Investing in your company plan is easy. The money comes right out of your check, and the investments are automatic. It’s the road, Alvin Franks chose for more than 20 years. His conservative plan for investing worked until a divorce and company changes forced him to change directions and financially start over.
Starting over at age 50
Franks grew up in the Midwest, and spent 24 years as a maintenance manager for a manufacturing company. Working for the same company for a long time, Franks is fully vested in the pension plan. He also has a 401(k) which will provide him the balance he needs when he retires. Franks set his life and retirement plans on cruise control early on in his career.
Frank loves to cruise down the road in his RV or motorcycle.
“We work to live. We don’t live to work. I do have a passion for what I do. I like working, but I like to enjoy life,” Franks said.
Like most people, unexpected speed bumps detoured Franks’ financial plans.
His company froze its pension plan limiting growth. Plus, the company offered long-standing employees an early retirement buyout. With more years to work, Franks faced a crossroad. Should he take an early retirement and start over with another company at age 50 or stay the course? Both choices seemed risky.
On top of the company’s changes, Franks faced his own setbacks. After 20 years, his marriage ended in divorce. Devastation set in. On top of losing his life partner, he says he lost more than half of his 401(k). Still years from retirement, the 50-year-old started over financially and emotionally.
“At 50-years-old, it’s too late to make up my 401(k),” Franks said.
The unexpected speed bumps in life forced Franks to change financial directions. So close to retirement, Franks knew he needed to take the right steps to avoid even deeper financial setbacks.
Retirement planning after divorce
Financial risks are not part of Franks’ financial plan. He’s a conservative investor. He follows the company investment strategy. His portfolio invested in the one-size fits all retirement plan based on his retirement age.
Creating a new retirement strategy is challenging and risky for anyone. However, as an avid biker Frank knows risks lead to rewards. He faces the risk every time he hops on his bike and rides the open road.
“You are more attentive to what’s going on. You can smell stuff you can’t smell in a car,” Franks said. “Riding in pine trees in Colorado in the summer is an incredible sensory experience because you smell that fresh pine.”
With much of his life as he knew it in his rear view mirror, Franks hired a fee-only financial adviser to manage his money. It’s more money out of his pocket, which is tough to accept after losing half your 401(k). Franks knew he had to start over, and he knew investing on his own would not give him the best chance at rebuilding his retirement.
“I just realized I didn’t have the time or passion to take care of it,” Franks said.
Franks relied on referrals from friends, and found a trusted adviser with a proven background. He pays a flat fee every year for the certified financial planner to manage his money.
He pays someone else to watch the market and his retirement funds for him.
It allows Franks to focus on his strengths. He manages projects at his manufacturing plant by day and plans his next road trip at night.
“I’ll probably work until I die, because I enjoy work. But, I want to make sure I have the ability to do things like travel,” Franks said.