Category : Retirement
THE STORY OF JOE AND ANDY
Joe and Andy were childhood friends, and they kept their friendship alive all through their lives. They didn’t move far from their hometown, and they always made time for each other, playing poker once a week for 25 years, going on fishing trips together, and attending football games at their local high school.
They were good buddies, but although they shared a lot in their lives, they didn’t share the same approach to saving for retirement. Joe was a long term thinker, and he gave a lot of thought to his retirement. He put as much of his pay as he could into his 401k plan, and he managed to diversify into real estate, annuities, and even a cash value life insurance plan that would provide a tax-free income. He lived modestly, and didn’t buy much on credit, because he didn’t want to be in debt.
Andy couldn’t be bothered with that. He never had a budget in his life, and he always bought whatever he wanted. He lived in a bigger house than he could afford, and he traded in his cars every two years for a newer, more expensive model. He borrowed against his 401k and never put aside anything extra. When he got laid off in his 50s, he never found another job with the same pay or benefits, and he dipped into his retirement fund to finance his lifestyle.
When Joe and Andy turned 65, their lives were very different. Joe and his wife Susan were able to start receiving income from their annuities and life insurance policy, so they were able to buy a vacation home. They had enough money to live comfortably in both of their properties, plus take a couple of vacation trips each year.
Andy and his wife Diane had only Social Security to live on, and they had to move to a smaller house, sell one of their cars, and cut back in every area of their lives. Andy even had to stop playing poker with Joe every week, because he didn’t have the money for it!
In poker terms, Joe and Andy played their cards differently, and that made all the difference in their retirements!