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Retirement

What would your life look like if you made all the right financial decisions early and often?

Susie, 68, and her husband Bob, 70, say they are pretty healthy and making their financial plans based on each of them living to be 100, barring unforeseen circumstances. Both sets of parents lived well into their 90s, and they believe that they will, too.

When Bob and Susie met, Vietnam was at the height of the conflict, and Bob was about to graduate from college. They got married, hoping to keep him from the war; that plan didn’t work out and Bob entered the Army.  When he returned from VietNam, he wanted Susie to be able to support the children in case something happened to him, so Susie started going to night school and summer school to be a nurse when their youngest was three years old.

Over time, Susie earned a job as a first assistant for a surgeon.

“It was a thorn in my side that my boss and I would sit down every year and talk about raises, and I only got a 2-3% increase,” said Susie. “He told his staff every year that he contributed a percentage toward our retirement instead of giving us a larger raise. It was a wonderful surprise when he retired; we were very grateful. I worked for him for 10 years and hadn’t put a dime in retirement, but came out with $100,000. I didn’t get the money when I wanted it, in terms of a raise or bonus, but at the end of that time, it was a great thing.”

Their children, now 42 and 46, never received an allowance. They were expected to help, says Bob, but they didn’t get paid for household chores.

“Our kids worked early on, and they bought their first car and paid their own insurance and gas when they were 16,” Susie says. “Our son started mowing yards at age 12; if he didn’t do the job the way it should be done, Bob made him do it over. We bought our kids a car when they graduated from college as a graduation gift.”

Bob and Susie’s advice: teach kids to be independent and make them earn their own money, and save it.

“Instead of gifts, we give our grandchildren experiences, like giving them a week of camp. We create a memory and we think that’s really important for kids now.  You have to learn that your gratification is not something you hold in their hands.”

Bob and Susie say they wouldn’t have done anything differently to prepare for their retirement.

“We saved early on, put away our small inheritances, and we maxed out the 401k plans as much as we could,” says Bob.  “We built our third home and after a few years living there borrowed enough from my dad to pay off our mortgage, then repaid the loan at the going rate of savings and repaid the debt in five years.”

They have paid for subsequent houses in cash.

The couple budgeted wisely and thought ahead for their own long-term care.

“When I was 48 and Bob was 50, we bought long-term care insurance,” says Susie. “I think it has gone up one or two times since we bought it 20 years ago; in fact, they don’t even write the policy we have any more. It’s set up for us to have any kind of care we need, or even pay my daughter (who is a nurse) to take care of us. It’s remarkable.”

When they needed some help to make the best decisions for their family, Susie and Bon looked to find an expert.

“Bob made me interview three financial planners and I picked the one who spoke to ME, not just Bob,” she says. “He looked at me and talked to me about what I wanted too.”

The couple decided early in their marriage to live within their means.

“We have never been on a 10 year plan or so – it has always been a life plan,” says Bob. “We taught our kids what we believe – that their payoff is not going to be instantaneous; it’s so much more rewarding now to not have to worry.”

Smith Wealth Advisors