Return to Transcripts main page

American Morning

'Bouncing Back': Retired in Name Only

Aired May 09, 2003 - 07:44   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


HEIDI COLLINS, CNN ANCHOR: This morning in the final installment of our "Bouncing Back" series: Retired in name only. A recent survey found that more than four million Americans over the age of 65 are now looking for work. The sinking stock market and record low dividends on investments are forcing many retirees to re-enter the work force.
Among them is Nancy Johnson. She is with us from Boston this morning to tell us her story.

Nancy, thanks for being here. You have been out of work since 1988 -- or retired, I should say, since 1988. Why did you go back?

NANCY JOHNSON, RETURNED TO WORK AFTER RETIRING: Why did I go back? Well, we lost a large amount of income, and, most importantly, we had our health insurance cancelled. So, I had to go back to work so that we could get health insurance coverage and a little income.

COLLINS: Was that a disappointment to you to have to go back to work?

JOHNSON: At one level it was a real disappointment, because I had established a totally different life that I do miss today.

COLLINS: And we're seeing a little bit of that on the screen right now, some grandkids, I believe, a beautiful family that have you there.

JOHNSON: Thank you.

COLLINS: What advice would you have, Nancy, for other people who are approaching retirement age maybe right now?

JOHNSON: To be sure that they do have -- that the plans they have made for their future are actually going to work. We had good plans made, and a lot of it fell through, which we didn't anticipate at all. And I think it's a different world out there, and you have to look at it differently now.

COLLINS: What would you have done differently, do you think?

JOHNSON: We might have taken some of the money we had left. My husband worked at Polaroid, and a lot of our money was invested in the stock there, and we could have taken it when he retired. And if we had known, we probably would have done that, too. And just be more careful with your investments.

COLLINS: Are there any surprises, though, now that you are back in the library, right?

JOHNSON: Yes.

COLLINS: Any surprises? That you didn't expect maybe to enjoy the work?

JOHNSON: Well, I turned the job down, to start with, in September. And then when everything fell apart in October, I went back and said, if you would like me to come back -- unfortunately, the woman who took the job left suddenly. And I said, I'd be willing to come back. I hadn't anticipated doing that. I told them in September if you find someone else who you would like to do the job, let them have it instead of me, but that changed incredibly.

COLLINS: Are you happy?

JOHNSON: I am happy. I enjoy the work. I really love working with kids, so that makes it good. I miss a great deal of what I used to do, and someday I'll go back to it. And I will return to most of it for the summer, but I'll have to go back to work again in September.

COLLINS: Nancy Johnson, thanks so much for sharing your story with us this morning. We do appreciate it.

JOHNSON: You'll welcome.

So, what should we do to be preparing for retirement?

With us now is David Bach. He's a financial expert and author of "Smart Couples Finish Rich."

And, David, as we said in the introduction to this segment, there are four million Americans over the age of 65 who are looking for work. What is happening here? Is it poor financial planning?

DAVID BACH, AUTHOR, "SMART COUPLES FINISH RICH": It's a combination of things. First of all, what's really hurting a lot of these people, obviously they lost a ton of money in the stock market, and people have seen their retirement nest eggs drop in half. And on average, that's just wiping out what they expected would be a great retirement.

But the second thing, Heidi, that is really hurting them is the cost of medical bills. We're seeing medical costs go up at 15 percent a year. And when people created their financial plans, they did not plan to see their medical expenses go from maybe $100 a month to now $500, $600, in some cases $1,000 a month. They just were not prepared.

COLLINS: So, let's talk about some tips, so that people can walk away from this today and then actively be able to do something about it. Where do we start?

BACH: The first thing you have to do as a couple, but even if you're not married, you need to be spending at least a couple of hours a month working on your financial plan. I call it having a money date, especially if you're married. The average person in America spends, they say, 53 days of their time a year watching TV. We tell Americans just spend two hours a month reading more about, you know, retirement planning, looking at your expenses, seeing where the money is going and doing better planning. But you need to have a money date. Take aside two hours a month to do that.

COLLINS: All right. What about a money coach?

BACH: You need to be getting professional financial advice, and what that professional coach should be doing is, No. 1, really looking at how much money you spend. Take all of the amount of money you spend, but not just the last month, look at an entire year of expenses, go through those expenses.

The second thing, look at what do you want to do out of your first year out of retirement and your second year out of retirement. What is that really going to cost?

And the third thing you really need to look at is your social security earnings benefit statements. How much money will you be getting from social security? And how much of your retirement will that be covering? For most retirees, it's less than 15 percent of what they need.

COLLINS: Wow! All right, David Bach, thanks so much for your advice on all of this today.

BACH: Thank you.

COLLINS: A lot to think about, that is sure.

"Smart Couples Finish Rich" is your book, and again, we appreciate your time.

BACH: Thank you, Heidi.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.







Aired May 9, 2003 - 07:44   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
HEIDI COLLINS, CNN ANCHOR: This morning in the final installment of our "Bouncing Back" series: Retired in name only. A recent survey found that more than four million Americans over the age of 65 are now looking for work. The sinking stock market and record low dividends on investments are forcing many retirees to re-enter the work force.
Among them is Nancy Johnson. She is with us from Boston this morning to tell us her story.

Nancy, thanks for being here. You have been out of work since 1988 -- or retired, I should say, since 1988. Why did you go back?

NANCY JOHNSON, RETURNED TO WORK AFTER RETIRING: Why did I go back? Well, we lost a large amount of income, and, most importantly, we had our health insurance cancelled. So, I had to go back to work so that we could get health insurance coverage and a little income.

COLLINS: Was that a disappointment to you to have to go back to work?

JOHNSON: At one level it was a real disappointment, because I had established a totally different life that I do miss today.

COLLINS: And we're seeing a little bit of that on the screen right now, some grandkids, I believe, a beautiful family that have you there.

JOHNSON: Thank you.

COLLINS: What advice would you have, Nancy, for other people who are approaching retirement age maybe right now?

JOHNSON: To be sure that they do have -- that the plans they have made for their future are actually going to work. We had good plans made, and a lot of it fell through, which we didn't anticipate at all. And I think it's a different world out there, and you have to look at it differently now.

COLLINS: What would you have done differently, do you think?

JOHNSON: We might have taken some of the money we had left. My husband worked at Polaroid, and a lot of our money was invested in the stock there, and we could have taken it when he retired. And if we had known, we probably would have done that, too. And just be more careful with your investments.

COLLINS: Are there any surprises, though, now that you are back in the library, right?

JOHNSON: Yes.

COLLINS: Any surprises? That you didn't expect maybe to enjoy the work?

JOHNSON: Well, I turned the job down, to start with, in September. And then when everything fell apart in October, I went back and said, if you would like me to come back -- unfortunately, the woman who took the job left suddenly. And I said, I'd be willing to come back. I hadn't anticipated doing that. I told them in September if you find someone else who you would like to do the job, let them have it instead of me, but that changed incredibly.

COLLINS: Are you happy?

JOHNSON: I am happy. I enjoy the work. I really love working with kids, so that makes it good. I miss a great deal of what I used to do, and someday I'll go back to it. And I will return to most of it for the summer, but I'll have to go back to work again in September.

COLLINS: Nancy Johnson, thanks so much for sharing your story with us this morning. We do appreciate it.

JOHNSON: You'll welcome.

So, what should we do to be preparing for retirement?

With us now is David Bach. He's a financial expert and author of "Smart Couples Finish Rich."

And, David, as we said in the introduction to this segment, there are four million Americans over the age of 65 who are looking for work. What is happening here? Is it poor financial planning?

DAVID BACH, AUTHOR, "SMART COUPLES FINISH RICH": It's a combination of things. First of all, what's really hurting a lot of these people, obviously they lost a ton of money in the stock market, and people have seen their retirement nest eggs drop in half. And on average, that's just wiping out what they expected would be a great retirement.

But the second thing, Heidi, that is really hurting them is the cost of medical bills. We're seeing medical costs go up at 15 percent a year. And when people created their financial plans, they did not plan to see their medical expenses go from maybe $100 a month to now $500, $600, in some cases $1,000 a month. They just were not prepared.

COLLINS: So, let's talk about some tips, so that people can walk away from this today and then actively be able to do something about it. Where do we start?

BACH: The first thing you have to do as a couple, but even if you're not married, you need to be spending at least a couple of hours a month working on your financial plan. I call it having a money date, especially if you're married. The average person in America spends, they say, 53 days of their time a year watching TV. We tell Americans just spend two hours a month reading more about, you know, retirement planning, looking at your expenses, seeing where the money is going and doing better planning. But you need to have a money date. Take aside two hours a month to do that.

COLLINS: All right. What about a money coach?

BACH: You need to be getting professional financial advice, and what that professional coach should be doing is, No. 1, really looking at how much money you spend. Take all of the amount of money you spend, but not just the last month, look at an entire year of expenses, go through those expenses.

The second thing, look at what do you want to do out of your first year out of retirement and your second year out of retirement. What is that really going to cost?

And the third thing you really need to look at is your social security earnings benefit statements. How much money will you be getting from social security? And how much of your retirement will that be covering? For most retirees, it's less than 15 percent of what they need.

COLLINS: Wow! All right, David Bach, thanks so much for your advice on all of this today.

BACH: Thank you.

COLLINS: A lot to think about, that is sure.

"Smart Couples Finish Rich" is your book, and again, we appreciate your time.

BACH: Thank you, Heidi.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.