Tauns’ Blog

Today as the Dow plummeted, I called my dad to make sure he hadn’t had a heart attack.  My dad is a worrier even when there isn’t anything to stress (you now know who to blame for how I am).  Since he was having severe heart problems this weekend, has had 2 sever heart attacks in the past and has been stressing money, I knew that stocks plummeting would have him beside himself.

As I talked with my dad, I could hear the worry edged in his voice.  My dad is a baby boomer.  The plan was for him to have an earlier retirement that was until his company sold out his division.  With all his heart problems an early retirement would have been a great thing for my dad.

My dad is always one that is prepared.  He pays his debts then he plays.  Any debt he now accrues does not exist without money to pay it off in full.  He uses credit cards monthly for “free” money, so he can gain interest in his bank account.  I don’t know the last time my dad actually paid interest of any sorts to a credit card company.  My dad had his house paid off within 15 years of living there.  After it was paid off, he started saving for the updating and remodeling they wanted when they first moved in.  My mom didn’t get a new kitchen until a year ago, something she had wanted for 20 years.

My dad loves to vacation, but even more he likes to have money saved before.  I have always known that my dad had money.  When I looked towards the future, I never saw my parents as having financial hardships once retired.  Even with all the medicines my dad takes for his heart, I saw and knew their retirement.  They were well taken care of.  Growing up, I had all my needs and then some fulfilled.  I went on several family vacations.  Before I was married I had been to several countries, states and Disneyland more than I could count.  In high school, I had a car to drive with insurance completely paid.  All I had to do was get good grades and pay for gas (most of the time ).

401k was not something that existed when my dad started preparing for his retirement.  That generation was always told that Social Security would be around to help out.  In the 1990’s 401k’s became the new thing as people realized that Social Security wasn’t going to be all that social and it definitely wasn’t secure.  After a lifetime of paying into it, many baby boomers were starting to worry that nothing would be left for them.

Stocks, invest.  That is what most baby boomers were advised.  Invest in long term stocks for your retirement.  Each company had different options.  Companies with stock options were considered golden, especially Fortune 500 companies like the one my dad worked for.  His stock options were amazing.  401k was all tied into stock; they didn’t really get any other options.  Of course, most employees bought into these options because how can you pass up purchasing these stocks at a steal of a deal? 

Most people that work for major companies have a 401k option.  Retirement is where it is at.  After all, do you want to spend your golden years working as a greeter at Wal-Mart?  The company that my dad worked for had great benefits that were cheap.  The employee stock purchase program was amazing.  My dad always saved on the side but his retirement was tied to this company stock.  The company was always at the top and did great; my dad’s retirement looked outstanding.

On September 11, 2001, stocks plummeted.  My dad lost tens of thousands upon thousands of dollars in the stock market.  When I spoke to him, his exact words were, “I am still farther ahead than I was before, and I am ok.  I can’t count my chicks until all the eggs hatch.”  In other words, he was ok.  He lost money but it was something that happened time to time.  My dad invested for long-term, he wouldn’t jump ship.  He held his course and looked to the future.

Since September 2001, my dad has had 2 major heart attacks.  The first heart attack he set a record in Utah for the highest level creatine phosphokinase (CPK), in the blood and surviving.  His second heart attack was extremely critical, mainly because it was 6 months after his first.  After a defibrillator was put in his heart, he has had several heart attacks prevented.

My dad was supposed to have an early retirement.  The company had a policy:  if you worked for the company for 25 years and were over the age of 53, you were eligible for early retirement.  You would retire with full medical benefits for the remainder of your life.  Your spouse would have benefits as well.  You would receive 40% of your highest paid years as well as all your stocks would be completely vested and you could withdraw any of them with no penalty.  Sounds like a great retirement deal huh?

The company had a big group of baby boomers that had been with the company for almost all, if not all, their adult working life.  A year before many would start being eligible for retirement, the company started to sell off different divisions.  $1 billion for this division, $5 for that one.  The company sold off the branches that had the most people eligible for retirement.  He was starting to stress retirement; after all, what if his branch was sold off?  He was supposed to be retired, instead he would have to work for another couple years.  Retirement age was now set at 58.  He would be with the company for 30 years at that point.  Then he was sold and his future changed.

Today I called my dad when everything went berserk.  For the first time in his life, he doesn’t have a financial plan.  He lost over $100k in stocks, the original company froze all assets and is refusing people the ability to withdraw (short sell).  The company he was sold to doesn’t have great benefits of any sort; his retirement was vested in the original company (one of the only good things employees got in the buy-out).  The company my dad started with is collapsing.  He has a savings that I would LOVE to have on hand.  I dream of the day that I have $50k in a savings account; however, I don’t want that to be my sole retirement when I am almost 60.  He is now ready and needing to retire for health reasons, but can’t. 

Since September 11, the main company in which he worked and has retirement stock in has never made a full recovery.  They would gain and loose like any company, but the stocks never really soared again.  He held out because it was only a year, but each year came and went as each new change was made to prevent his plans.  He was in it for the long haul, but was the company? 

I have always had the security that no matter what, my dad would be able to take care of him and my mom as they grew old together.  The one thing my dad worked so hard to prevent was history repeating: his children taking care of him and my mom financially like he did for his parents.  I now look and see that in 20 years I may be sitting at his kitchen table with my laptop typing in the dollars that need to go from my bank account to pay for his utilities, food, medicines; the same thing I saw my dad always try to prevent, what he would do with his parents, only altered by the laptop instead of a checkbook.

I guess no matter how hard you plan and work, sometimes history repeating itself is inevitable.