The Things He Got Right.
I am the daughter of a FIRE pioneer. My father retired at the age of 55 in 1989. This may be older than many of the people in the FIRE community intend to make as a retirement age but, relative to the general population, much younger than average. What is remarkable is that he was ahead of his time, and he was able to do this as an aerospace engineer making a modest income. In this post I will examine some of the things I believe have enabled him to do this. Unfortunately, I am not able to get the best firsthand account from my him since he is no longer the most reliable historian. He is now 85 years old and suffers from Alzheimer’s disease.
My father graduated from UCLA in 1955 and his first and only job was working for Lockheed Corporation as an aerospace engineer. Needless to say, my father was a math nerd and, from my understanding, enjoyed his work early in his career. We used to go to the California Science Center together and he would remark with pride how he had designed the ejection seats in the cockpits of the retired fighter jets that decorated the space around the concrete parking structure. I thought it was cool that he was in charge of the part that saved lives if something went wrong with the plane. At some point in the early 1980s, he was promoted and was sent back to UCLA Anderson to get his MBA. This resulted in a shift of his responsibilities from engineer to project manager. I assume this is when his relationship to his career began to change. He was not subtle about how he disliked his job and would often speak of the stress and pressure he had over him. He would say that one mistake at his work could cost many lives. In his mind, accidents did not exist, only failures.
We call this burnout today. There were no catchy phrases for what he was experiencing back then, and his feelings would probably have been perceived as weakness by his peers.
When I sat down with him recently to see what I could learn, he confirmed what I already suspected. He was not happy at his job when he left. What I did not expect to learn was that this was a decision that was fairly impulsive. Lockheed was undergoing a potential leveraged buyout in the late 1980s and the future of the company and its benefits were uncertain. In an attempt to get some people permanently removed from the payroll, Lockheed expanded its pension benefits to include younger employees. My father was one of the few people that seized the opportunity. My mother confirmed the decision was sudden. They sat down with a financial specialist in HR, reviewed the numbers and he signed the papers. He never worked (for money) again.
In hindsight, I can see he made some financial decisions early in his career that enabled him to jump ship at the age of 55 and remain comfortable for the past 30 years.
My parents carried little to no debt other than their mortgage. They purchased a modest house and stayed put and were able to pay their mortgage off in full while they were still young. My parents confirmed they paid off their house shortly before he retired and in so doing, kept their living expenses down. They paid off credit card statements every month. They bought reliable cars with cash and used them for years. My father purchased a second vacation home a few years into his retirement in a national forest outside of Los Angeles and bought it with cash.
My parents purchased, as I mentioned above, a modest home that had a purchase price significantly below their means. They found a home just large enough for a family of four and in an excellent public-school district. By keeping their mortgage low and saving on education costs for their children, they were able to direct extra income to investments and savings.
Investing and Saving
My father told me that they put everything left over after expenses into diversified retirement and taxable investment accounts. They did have savings but most of their expendable income was directed toward stocks instead of keeping it in a low interest savings account. Apparently he did very well managing his own retirement accounts but sought the help of a financial advisor a couple of years into retirement.
Hiring a Financial Advisor They Trusted
I will refer to this as an item “they got right” but will mention it again in “what they did wrong” in my Part 2 post. They did very well with gains in the stock market over the years. They did, however, weather two significant setbacks in the stock market and without much concern. They attribute this to the wisdom of their advisor. I will tell you that the MOST important thing they did was to not panic when stocks turned south, even in 2008. They did not sell low (like I did, ugh). They sat the course and ended up ahead. But despite the gains in their accounts, what I am now seeing as potentially the biggest benefit from having a trusted family advisor is what happens in the event that one becomes disabled or unable to manage their own finances, as is the case with my father. Their advisors have become instrumental in helping my mother, who was only peripherally involved in household money management until 2 years ago at the age of 76. They are helping her budget and make plans that include paying for expensive full-time care for my father as well as considering her potential needs in the future. I am very grateful for the help that I am incapable of providing and trust them whole heartedly.
I always wondered if we had less growing up but realize now we had much more than our neighbors. I wondered why I didn’t get the latest Guess jeans (it was the early 80s!!!) that all my friends were wearing. Why we didn’t have a BMW or Mercedes to drive. When I would ask about these things, my parents were very philosophical in their response. They would try to explain to me how the objects people have is not a measure of one’s worth. My parents could care less about these things and it used to drive me crazy. It took growing up, making money and buying these very things for myself to realize how empty these objects left me. That is not to say that we did not travel every year and enjoy many outings and events. This taught me that time to do the things I want to do, with the people I love, is invaluable.
My father worked for a company that was known for excellent benefits. Not only did this include comprehensive medical and dental benefits for him and our family. It provided retirement investment accounts as well as a pension that he still receives, 30 years later. Adding social security 10 years after his retirement buffered the effects of inflation, and again 7 years after that when my mother turned 65. In addition, a portion of their medical benefits remain subsidized by Lockheed. For physicians who may be reading this, disability and life insurance can be options provided by some employers as well, providing an additional safety net if your income is threatened by illness.
My father was extremely active during the first two decades of his retirement while he was still young. He became a trained volunteer and tour guide at the L.A. Zoo. After that he became a volunteer for the Mountains, Recreation and Conservation Authority and worked at one of our beautiful Los Angeles state parks. He and my mother traveled all over the world. They went to Russia, Europe, the Caribbean, the Philippines, and more. They visited me when I was in medical school, taking the train coast to coast and back again, making many stops along the way. It has been sad to watch his health decline, but I know that he lived his life very fully for many years after retiring. I think about this a lot when I consider the fact that most people retire around the age of 65.
When I realized I was in a position to not be dependent on working full time to maintain my modest lifestyle, I knew it was because of the habits I had learned watching my parents. I am lucky to say that I no longer work because I have to, but because I want to. And I enjoy my work much more, most certainly because I eased the pressure of burnout by going back to work part time. I now see that the money I earned and saved, working hard for many years, has ultimately purchased the thing I hold more valuable than any object, Time.