[January 02, 2009]

Couple scrambles after nest egg cracks: Recalculating retirement

(Omaha World-Herald (NE) Via Acquire Media NewsEdge) Jan. 2--Chuck and Julie Nash took early retirement last year, confident their investments would last for at least 30 years.

Then came the subprime mortgage debacle, the failure of high-profile investment banks, and the credit crisis.

The stock market lost 40 percent of its value between May 2008 and November 2008, and in late fall came the official announcement of what many people already knew: The economy was in a recession.

The Nashes' portfolio, once in the high six figures, is down by a third. And Chuck and Julie, worried they might outlive their investments, are working part-time jobs to help cover living expenses.

Chuck, 59, retired in May 2007 as an accountant at Qwest Communications, and now is music director at an Omaha church. Julie, 56, who was laid off about a year ago from her information technology job at Qwest, works 30 hours a week as a clerk at a craft store.

The couple's story is being played out across the country as retirees and near-retirees reconsider their finances. Investment accounts have lost trillions of dollars, and it could be years before financial markets reach the record heights seen in late 2007.

Nash said he and his wife realize their financial situation still is better than that of many people. They own their home and their three children are grown.

Nonetheless, their retirement plan is in shambles. They don't have company-paid pensions, and it will be years before they are eligible for Social Security.

The Nashes declined to invest money in a company-sponsored annuity that would have provided about $4,500 a month. They felt they could do better on their own working with a financial adviser.

"The markets were doing well," Chuck said. "We thought we were pretty smart in how we invested."

They looked confidently toward the future when they left their jobs at Qwest, so much so that they even got a mortgage to buy -- and spent money renovating -- a summer cabin on Cedar Creek Lake near Louisville.

They hope to keep the cabin even through these hard times.

Chuck started working at the church last March on what he thought would be an interim basis. In September he asked if he could keep the 15-hours-a-week position permanently.

"I realized I would have to go back to work anyway," he said. "This job was just putting strings on my guitar. Now it's got to put gas in the car and some groceries on the table, too."

The Nashes are living largely on their savings and on income from their part-time jobs. Lately, they've been afraid to look at what their investments are worth. They hope to avoid making withdrawals while the markets are down.

Chuck applied for a job at a high-tech store in October, but didn't hear back. He suspects his age was a drawback.

Julie said she would have preferred to not work, but she enjoys her job at the craft store. She didn't have any trouble getting hired, perhaps partly because her hobby is scrapbooking.

The job pays just above minimum wage, which in Nebraska currently is $6.55 an hour. That's a lot less than what Julie received in her last job, but she also has less responsibility, which suits her fine.

She could have sought another software engineering job, Julie said.

"But I wanted something a lot less stressful."

Chuck plans to start taking Social Security payments of about $1,500 a month as soon as he is eligible, at age 62.

The couple -- who worked many years at good salaries -- expect to receive a combined $3,000 a month when both receive Social Security in 2014.

"Hopefully that'll still be around," Chuck said of Social Security.

Chuck said he might have to find a more demanding job, but he hopes not.

"You know what they say, 'My get up and go has got up and went.'"

But if he ultimately does have to work full time again, that will be OK, he said.

"We think we're pretty blessed to even have retired for a year and half."

--Contact the writer: 444-1117, joe.ruff@owh.com

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