My Retirement Roller Coaster

on Aug 26, 2011 by Michael Rupured

After finishing college and launching my career, retirement seemed like an impossible dream. Work was my life sentence for a frivolous youth and a mountain of credit card and student loan debt. Any money I could set aside was more likely to be needed for a casket and burial plot than a condo in a retirement community.

Before I finished school, several of my employers required me to contribute to a retirement plan. I always kicked in the minimum and when I left their employment, promptly withdrew any cash I’d accumulated. In one case, I passed up a two-for-one match and in every case, I paid taxes and a ten percent penalty for taking the money out. Let’s just say I was living in the moment.

My first professional position was with the federal government. By then, I’d wised up (a little) and contributed the maximum amount to the Thrift Savings Plan. Since I got a late start, I picked the most aggressive options for my retirement portfolio. Slowly but surely, the value of my portfolio increased.

Several years later, I discovered that the TSP was in addition to a pension plan.  For the first time, retirement seemed like a real possibility. For lots of different reasons that seem crazy now, I assumed I’d stay with that employer until I reached retirement age. Since I wouldn’t need the TSP, when I left, I cashed most of it in, rolled the rest into an IRA, and used the money to pay down my mountain of debt. As before, I paid taxes on the withdrawal along with the ten percent penalty.

An opportunity came along that I couldn’t resist. My retirement options with the new job were either a state pension plan or a 401(k)-type plan [technically a 403(b)] which included a match from my employer. Since the state pension plan wasn’t portable and I wasn’t sure I wanted to stay in Georgia forever, I opted out of the pension plan and assumed once again I would have to work until I died.

By 2005, the value of my portfolio had increased to the point where I started getting nervous about managing it myself. I had 25 or 30 different mutual funds with similar investment objectives in half a dozen different accounts. When the tech bubble burst and my portfolio lost more money than I made in a year, I got scared enough to seek professional help.

Since then, my portfolio has been actively managed by a wealth management company. They shifted things around so that my portfolio is more diversified and even figuring in their cut, significantly reduced the fees I’d been paying. The best part is that I no longer lay awake at night worrying about whether or not I’ve made the right decisions about where to put my money.

My portfolio has taken quite a beating over the last few years. Still, my financial planner tells me that retirement is once again an option for me. Depending on what happens to the market, I am on track to retire sometime in the next ten to twelve years. I try not to think about how much sooner retirement would have been possible if I’d left my money in the market all those years ago instead of cashing in.

I use Quicken to keep track of my holdings. Unless it’s the weekend or a holiday, sometime after the markets close I log-on and update my account balances. Lately, on any given day the value of my portfolio goes up or down in multiples of my monthly salary.

Instead of freaking out, I keep my eye on the prize. Since I’ve still got plenty of time before I retire, rather than the losses, on down days I focus on how much more my regular contributions will buy. On up days, I sometimes dance around the living room here in…

My Glass House

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