Retirement, Interrupted
by Donna Rosato

June 8, 2007

[Continued, page 3]

THE ADVICE

The Daimlers have a few good options to help them get back on track, says the team of experts MONEY recruited to help them. Here are their recommendations:

Make local connections. Steve needs to land a good job quickly and has already reached out to former business associates in Virginia. But since he now lives in Florida, he should also work on developing professional contacts in his new home state, says Russ Jones, president of First Transitions, a Chicago career counseling firm. He suggests Steve join a couple of local networking groups, such as the Glazer Kennedy Inner Circle for sales professionals and Execunet, an online executive-recruitment firm that holds meetings in nearby Orlando. Steve should also ask his Virginia contacts if they know of any jobs in Florida.

Sell the vacation home. To alleviate their cash shortage and help rebuild their savings, Michael Cirino, a financial planner with Lincoln Financial Group in Jacksonville, Fla., urges the Daimlers to sell their beach house in the Outer Banks. Probable net: $650,000. But while Steve is open to the idea, Carol is reluctant. "I have an emotional attachment to that home," she says, "and I don't want to make any more fast decisions."

Institute bargain pricing. To expedite the sale of their investment properties, Greg Antonich, a Daytona Beach real estate agent, urges the Daimlers to cut the prices to at least 5% less than those of other homes for sale in their area. To bring in more prospects, he also suggests offering incentives, such as paying half of a buyer's closing costs.

Spread the wealth. The Daimlers have too much of their net worth tied up in real estate and low-growth cash investments, Cirino says. He suggests creating a more balanced portfolio by shifting most of the money left in their retirement account out of money markets and into stock and bond funds. The planner urges the couple to pay off their credit cards and start rebuilding their savings as soon as Steve starts working.

Consider what lies ahead. Within the next couple of years, both Daimlers will be eligible to take early Social Security benefits, which would give them an additional $32,000 a year in income. That means Steve may not need to work for as long as he thinks, says Cirino. One drawback: Taking benefits ahead of their full retirement age of 65 will permanently reduce their take by about 20%.

After hearing the experts' advice, the Daimlers feel relieved. While their life in Florida isn't what they imagined, they now know that they have options to ease their financial crunch. They're determined to unload their investment properties, even if it means taking a loss. And once they have a cash cushion from the sale, they're looking forward to doing all the activities they haven't had time for, like going boating with friends and traveling to Europe. "We want to enjoy the last third of our life," says Steve. "And now we finally see ways that we can."

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