Monday, May 10, 2010

Creating a New Path

The Seattle Times profiles Sloan, a 65 year old accountant who has been out of work since mid-2009. She's rather enjoying the lessening of the stress caused by 12 hour workdays with her previous employer but her unemployment will be ending soon and she's worried about her future.

This story hit home because Sloan is just a few years older than myself, has saved about $60,000 less than me, and is also diabetic. She has considerable equity in her home, but she still owes $130,000 on it. I'm guessing she took a 30 year mortgage when she bought her home 16 years ago, so she will be 80 years old before it's paid off. Still, she has no other debt, which puts her ahead of me on the credit card front.

Assuming the author of the article is correct, I was interested to learn that Sloan could get Social Security under her ex-husband's account, and let her own Social Security ride until she turns 70, at which time she would get maximum payments on her own account. If this is true, it makes me regret never marrying (though apparently I would have had to have married and stayed married for ten years for this to work).

The article also highlights an issue for older workers who have the work experience but not the educational credentials--Sloan is called an accountant but she never graduated from college. I'm wondering if this makes her more like a glorified bookkeeper? This was fine so long as she was with one employer, as she was for some 20 years. Yet it makes moving to a different job more difficult for her.

I thought it was smart of her to take courses that would allow her to prepare taxes professionally because that would allow her to earn money on a part-time (or part-year) basis.

I was glad to see that though her financial planner had concerns, he also had plans for Sloan that would lead to a successful, though frugal, retirement.

6 comments:

Morrison said...

Interesting article. My rule of thumb (which I always tell my kids) is to have a fully paid off mortgage by the time you are 65.

It's just very distressing that of all the retirement articles I read or hear about, I haven't read one yet where the person soared in retirement or lived a better life than when they were working. It's that 'income' thing. Gotta have a good, steady (and increasing) income stream. That's the key.

How do you do it?

There just is no justification for cutting budgets to the bare bones in retirement. Wasn't it supposed to be our 'golden years'? Gold is a bit tarnished, eh?

Oh well.

Grace. said...

Most of the articles I highlight are from "Money Makeover" columns so it stands to reason that they are about folks in some level of financial trouble.

I suspect many of those with a physically and financially healthy retirement aren't much into blogging.

Us worriers, however, are still on the job!

Anonymous said...

My dad has had a much better life retired than working. His mantra was always, "You've succeeded when your income from investments is larger than your income from paid work." He also has done self-employment projects that bring in additional income in retirement in addition to volunteering (he prepares taxes for free at the library, does sierra club stuff and assorted other things). He's much happier not working for the man. And no, he doesn't have a blog and he doesn't ask for money makeover questions.

Bucksome said...

Grace, a friend recently told me about collecting on your husband's SS until you're full retirement age.

I am planning to do that since my husband is a decade older than me (and statistically will pass before me). It's a good strategy for younger spouses to increase their retirement income.

Grace. said...

Buck--apparently he doesn't even have to pass! Just be collecting his own Social Security--provided either that you are still married to him or were married to him for at least ten years prior to a divorce. Dang! A husband! Who knew they could be so valuable?

Petunia said...

I think Sloan must be a staff accountant. That's what I am, no degree required. However, I do LOTS of income tax returns. I work in a small firm, perhaps she works in a big firm and so doesn't need to wear as many hats. If so, it seems to me that she must have made LOTS of contacts over the years. I think she should consider opening a bookkeeping service.