- The Washington Times - Monday, November 10, 2008

Hope Fahey thought she would be enjoying her retirement by going on hikes and cruises with her boyfriend. After spending 28 years working at a law firm in Sumter, S.C., Ms. Fahey moved to Myrtle Beach, where she met Andy at a dance three years ago.

“Things could be wonderful,” she says. But they aren’t.

Each month she is going deeper into debt to foot the bills for her 31-year-old son Chris, whose family is on food stamps. Laid off, he has been unable to find a job to support his pregnant wife, Felicia - who suffers from multiple sclerosis - and their 2-year-old daughter, Brianna. This past summer, their electricity was cut off and the family was eventually evicted from their home. The city’s homeless shelter was full; the housing assistance program was out of money; and the mental health department couldn’t schedule Chris for treatment for depression until January.

Their predicament poses a major choice for Ms. Fahey, who is now one of a growing number of retirees being forced to rethink their plans and, perhaps, even go back to work.

Ed Bone, a retired surgeon living in Dallas, says he has lost about 40 percent of his savings that were invested in equities over the past year.

“Fortunately I have a high enough percentage of my total portfolio invested in fixed-income entities of various sorts that I don’t really worry about selling in this kind of a market right now,” he says. “If this goes on for an extended period of time, then it might be a different story.”

But even in the event of a prolonged recession, Dr. Bone, 65, says he’d probably go back to work part-time before realizing the losses that selling would entail right now.

He and his wife, who have a daughter out of college, sold their home last month and are currently renting as they use proceeds from the sale - they made out well because the part of the city they lived in wasn’t hurt by the real estate downturn - to build a smaller home. In a normal market, he says they would probably spend more on the new house, but aren’t comfortable doing so in current conditions.

To ease some additional anxiety, he says the couple moved some of their savings to banks that have been rated as among the safest.

Local retiree Lucy Schleibaum knows she is an anomaly. The 64-year-old not only retired three years ago with her home and her cars paid off, but she has only lost $4,000 as a result of the financial crisis.

“I said one thing for sure I’m going to do isn’t put my money in stock,” says the Burke resident, who had several friends lose money in 2000 around the time the dot-com bubble burst.

Instead, she put everything - both the lump sum she received after 32 years at Allstate Insurance Co. and her joint savings with her late husband - in bonds.

“I figured I earned enough money in my life and I didn’t want to angst over the stock market,” she says, looking back. She did put $8,000 into a mutual fund for “ready cash” and lost about half.

Most financial advisers have the same advice for everyone with investments in the market: Do nothing.

“The time to plan for this is not now, it was probably six to 12 months before now,” says Brent Wilsey of Wilsey Asset Management in San Diego. “You just have to be selective. Any time you panic at a point like this and you pull things out, it’s proven that you didn’t do as good a year or 18 years later as [you would have] if you just stayed with a good quality portfolio.”

As for Ms. Fahey, she says she can’t sustain her current arrangement.

“I can’t go off on a cruise and be happy knowing that he can’t hold a job and he can’t support his family,” she says, noting that Chris - who didn’t go to college - would have a hard enough time finding work in a strong economy, let alone a tightened one like this. “I’m actually at 60 more marketable in the job market than he is.”

Because her annuity gives her enough to live comfortably but not much more, Ms. Fahey took out a line of equity and bought her son’s family a condominium in a nearby town. She pays his mortgage and utility bills. She also loaned him her car and sends $50 a week for gasoline.

Although she hasn’t imposed on her new mate, she worries he will tire of the situation.

“We’re cutting our lifestyle short so that I can channel my funds,” she says, adding that she has already canceled a trip to Greece with their friends. “I think he loves me enough I wouldn’t have to worry about losing him.”

She buys lottery tickets every week.

“That’s my name - Hope,” she says.

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