Podcast 102: How Andrea Retired Solo With Confidence | Actual Retirement Tales

Steve Chen (00:00):

This episode is dropped at you by the Boldin Monetary Planning Platform. Previously New Retirement, create a monetary plan at no cost Boldin.com. Alright. Hey people, that is Steve Chen from Boldin. I’m joined by Andrea Solarz right now. She’s a member of our neighborhood, and that is one other recording of oldsters for our highlight collection. And simply fast intro. So Andrea’s becoming a member of us from Arlington, Virginia, very near Washington, DC and it’s been a member of our neighborhood, and we’re simply going to dive in and form of discuss her story, see what classes there are to be shared. So with that, Andrea, welcome to our present.

Andrea Solarz (00:37):

Nice to be right here.

Steve Chen (00:39):

Yeah, no, I recognize you taking the time. I’d love should you might give only a fast background in your journey to monetary independence and the way you realized the significance of economic literacy and the way you began saving and bought into planning, and we’ll go from there.

Andrea Solarz (00:59):

Properly, that story actually begins once I was a toddler. So there’s a protracted story and a brief story, however I actually was a saver beginning as a toddler. I can bear in mind we, we had a Financial institution of America go e book, and at college you’ll take your dime to highschool and it will get deposited into your Financial institution of America financial savings account. So I began saving that early. And in addition my mother and father did one thing actually fascinating after we had been younger, which gave us a funds. I imply, it gave us cash that we might funds ourselves for no matter our wants had been for our leisure if we needed further garments and so forth. So we needed to handle that. So I discovered to essentially form of deal with cash and give it some thought as one thing that I might use to avoid wasting up for one thing essential that I might use to consider managing each day bills. In order that put me on a great path shifting ahead.

Steve Chen (01:57):

Good. And so this concept of an allowance basically, or was, it

Andrea Solarz (02:03):

Wasn’t an allowance like, oh, should you clear the lavatory, then you definately get an allowance. It was extra like a stipend that you might use. You get with a job, you get a normal sum of money and it’s a must to use it to determine find out how to cowl the bills that you simply need to cowl with it and have to cowl.

Steve Chen (02:25):

Yeah, completely. That’s tremendous essential. That’s fascinating. After which how about investing? Did you begin, so that you had been saving early on, how did you find out about investing and the way did that begin occur?

Andrea Solarz (02:35):

I can thank of my mother and father for that too. For my thirteenth birthday, I bought three shares of vacation in inventory, and my dad was not a inventory investor. He was form of a purchase excessive promote low form of man. He would panic and say, I can’t do that anymore and get out of issues. But it surely helped begin serious about, properly, that is an possibility. You’ll be able to put money into issues. Ultimately it was purchased out. I don’t have any shares from that left, however as soon as I completed up graduate faculty, I additionally opened up an account, was a stockbroker, and began investing in some shares after which finally mutual funds as properly.

Steve Chen (03:21):

Okay, fascinating. So why do you suppose it was Vacation Inn like that specific firm?

Andrea Solarz (03:26):

I’ve completely no thought. I feel partly it was a reputation that folks knew on the time. Possibly he stayed at Vacation Inns on enterprise journey and was accustomed to it. I actually can’t say.

Steve Chen (03:41):

It’s fascinating that you simply acknowledged your father’s retail habits of purchase a excessive and promote low. Did you see that on the time, otherwise you simply realized that later?

Andrea Solarz (03:51):

Oh, I feel by the point I used to be in highschool, I spotted that it simply didn’t slot in along with his temperament to concentrate on investing like that, however they needed to present me a great lesson.

Steve Chen (04:06):

Yeah. Did you share that suggestions along with your father?

Andrea Solarz (04:09):

I don’t suppose I did.

Steve Chen (04:14):

That’s the only Most worthy factor that monetary advisors, I feel that is my opinion, carry to their shoppers, which is they assist them handle their very own habits and acknowledge and hopefully present a shock absorber to that emotional response to the market, getting excited after which placing your cash on the high after which freaking out and promoting it to the underside.

Andrea Solarz (04:37):

That realization was nonetheless a extremely good lesson to me although, as a result of I didn’t try this. I all the time held on.

Steve Chen (04:44):

Proper, proper, proper. Yeah, so it’s good that, had been you studying any investing books?

Andrea Solarz (04:49):

No. No, however I joined the American Affiliation for Particular person Traders and went to a few of their conferences and so forth. So I used to be in my late twenties, early thirties once I was doing that, I assume.

Steve Chen (05:06):

So I imply, that’s talked to these guys. It’s fascinating. So that you’re self-educated round monetary literacy the place you given so nice. Your mother and father helped you with this budgeting thought in true metropolis of investing to you, however then you need to have had some, you clearly had curiosity since you’re on the market looking for out these organizations and issues like that.

Andrea Solarz (05:30):

Yeah, I can’t actually, as a result of it’s been fairly a number of years since then, so I don’t bear in mind particularly how I began that, however I had a way fairly early that I wanted to avoid wasting for retirement, that there was an finish recreation right here that was retirement. And so even with my brokerage investments, I’ve held onto these. I’ve very, very hardly ever offered any of them as a result of in my head they had been for retirement fairly than

Steve Chen (06:04):

How did you find out about the entire purchase and maintain, which is the appropriate solution to do it? Is that self-educated once more? And in addition had been you index investing, had been you mentioned you meant you began shopping for mutual funds?

Andrea Solarz (06:19):

I feel I’d examine them in Kipling jurors or in newspaper articles and issues like that. So on the time, they had been the Janice Worldwide Fund after which the s and p 500. I did, I look again development fund right here. I look again now and it’s like, oh God, now I’ve bought to do one thing with all of those little dribs and drabs and completely different pockets of the market. But it surely was intentional on the time to get, principally to diversify into several types of investments.

Steve Chen (06:58):

Properly, you’re doing all the nice issues. You’re saving budgeting, saving and investing and diversifying and managing your personal habits. That’s superior. Possibly it is best to have been a monetary advisor.

Andrea Solarz (07:12):

Yeah, advisor. Properly, it additionally helps to beat a few of the dangerous selections alongside the way in which too. So so long as you’re making a number of good ones, it really works out okay.

Steve Chen (07:21):

100%. Properly, the, do you have got any classes you discovered alongside the way in which or errors that you simply made that you simply want you might take again or that you’d share with different individuals?

Andrea Solarz (07:32):

Right here’s one. So a buddy had an affiliation with an organization that was popping out with an IPO. So all of us had an opportunity to get in on it, which was nice, which I did, and invested some cash in that, and it went all the way down to 97 cents a share, and I purchased some extra when it was at that degree. And so all in all, I put in possibly $1,200. Then throughout COVID, that funding went up in worth to over 100 thousand {dollars}.

Steve Chen (08:06):

Wow. 100 x or no matter, 50 no matter, six 70 x.

Andrea Solarz (08:12):

Yeah. So I assumed, that is nice. You’re not going to carry on. It’s going to go up even larger. And it went down. It’s now value like $20,000 so you’ll be able to maintain for too lengthy. There’s a lesson there too. It’s like it’s a must to take into consideration, reap the benefits of the place it’s, don’t be grasping and suppose that it’s going to get even higher. It’s nonetheless an enormous enhance over what I invested, but it surely might have been so much higher. Sure,

Steve Chen (08:44):

For positive. Properly, it’s onerous. I imply, you have got these concentrated with particular person equities or any particular person funding. I imply, you’ve actually bought a giant focus threat. And I imply, you’ll hear either side of it. Persons are like, oh, you probably have, I imply, there’s all the time survivorship bias. So individuals who have had Apple are like, properly, yeah, I simply going up then I held on maintain your winners. That’s one factor individuals say, but additionally you find yourself with this large focus threat,

Andrea Solarz (09:11):

Maintain the focus,

Steve Chen (09:12):

After which the argument for rebalancing is that issues which might be profitable and getting large, you dump a few of that and put it into issues which might be doing much less properly. However yeah, so that you’ll decrease your volatility rebalancing, however enhance your chance of getting a constructive long-term constructive final result. So fascinating. Some other massive classes that you simply’ve discovered alongside the way in which?

Andrea Solarz (09:39):

I’d’ve began considering particularly about what it means to handle my cash and retirement and to maneuver in the direction of retirement. Issues like Roth conversions. There have been no Roth accounts. Once I began investing in retirement with employers, that was by no means an possibility. Once I had an employer plan and I did find out about them, numerous on-line studying and so forth, and did a few conversions at a time when it was the appropriate time to do it, which is when you find yourself now not in the next tax bracket when you’re employed, however earlier than you begin social safety. In order that’s type of the golden level for doing these. And that’s once I did them. But when I assumed extra planfully, I’d’ve began just a little earlier in order that I might have gotten extra in and likewise making the most of capital good points, zero tax charges, and I did that one 12 months, but it surely’s like, oh man, if I’d realized that earlier, I might have reset the idea for virtually each funding that I’ve, that may’ve been a greater technique. I imply, it’s fantastic the way in which it’s, however it will’ve been a greater technique.

Steve Chen (11:01):

Proper. Yeah. It’s fascinating. It’s a must to be, not need to, however I feel individuals are getting much more intentional and searching farther forward and considering extra strategically about their cash now’s they get smarter about it. And should you look ahead and also you’re like, oh yeah, I might need decrease revenue or be in numerous tax brackets, how does that have an effect on the conversions I can do and different tax results for my life? After which doing, we now have some people which might be doing 10 years or they’ve 15 years of Roth conversions deliberate out. They are surely serious about this tremendous deeply. However

Andrea Solarz (11:37):

I feel there’s a number of misinformation and hype on the market about Roth conversions. So the place individuals find yourself making conversions and overpaying their taxes, it is mindless that now that in case your tax charge is larger, it’s finest in the long term when you’ll be able to see, but when I don’t do it, then I’m paying all this a a lot larger variety of taxes. However in actuality, it’s the identical should you’re in the identical tax bracket in both interval. The web quantity that you’ve got get within the account after tax is similar. It confuses lots of people.

Steve Chen (12:21):

I feel some individuals additionally give it some thought for his or her property planning and stuff like that as properly. What we’re beginning to see is individuals are trying by way of their lives into their heirs lives and being like, oh, what are the tax brackets of the place the cash’s going? Which

Andrea Solarz (12:34):

Is what you actually need to do with these conversions, as a result of that’s when many of the payoff typically is.

Steve Chen (12:41):

Precisely. So what are a few of the different sources that, I do know that you simply’re a member of the bolding neighborhood, which we recognize, however I feel additionally that you simply’ve checked out Rob Berger and a few of the people. Who’re a few of the influencers that you simply’ve discovered from?

Andrea Solarz (12:56):

He’s a giant one. His movies are very accessible, and he’s fairly simple form of presenter. And naturally, now I’m not going to have the ability to consider any names, however Kitsis and Piper, these sort form of people. I

Steve Chen (13:15):

Assume you talked about Christine Bens as spoken.

Andrea Solarz (13:17):

Oh, yeah, yeah, yeah. She’s nice. I’ve bought her e book. She’s bought nice e book out on retirement that was printed final 12 months.

Steve Chen (13:26):

Yeah, no, she’s a improbable useful resource and I feel a great spokesperson for Morningstar, however only a massive presence within the on-line and monetary literacy world

Andrea Solarz (13:36):

For positive. Yeah. Yeah. Very extremely revered. And there’s one other Fb group that I belong to that I’m fairly lively in and has really overlapping members with the Daring Group.

Steve Chen (13:51):

Is that Andy Panko? I do know that he has a giant form of retirement planning schooling taxes. He’s very tax targeted.

Andrea Solarz (13:57):

Yeah, yeah, yeah. He’s very, very good and simple to know. That places a number of good data on the market too.

Steve Chen (14:06):

Yeah, he’s supposed to return on our podcast subsequent week or within the subsequent couple weeks, so I’m trying ahead to having him on and riffing with him about what he’s actually leaning into. However yeah, it’s fairly superb when individuals are in a position to construct these complete communities and these complete audiences, these people are simply on the market doing this in a really natural manner, which is form of

Andrea Solarz (14:25):

Cool to see. Yeah, yeah. It’s a extremely nice contribution when individuals are sharing their information, sharing information. It’s free to share information, though you too can cost for it, so it’s very nice. Would individuals share it in a really giving manner.

Steve Chen (14:44):

Yeah. When it comes to your personal planning, are you able to simply share a bit about how you employ Boldin and what you discover useful about it?

Andrea Solarz (14:57):

Yeah. Properly, I signed up for it or I’d first heard about it, I assume possibly two years in the past, and I feel I will need to have signed up for a free account and type of checked out it after which simply fully ignored it and forgot about it. After which I feel possibly there was a sale or one thing. It’s like, oh, I ought to have a look at that Boldin factor once more. So I signed up and by the point I entered all of my data, it was simply this large revelation to me that I really was in good monetary form. I’ve been self-employed for many of my profession, and so my revenue has been very sporadic. I established a SAP once I type of formally went, however I didn’t put a lot cash in it as a result of I actually wasn’t making a lot cash. So it was actually the retirement financial savings that I had acquired whereas I had common jobs like 20, 30 years in the past. That fashioned the first foundation for my retirement financial savings, plus these investments, a few of which labored out and a few of them didn’t as properly, that in my brokerage account, that truly put me in good condition. So it was such a revelation to see that, and that moved me then to go forward and take social safety, get my social safety going and resolve, okay, when individuals ask, now I’m simply going to say I’m retired.

(16:33):

Yeah, yeah. And I had sufficient executed to my mortgage, which lastly after 35 years, I paid off my mortgage. In order that made my residing bills so much much less, too daring, actually had an enormous, large affect and the place I’m now.

Steve Chen (16:53):

Good. So that you’re in a position to, was it that you might see every thing in a single place? I imply, I’m not making an attempt to make this a promotional daring, I’m simply form of curious what the unlock was, or is it that you might see all of your revenue?

Andrea Solarz (17:08):

It was, I feel that translation from financial savings to revenue that, oh, it. It’s not like I’ve a lot I, once I examine myself to a number of the individuals which might be in these teams on-line, I’m clearly within the backside quarter or no matter when it comes to what I’ve, but it surely’s a lot, it will be troublesome for me with my spending patterns to ever run out of cash. Even with touring now, planning a few very good journeys and beginning to spend more cash on and giving some to buddies, it was only a actual revelation that this cash that’s for it that I saved for retirement. I imply, virtually my whole life I’ve been saving for retirement. You

Steve Chen (18:01):

Can now spend it.

Andrea Solarz (18:04):

Yeah, I can now spend it in a planful, considerate manner. I’m not shopping for a yacht or something, but it surely was a shock. I dunno why it was a shock, but it surely was extra of a revelation than a shock.

Steve Chen (18:23):

Properly, that’s superior. I imply, that may be a massive a part of it. I feel for thus many individuals, we’re so oriented round saving cash and investing it and constructing wealth that the thoughts shift of, okay, properly both I need to or I ought to begin spending it. After which having the license to spend to really feel prefer it’s okay to spend and it’s good to make use of. The cash is a vital unlock for lots of oldsters.

Andrea Solarz (18:52):

Yeah, it’s breaking a behavior. Habits are onerous to interrupt. You’ll be able to’t simply say, properly, look, I’m going to give up smoking or I’m going to cease. No matter. Habits are onerous to interrupt. It’s a must to work at breaking a behavior.

Steve Chen (19:04):

Yeah, that’s an effective way to place it. It’s fascinating. Yeah. Properly, I’m glad that you simply captured the, you probably did all good issues constructing wealth after which additionally had the time out there versus timing the market, which is essential. And I’m glad that you simply’re in a position to shift gears and embrace the power to spend cash and hopefully take pleasure in it. It’s fascinating. You talked about you’re additionally, you’re giving it to a few of your mates. Is that a part of your plan otherwise you’re simply doing,

Andrea Solarz (19:41):

So I now have this assured revenue, which is social safety, and my retirement funds are with TIA craft. So I annuitized just a little little bit of that cash, in order that kinds my assured revenue, after which I’ve now redirected dividends to my checking account as a substitute of reinvesting them with most of my accounts so as to add just a little more money. So my vow is, okay, it’s a must to spend all of that cash. You’ll be able to’t save any cash from that. That cash is all to spend. And in addition once I paid off my mortgage final 12 months, I mentioned, properly, I’m going to present away that cash now for the following 12 months. I’m going to take what was going to my mortgage, mortgage and curiosity, and I’m going to eliminate that cash and have it do good for no matter. I’ve had a few buddies who’ve had fallen into dangerous circumstances and just a little cash could make such a giant distinction in anyone’s life once they don’t have it and simply bridging them, getting by way of a troublesome time, no matter. So I’ve executed issues like that to some causes and stuff, no matter. It’s good to have the ability to simply give it freely.

Steve Chen (21:00):

Positive. That’s tremendous beneficiant of you and tremendous good. I feel that for lots of oldsters, they get a number of satisfaction from service or serving to different individuals. I feel should you have a look at individuals, what makes them the happiest helps individuals doing work for issues which might be greater than themselves. It’s not shopping for issues. Folks really feel like, oh, I imply it’s experiences, however should you have a look at somebody who saves a bunch of cash and buys a Porsche, they’re pleased for a short second of time, after which they’re like, okay, properly that was no matter. There’s a hedonic adaption. They get used to it and so they’re like, okay, now I’m used to my hair or no matter. In order that’s cool. I additionally love listening to that you simply one other finest practices, take into consideration your will need to have spending after which fill that with assured revenue sources like social safety, possibly annuitizing a few of it, so that you’re like, okay, I don’t have to fret about it. Or it sounds such as you’re over, you need to spend this a lot cash after which you have got different issues which might be out there and may maintain getting capturing excessive returns.

Andrea Solarz (22:03):

Yeah, I imply, I haven’t dipped into any of my retirement financial savings, which I’m going to need to do finally. So I have to suppose extra about, okay, how do I exploit that cash? However for me, and folks have completely different attitudes about this, it’s like, no, it’s extra essential to concentrate on whole return and no matter. That’s fantastic. For me, I feel particularly partly since my revenue was so variable and insecure throughout a lot of my working life, it’s very nice to simply know that there’s cash coming into my account each month and it’s there it doesn’t matter what. And it doesn’t matter what the market does, I might lose half my financial savings, 75% of my financial savings, and that cash would nonetheless be coming into my account and supporting me.

Steve Chen (22:51):

Those who have pensions are tremendous pleased individuals, a minimum of. Are they very, I feel they’re tremendous safe. And also you hear this from those who have pensions. You’ve constructed your personal, which is cool. And I feel extra individuals are going to do what you’re doing, which is like how do they set up that retirement paycheck and the way do they assemble it? And so it’s cool. And social safety is clearly a key a part of it, however Annuitizing can, and you’ve got it by way of tia, however some people simply, they’ll purchase a spi, a single premium quick annuity, or they’ll have a deferred annuity that they’re planning on. One other technique some individuals do is they will hedge longevity. They purchase longevity insurance coverage by shopping for planning for, okay, I’m going to purchase an annuity that kicks in at 85 within the occasion that I’m nonetheless going sturdy, I’ll receives a commission. After which they’ve an outlined window to create revenue earlier than that. So it modifications the dynamic. There’s these various things that folks can do, and one of many issues we need to do is make that simpler for individuals to see and do.

Andrea Solarz (23:56):

Yeah. And annuities have a really dangerous title for good motive as a result of individuals get sucked into them with out them being actually the appropriate automobile for them by insurance coverage salesmen. In order that type of blacks lists all of them when there are literally excellent choices that make sense for individuals. So it’s essential to essentially perceive what the choices are and what the implications of them are for you

Steve Chen (24:18):

100%. And so they’re additionally like, I completely agree with that evaluation. And there’s completely different flavors. There’s easier variations like quick and stuck annuities which might be fairly vanilla and the charges will not be that prime. There’s additionally principally the extra advanced they get with any monetary product, the worst. It’s sometimes, and should you can’t perceive it, that’s typically not, that’s often a foul sign, however assured revenue is superior to have and I’m glad you’re getting some and having fun with it. Alright, properly, another bits of encouragement or ideas that you’d have for folk which might be on this journey to both saving cash, you have got executed a great job of your complete life and investing it or make the transition to retirement?

Andrea Solarz (25:09):

I feel for individuals beginning out, I’d say that in some methods crucial years are the early years. That cash that you simply save early on goes to work the toughest and the longest for you and repay essentially the most. I imply, you can begin at any time, however should you can handle to get began early, then do it.

Steve Chen (25:28):

Yeah, 100%. There’s so fascinating charts that present the sum of money it’s a must to save 30 years out, 20 years out, it’s a must to save a lot more cash later versus saving just a little and getting the magic of compounding going for you in a giant manner. Alright, superior. So another massive plans for you? It sounds such as you bought a pair journeys arising. Any highlights you need to share?

Andrea Solarz (25:56):

Sure. I took a visit to China in Might with this culinary journey group and that was fabulous. And so they’ve bought one other journey to Turkey in March and I’m going to go along with that, go on that. And I’m going to be touring with a buddy to Spain and Italy in November, so I’m positively getting some, I assume they don’t stamp your passport anymore, however some digital stamps in my passport is a part of the plan for proper now.

Steve Chen (26:29):

Some locations stamp your passport, I feel it was simply within the Dominican Republic, and so they had been stamping our passport, which is cool. I bear in mind you all the time used to need to get tons of stamps round Europe or one thing. That’s cool. Superior. Properly, Andrea, I actually recognize you taking the time to share your story about the way you’ve each amassed and now you’re managing your plan as you go ahead. I hope that your travels are superior and secure. I’m positive it’ll be nice. And yeah, no, for the oldsters listening, hopefully you bought some good classes in right here. I feel it’s all the time nice to form of discuss with people in our neighborhood. Yeah, so Andrea, thanks for being a part of our neighborhood and contributing again. Actually recognize it.

Andrea Solarz (27:13):

Yeah, Annette, I’m glad to be right here. One different factor I’ll point out, I feel that I, single lady, I don’t have kids. I feel so typically the those who we see offered are a part of a pair, they’ve kids. So I feel that planning must be just a little completely different if you’re a single person who you might want to, as a result of it’s a must to take note of all of it your self. You’re the one one who’s managing that. So simply say, yeah, you are able to do it. You’ll be able to nonetheless do it.

Steve Chen (27:44):

Yeah. Properly, and I feel one actuality is is that girls outlive males and so they are inclined to earn much less, though it’s altering. It’s altering fairly shortly. Girls are 60% of school college students now, and I feel the revenue disparity is altering fairly quickly. I imply, they’re positively filling up the skilled ranks and since ladies are going to finish up with nearly all of the cash on the planet, interval, properly, most likely partially due to the change we talked about, but additionally demographics, outliving and inheriting the cash, and that is the one a part of it. Lots of them will find yourself residing a single life later of their years and so they’re going to be doubtlessly managing it themselves anyway. So I do know that so much. One factor dynamic we see is in a number of households or {couples}, a number of households, there’s somebody that’s actually into it and so they’re just like the banker, they know what’s occurring, and the opposite companion doesn’t essentially know as a lot. And they also’re actually making an attempt to suppose by way of how do they both ramp them up and get them financially literate and or get them some assist in order that it’s totally actually trusted and full fiduciary. In order that they’ll proceed to make good selections. And throughout generations too, that applies as properly. Okay. Properly look, Andrea, I actually recognize it and we’ll get this up and operating and we’ll see what individuals need to say. I’m positive they’ll be excited to listen to what you’ve discovered over the course of your life.

Andrea Solarz (29:19):

Sounds good.

Steve Chen (29:20):

Thanks for becoming a member of us. Respect it.