, ‘It’s more important that I

maintain my relationship than pursue this,’” Mark adds, “You’ve got to

make a choice.”

That would certainly not be an easy choice to make, so be sure to

discuss your retirement dreams with your partner sooner rather than

later. The couple hopes that their family and friends will visit them no

matter where they retire.

I look forward to a postcard from Mark and Linda to learn where they

wind up and see how retirement turns out for them.


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Every retiree in this book has followed a different path. Our hope is that reading through

their experiences and taking in their wise advice will help you to understand that while

there is no one way to retire, there are certain habits that lead to successful retirement.

In particular, the retirees in this book have shown the importance of the following habits:

1. Living frugally Living below your means is the only way to build wealth and plan for retirement.

2. Maintaining control of your investments

No one will care about your retirement as much as you do. Taking the time to educate

yourself on investing is one of the best “investments” you will ever make.

3. Avoiding debt

You cannot build wealth when a portion of every paycheck is owed to a creditor.

Learn to live free of debt.

4. Remaining flexible

The only constant about life is that it is always changing. Having the flexibility to

handle job changes and losses, market corrections, health scares, and other life

changes will allow you to stay focused on your long-term goals.

5. Start saving as soon as possible

Even though not all of the retirees in this eBook started saving in their twenties, they

all started as soon as they could. Now is always the best time to start saving, no matter

what has come before — which every successful retiree in this book understands.

I hope that the collective wisdom of these retirees inspires you to take the next step on

your path to retirement. The retirement of your dreams is waiting for you.

For more retirement reading free of charge, we recommend:

The Retiree Next Door: Successful Seniors’ Surprising Secrets

The #RetireeNextDoor: The 100 Best Retirement Tweets

CLOSING THOUGHTS


http://www.moneytips.com/retweetables-ebook


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EMILY GUY BIRKEN

@EmilyGuyBirken

Finance Writer & Author, The Five Years Before You Retire

KATIE BREWER

@KatieYRL

CFP®, President, Your Richest Life

CATHY CURTIS

@cathycurtis

CFP®, Investment Advisor & Financial Planner, Curtis Financial Planning

RICHARD EISENBERG

@richeis315

Senior Web Editor, Money & Security and Work & Purpose Channels, Next Avenue

KATE HOLMES

@the_kate_holmes

CFP®, Founder & CEO, Belmore Financial, LLC

JEFF ROSE

@jjeffrose

CFP®, CEO and Founder, Alliance Wealth Management LLC

ALAINA TWEDDALE

@AlainaTweddale

Freelance Business Writer

ROGER WHITNEY

@roger_whitney

Founding Partner, WWK Wealth Advisors

THANKS TO THOSE WHO HELPED US TELL AMERICA’S RETIREMENT STORIES

www.moneytips.com

www.moneytips.com

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