Retirement, Interrupted
by Donna Rosato

June 8, 2007

The Daimlers carefully mapped out a post-work idyll full of grandkids and sunshine, but the finances all hinged on being able to flip Florida real estate. Oops. Now they desperately need a Plan B.

Walking along a pier in Daytona Beach with their youngest grandson on a recent Saturday afternoon, Steve and Carol Daimler stopped to see what fish the locals were catching. The fishermen wowed 10-year-old David with a big flounder they'd just landed and photos of a 500-pound, nine-foot shark they'd once caught. After a day spent playing miniature golf, eating homemade ice cream and splashing around in his grandparents' inground pool, David declared, "This is the best day of my life."

Such perfect afternoons are exactly what Steve, 61, and Carol, 60, had in mind when they retired to Florida from Virginia two years ago. But those days are rare. Instead, the Daimlers spend most of their time consumed with selling two investment properties they bought shortly after the move—holding open houses, distributing fliers, cold-calling realtors and catering to prospective buyers. A more typical day: On a midweek afternoon, Carol got a call from a prospect who said he and his wife were just outside one of the houses and wanted to see the interior. The only hitch: The house is an hour's drive from where the Daimlers live. The caller said he'd wait, so Carol and Steve jumped in the car. But by the time they arrived, the phantom buyers had disappeared—the frantic trip was a bust. To this day, the properties remain unsold, draining nearly $6,000 a month from the Daimlers' dwindling retirement kitty.

The couple thought the properties would help finance the lovely new life they planned to lead in Florida. They had retired from their jobs—Steve was a sales executive and Carol a benefits consultant—and moved to Florida to be closer to David and twins Mark and Nicole, 13, their oldest daughter's kids. To supplement their retirement savings of $260,000, they figured they'd buy fixer-upper homes to renovate, then sell at a profit in the state's hot housing market. "We thought we'd make $100,000 without batting an eye," says Carol.

But when the housing bubble burst, so did their dreams of a real-estate-funded retirement. The properties have been on the market for nine months without a serious offer, and the carrying costs are killer: The Daimlers pay more than $65,000 a year on their mortgages (including loans for their primary residence and a vacation house in North Carolina), plus tens of thousands more for property taxes, insurance and maintenance. The couple are pulling out $15,000 a month from savings to cover their expenses, and they've already run through more than half of their nest egg.

The irony: On paper they seem to be in great shape, with a net worth of $1.6 million. But since most of that money is tied up in real estate—assets they can't easily sell—it doesn't ease their current cash crunch. Money is so tight that Carol has stopped filling prescriptions for her cholesterol medicine. Steve says he has no choice but to go back to work. "The financial pressure is too great," he says.

The Daimlers are certainly not the only retirees to have miscalculated financially. In fact, nearly two-thirds of workers who retired and subsequently returned to work say they went back because they needed the income. But being in good company is no comfort to the couple. "We're in this beautiful area and see our neighbors doing fun things like cruises, golfing and going to the country club and we can't enjoy any of it," says a frustrated Carol. Watching their savings drain away, she admits, "is scary." Worst of all, Steve confesses quietly: "I feel like I've let down Carol and the kids." She counters, "We both made this decision, but now it feels like a failure."

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