Episode 679 Keeping up - Financially
This is Retirement Talk. I'm Del Lowery.
I’ve entitled this podcast “Keeping Up Financially”.
Home Depot just offered me a job at eight dollars an hour. Not really; just kidding. I didn't get a job offer from anyone. And I don't want one. Not at the moment anyhow. But this is one of the situations of which many retirees have nightmares. If they retire this year, will they have enough money next year? Or in ten years? Or in twenty years. Money is a major concern for many of us as we face the question of retirement. What to do?
This is Retirement Talk. I'm Del Lowery.
There are many sources one can go to for advice on this matter of money. Unfortunately, these sources are almost always making money off of the advice they give. They are always selling something. This always makes me a bit apprehensive. The bookstores are lined with books giving advice on retirement and money. There are a gazillion podcasts and websites that offer advice on retirement and money. All of these platforms seem to have a vested interest in selling you one product or another.
My expertise in this area is very limited. I claim only one credential that might allow me to speak to this issue. But this past week I received a letter from a listener who asked that I write about it. He and his wife have listened to many of my podcasts and know that I retired 33 years ago at age 44. He wanted to know how I could do that financially and how it has worked out. If it has?
It has worked out and it has worked out well. We are still retired. We have not taken retirement jobs and I think we live very well. At least as well as we want. That is my credential.
What did we do?
Our financial plan was set in motion long ago one dark night in Anchorage. It was during the oil boom. Everyone we knew was making lots of money investing in condos, taxi licenses in Hawaii, or some construction related business. We weren't.
We spent all of our money each year. We had bought a house. We had spent many of our summers with our two young children traveling. One summer in Ireland, Another in England and France. Another summer in England and Scotland. We biked and ferried down the inside passage from Alaska to the San Juan Islands. Brenda spent a summer in Majorca and another in the south of France with our daughter. I spent a summer on the Serengeti Plain darting hyenas and another summer in Kathmandu studying with a swami. We had money and we spent it - almost all of it.
Then we got audited. We had not kept all of our receipts. My word was good for nothing. I was shocked at the lack of common sense and insistence on a paper trail. I had never experienced this sort of thing and had a hard time accepting it. Shows you how smart I am. I passed out at work one day. Everyone, including myself, thought it was a heart attack from the stress. Later it was found to have just been a bad case of hyperventilation caused by anxiety. Nonetheless, it was scary.
A friend set me up with a high flying accountant from Seattle; a Mr. Marx. "He doesn't usually handle little cases like yours," my friend said, "but he owes me a favor. Maybe he will talk to you". Late one night I went to the top floor of the Captain Cook Hotel in Anchorage and softly knocked on the door to his suite. A famous high roller from Anchorage was just leaving with his wife who was wrapped head to foot in fur. I knew I didn't belong there.
Mr.Marx used to be the head of the IRS for the western region of the US and then had set up a private practice in Seattle. He came to Alaska rarely for a few privileged people of which - I was a guest. We talked of my problem. He told me to sign a power of attorney so that he would legally be me in dealing with the tax guys. I was to throw away any mail from the IRS that I might receive and let him work his way to a solution of my dismally small problem. I cooperated.
Almost a year went by when I received a phone call. "Could you meet me tonight back at the same hotel". He had settled my issues.
After signing a paper and writing a check for a few thousand dollars he asked if I had a few minutes to sit and chat about my financial future. I couldn't believe my luck. Here was this guy who gave advice to the super rich and he was going to talk to me.
We pulled up chairs in front of the large windows that looked out over Cook Inlet. He told me a bit about himself. He had been a philosophy major in college before going into business as a financial auditor. It helped set me at ease. Then he asked me about my life. "How do you live?" he asked. "Tell me about it".
I spoke of loving my job. It was a great job and had an excellent retirement plan with lifetime health coverage. I told him I had a great wife and two wonderful kids. We had a nice house in the woods. We skied almost every day during the winter. We read books. We didn't own a TV. We ate dinner every night around a candle lit table. We traveled every summer. We were healthy and pretty content if not downright happy. We had enough money for what we wanted. We were lucky.
He leaned back in the chair and said, "I wanted to give you some financial advice. Investment advice, some would call it", he said.
My heart raced. I knew that I was on to something very important and I intended to remember this experience the rest of my life. He said, "I would advise you to not invest in anything. You should go home to your wife and children. Have your conversation and dinner around the table each evening and enjoy your glass of wine. Go to the job that you enjoy. Take your trips every summer. Grow old and die."
He went on, "Whenever someone invests in something and makes some large sum of money and tells you, forget it or tell them of your dinner or bike trips to Europe. Whenever the IRS tells you that you owe them money do not put the envelope down until you have written the check. Mail it in and go on your way. You want to keep living just as you are. That's the best advice I can give you."
We pretty much followed his advice. We stayed with what we had until the kids had left the nest for college. The next year we retired. Thirty three years have now passed and our financial plan or method seems to have worked out well. I will get into more details in the next episode.
This is the end of the first of a series entitled "Keeping Up Financially".
This is Retirement Talk.