Early Retirement is a Two-headed Coin

Lyndon Johnson was president, the Dow Industrials climbed into the 800s and I was completing my first year of marriage. It was 1964 and I decided to save for early retirement.

At age 29, I was making $140 a week. Charlie, who later became my financial advisor for a while, warned that only 5 percent of the workforce planned for retirement. It was the best advice I ever followed. That's when I started investing.

I pledged $5 a week to a mutual fund. Too bad I didn't up the ante. If I had started with $50 a month, I would have accumulated more than $100,000 before my 62nd birthday on just an 8 percent rate of return. Catch this: $200 a month would have sent the total past $375,000.

Early retirement, however, is a two-headed coin: finances and emotions. Actually, the easier of the two is the money. As you age, you most likely earn more. In turn, you should save more. First, I started an estate plan, then a 401 (k), stocks, mutual funds, a variable annuity, money markets, etc.

As I invested, I became wiser. The estate plan I had with Charlie didn't do badly, but I investigated and did better switching to another venue. I did 300 percent better the first year.

My key strategy is this modified axiom: Don't look gift investments in the mouth.

When an employer offers a stock purchase plan, jump at it. Obtaining shares at below the market price is a no-brainer.

When an employer offers profit sharing, jump at it as long as the outfit is doing well and share the wealth.

When an employer offers a 401 (k), jump at it because it's a win-win situation. Every dollar that goes in, up to a specified level, is usually matched 50 percent or thereabouts by the firm. While the pot is sweetened, the money isn't taxed until you start withdrawing the benefits.

When you receive unexpected cash, save or invest. Putting money away for retirement should become habit-forming. Start early and do it regularly. It won't hurt a bit. I can vouch for that. It's never to late.

The emotional aspects of retirement are more difficult. It wasn't easy to walk away from a full-time editorship after nearly 32 years with the same outfit, missing just a dozen days since Aug. 23, 1965. So I started a countdown on my desk calendar at "The Miami Herald" to ease job withdrawal.

During the last year leading to the fateful day, Jan. 31, 1997, colleagues would ask, "How many days?" "Seventy-seven and counting," I would reply. "Seventy-six and counting. Seventy-five and..."

Retiring, however, doesn't mean you have to quit working. You just move into the driver's seat.

I have a nice pension.I joined the part-time circuit and am doing very well editing and writing. So well that I put off collecting Social Security benefits until 63 1/2 when my wife was 62 1/2. When I did, Anita began collecting a spousal benefit, which amounted to nearly 40 percent of what I would have received at 65.

Our lifestyle hasn't changed one iota. I haven't needed to tap any of three retirement funds, including an IRA that I rolled over from my 401 (k).

Knowing how much money you'll receive in retirement is half the financial puzzle; the other half is knowing your living expenses.

Paying off any debts helps balance the household budget. An emergency fund, say in a liquid money market, ensures that surprise financial setbacks won't be catastrophic. A senior's partners account at 55 or older saves banking fees and the cost of checks.

It's never too late to plan for retirement. But the sooner money is put to work, the quicker retirement can be enjoyed. It's that simple.