Real Retirement Stories: Andrea Solarz

This episode is brought to you by the Bolden financial planning platform, formerly New Retirement Create a financial plan for free@bolden.com all right.

Hey, folks, this is Steve Chen from Bolden. I am joined by Andrea Solars today. She's a member of our community. And this is another recording of folks for our Spotlight series. And just a quick intro. So Andrea's joining us from Arlington, Virginia, very close to Washington, D.C. and it's been a member of our community. And we're just going to dive in and kind of talk about her story, you know, see what lessons there are to be shared. So with that, Andrea, welcome to our show.

Great to be here.

Yeah. No, I appreciate you taking the time. I would love if you could give just kind of a quick background on kind of your journey to financial independence and, you know, how you got, you know, realized the importance of financial literacy and how you kind of started saving and got into planning and kind of, you know, we'll go from there.

Well, that story really begins when I was a child. So this is the long, there's a long story and a short story, but I really was a saver starting as a child. I can remember, you know, we would have, we had a Bank of America passbook, and at school, you would take your dime, you know, to school, and it would get deposited into your bank of America savings account. So I started saving that early. And also, you know, my parents did something really interesting when we were young, which gave us a budget, I mean, gave us money that we could budget ourselves for whatever our needs were, you know, for our entertainment, if we wanted extra clothes and so on. So we had to manage that. So I learned to really kind of handle money and think about it as something that I could use to save up for something important that I could use, you know, to think about managing daily expenses. So that, that put me on a good path moving forward.

Nice. And so, like, this idea of like an allowance, essentially, or was.

Wasn't an allowance like, oh, you know, if you, if you clean the bathroom, then you get an allowance. It, it was more like a stipend, you know, that, that you could use. You know, like, you get with a job, you know, you're, you get a standard amount of money and you have to use it out how to cover the expenses that you want to cover with it and need to cover.

Yeah, totally. That's super important. That's, that's interesting. And then how about investing? Did you start. So you were saving early on. How did you, like, learn about investing and how did that happen?

I can thank my parents for that too. For my 13th birthday, I got three shares of holiday in stock.

Okay.

And my dad was not a stock investor. He was kind of a, you know, buy high, sell low kind of guy because he would panic and they can't do this anymore and, and get out of things. But made me, it helped me start thinking about, well, this is an option. You can invest in things. You know, eventually, you know, it was bought out. I don't have any shares from, from that left. But once I finished up graduate school, I also opened up an account with the stockbroker and started investing in some stocks. And then eventually mut months as well.

Okay, interesting. So why, why do you think it was Holiday Inn, like that particular company?

I have absolutely no idea. You know, I think in part it's, it was a name that people knew at the time. You know, maybe he stayed at Holiday Inns on business travel and was familiar with it. I really, I can't say it's, it's.

Interesting that you recognized your father's behavior of like, retail behavior of like buy high and sell low. Did you see that at the time or that you just realized that later?

Oh, you know, I think by the time I was in high school, I realized that, you know, that it just, you know, just didn't fit in with his temperament, you know, to, you know, to focus on investing like that. But they wanted to give me a good lesson.

Yeah. Did you share that feedback with your father?

I don't think I did.

That's like the single most valuable thing that financial advisors, I think this is my opinion, bring to their clients, which is they help them manage their own behavior and recognize and hopefully provide like a shock absorber to that emotional response to the market. Getting excited and then putting your money at the top and then freaking out and selling it at the bottom.

Yeah, it was still, I mean, real, that realization was still a really good lesson to me though, because I, I, I didn't do that. You know, I always held on.

Right, right, right. Yeah. So it's good that, Were you reading any investing books?

No, no. But you know, I, I joined the American association for Individual Investors and went to some of their meetings and so on. So, you know, I was in my late 20s, early 30s when I was doing that, I guess so.

I mean, that's, we've talked to those guys. It's interesting. Like, so you're kind of self educated around financial literacy where you were given so great. Your parents helped you with this budgeting idea. Intrusive idea of investing to you. But then you must have had some interest. You've obviously had interest because you're out there seeking out these organizations and things like that.

Yeah, yeah. I can't really because it's been quite a few years since then. So I don't remember specifically how I started that, but I had a sense pretty early that I needed to save for retirement, that there was an end game here that was retirement. And so even with my brokerage investments, I've just held on to those. I have very, very rarely sold any of them because in my head they were for retirement rather than right.

How did you learn about the hulb. The whole buy and hold, which is the right way to do it, is that self educated again? And we also. Were you index investing? Were you. You said you meant you started buying mutual funds.

You know, they, I think I, you know, like would read about them in Kipling jurors or newspaper articles and things like that. So, you know, at the time they were, you know, like the Janus International Fund. And you know, I did the S&P 500. I did. You know, it's like I look back, you know, growth fund here. I look back now and it's like, oh God, now I've got to do something with all of these little dribs and drabs and different pockets of the market. But you know, it was intentional at the time to get basically to diversify into different types of investments.

Well, you're, you're doing all the good things. You're, you know, saving, budgeting, saving and investing and diversifying and managing your own behavior. That's awesome. Maybe you should have been a financial advisor.

Well, it also helps to overcome some of the bad decisions along the way too. So as long as you're making a lot of good ones, your turn works out okay.

100%. Well, what are some of the. Do you have any lessons you learned along the way or mistakes that you made that you wish you could take back or that you would share with other people?

Here's one. So a friend had or had an association with a company that was coming out with an ipo. So we all had the chance to get in on it, which was great. Which I did and invested some money in that and it went down to like, you know, 97 cents a share. And I bought some more when it was that level. And so all in all, I put in maybe $1200. Then during COVID that investment went up in value to like over a hundred thousand dollars.

Wow. 100x or whatever. Or whatever. 50, you know, whatever. 670x.

Anyway, yeah, so I thought this is great. You know, I'm going to hold on, it's going to go up even higher. And it didn't, it went down. It's now worth like $20,000. So. So you can, you can hold for too long. You know, there's a lesson there too. It's like you have to think about, you know, take advantage of, of where it is. You know, don't, don't be greedy and think that it, it's gonna get even better. You know, it's still like a huge, you know, increase over what I invested. But it's, it could have been a lot better. Yeah, for sure.

Well, it's hard. I mean you have these concentrated with individual equities or any individual investment. I mean, you've really got a big concentration risk and you know, I mean, you'll hear both sides of it. People are like, oh, if you have, I mean there's always survivorship bias, right? So people who have had Apple are like, well yeah, I just going up and then I held on and hold your winners. That's one thing people say. But also you end up with this massive concentration risk.

Concentration, yeah.

And then, you know, the argument for rebalancing is that you're, you know, things that are winning and getting huge, you sell off some of that and put it into things that are less well, doing less well. And then, but yeah, so you'll lower your volatility rebalancing, but improve your probability of having a positive, long term, positive outcome. So interesting. Any other big lessons that you've learned along the way?

I would have started thinking specifically about what it means to manage my money in retirement and to move towards retirement. Things like Roth conversions that, you know, there were no Roth accounts when I started investing in retirement, you know, with employers, that was never an option. When I was, you know, had an employer plan and I did learn about them, you know, lots of online reading and so on and did a couple of conversions at a time when it was the right time to do it, which is when you are no longer in a higher tax bracket while you're employed, but before you start Social Security. So that's sort of the, the golden point for doing those and that is when I did them. But if I, if I thought more planfully, I would have started a little earlier so that I could have gotten, gotten more in and also taking advantage of capital gains, zero tax rates, you know, and I, I did that One year. But it's like, oh man, if I'd realized that earlier, I could have reset the basis for pract, you know, investment that I have, that would have been a better, better strategy. I mean, it's fine the way it is, but it would have been a better strategy, right?

Yeah, it's, it's interesting. You have to be, not have to, but like people, I think people are getting a lot more intentional and like looking farther ahead and thinking more strategically about their money now as they, they get smarter about it and they, you know, if you look forward and you're like, oh, yeah, I might have lower income or, you know, be in different tax brackets, how does that affect, you know, the conversions I can do and other tax effects for my business, you know, for my life. And then doing like, we have some folks that are doing like 10 years or they have 15 years of like Roth conversions planned out. They really are thinking, like, thinking about this super deeply and.

Yeah, but I think there's, there is a lot of misinformation and sort of hype out there about Roth conversion. So, you know, where people end up making conversions and overpaying their taxes into the. It's like it makes no sense that if you pay now, you know, that if your tax rate is higher, you know, it's best in the long run when you can see, you know, but if I don't do it, then I'm paying all this a much higher number of taxes. But in reality it's the same if you're, if your tax, if you're in the same tax bracket in either period, the net amount that you have get in the account after tax is the same. So it's, it confuses a lot of people.

Right. I think some people also think about it from if. For their estate planning and stuff like that as well. What we're starting to see is people are looking through their, their lives, into their heirs lives and being like, oh, what are the tax brackets of where the money's going?

Yeah, which, which is what you really have to do with the, with those conversions. Yeah, because that's when most of the payoff often is.

Exactly. So what are some of the other resources that. I know that you're a member of the bolding community, which we appreciate. But I, I think you've like, like looked at Rob Berger and some of the other folks who are some of the kind of influencers that you've kind of learned from.

Yeah, he's, he's a big one. His, you know, his videos are very Accessible, and he's, you know, pretty straightforward kind of presenter. Yeah. And of course, now I'm not going to be able to think of any names, but, you know, like Kitsis and Piper, those kind of kind of folks, you know.

I think you mentioned Christine Benz.

Oh, yeah, yeah, yeah. She's great. I've got her book. She's got a great book out of. On Retirement that was published last year.

Yep. Yeah, no, she's a. She's a fantastic resource and I think good spokesperson for Morningstar, but, you know, just a big presence in the online and financial literacy world.

Yeah, yeah, Very highly respected. And there's another Facebook group that I belong to that I'm pretty active in and has actually overlapping members with the Bold and Group.

Yeah, is that Andy Pankos? I know that he has a big kind of retirement planning, education, taxes. He's very tax focused.

Yeah, yeah, yeah, yeah. He's very, very smart and easy to understand. That puts a lot of good information out there, too.

Yeah. He's supposed to come on our podcast next week, so. Or in the next couple weeks. So I'm looking forward to having him on and kind of riffing with him about what he's really leaning into. But, yeah, it's pretty amazing when people are able to build these whole communities and these whole audiences. These individuals are just out there doing this in a very organic way, which is kind of cool.

Yeah, yeah, yeah. It's a real. It's a really great contribution when people are sharing their knowledge. Sharing knowledge is, you know, it's free to share knowledge, although you can also charge for it. So it's really nice when people share it in a very giving way.

Yeah. What would you, in terms of your own planning? Can you just share a bit about how you use Bolden and what you find helpful about it?

Yeah, well, I signed up for it, or I first heard about it, I guess, maybe two years ago, and I think I must have signed up for a free account and sort of looked at it and then just completely ignored it and forgot about it. And then I think maybe there was a sale or something. It's like, oh, I should look at that Bolden thing again. So I signed up and, you know, by the time I, you know, entered all of my information, it was just this huge revelation to me that I actually was in good financial shape. You know, I've. I've been self employed for most of my career, and so my income has been very sporadic. You know, I had. I established the SEP when I, you know, sort of officially Went self employed. But I did not put much money in it because I really wasn't making much money. So it was really the retirement savings that I had acquired while I had regular jobs like 20, 30 years ago that formed the primary basis for my retirement savings. Plus those investments, you know, some of which worked out and some of them didn't as well. That in my brokerage account that actually, you know, put me in good shape. So it was, I, I just, it was such a revelation to see that and, and that moves me then to go ahead and take Social Security, get my Social Security going and, and decide, okay, I, I'm just. When people ask now, I'm just going to say I'm retired, you know, and. Yeah, yeah, yeah. And I, you know, I had enough done to my mortgage, which finally after 35 years I paid off my mortgage so that, you know, made my living expenses a lot less too. Bolden was really, really had a huge, huge influence and where I am now.

Nice. And is that. So you're able to. Was it that you could see everything in one place? I mean, I'm not trying to make this like a promotional bold and I'm just kind of curious like what the unlock was, you know, or is it that you steal your income?

It was, I think that translation from savings to income, you know, that. Oh, I'm not gonna, it's, it's not like I have so much. I mean, if. When I compare myself to a lot of the people that I are, you know, in these groups online, you know, I'm clearly in the bottom quarter or whatever in terms of what I have, but it's plenty, you know, it would be difficult for me with my spending patterns to ever run out of money, you know, even with traveling, you know, now planning a couple of very nice trips and starting to spend more money on myself and giving some to friends, you know, it's, it's, it was just a real revelation that this money that is for it that I saved for retirement. I mean, practically my entire life I've been saving for retirement.

You can now spend it.

Yeah, it's, it's. I can now spend it in a, in a, you know, in a, a planful, thoughtful way. Yeah, I'm not, you know, like buying a yacht or anything, but it's, it was a surprise. It was. I don't know why it was a surprise, but it was more of a revelation than a surprise.

Well, that's awesome. I mean, that is a big part of it. I think so for so many people. We're so oriented around saving money and investing and then kind of like building wealth that the mind shift of. Okay, I, well, I, either I want to or I should start spending it and then having the license to spend, to feel like it's okay to spend and like it's good to use the money is an important unlock for a lot of folks.

Yeah, it's breaking a habit. Habits are hard to break. You know, you can't just say, well, look, I'm going to stop smoking or I'm going to stop, you know, whatever. Habits are hard to break. You have to work at breaking a habit.

Yeah, that's a great way to put it. It's interesting. Yeah. Well, I'm glad that you captured the, you did the, you did a lot of, you did like all, all good things. Building wealth and then also had the time in the market. Right. Versus timing the market, which is key. And, and I'm glad that you're able to shift gears and, you know, embrace the ability to spend money and hopefully enjoy it. It's interesting you mentioned you're also like, you're giving it to some of your friends. Is that like part of your plan or you're just doing that?

So, you know, so, so I now have this guaranteed income, which is Social Security, and my retirement funds are with TIA Creft. So I annuitized a little bit of that money, so that forms my, my guaranteed income. And then I've now redirected dividends to my bank account instead of reinvesting them with most of my accounts, you know, to add a little more cash. So my, my vow is, okay, you have to spend all of that money. You can't save any money from that. That money is all to spend. And also when I paid off my mortgage last year, I said, well, I am, I am going to give away that money now. I'm going to. For the next year, I'm going to take what was going to my retirement to my mortgage, mortgage and interest, and I'm going to get rid of that money and have it do good for whatever, you know. So, you know, I've had a couple of friends who've had fallen into bad circumstances and, you know, a little money can make such a big difference in somebody's life when they don't have it and just, you know, bridging them or getting through a tough time, whatever. So, so I've done things like that and to some causes and stuff, you know, whatever. It's, it's nice to be able to just give it freely.

Sure. That's that's super generous of you and super nice. I think that for a lot of folks, they get a lot of satisfaction from service or helping other people. Like, I think if you look at people, what makes them the happiest is, you know, helping people doing, doing work for things that are bigger than themselves. It's not like the, the, it's not buying things that people feel like, oh, I'm gonna. I mean, it is, it's experiences. But like, if you look at someone who like saves up a bunch of money and buys a Porsche, they're happy for a brief moment of time and then they're like, okay, well that was whatever. There's a hedonic adaption. They get used to it and they're like, okay, now I'm used to my hair or whatever, so that's cool. I also love hearing that you're. Another best practice is think about your must have spending and then fill that with guaranteed income sources like Social Security, maybe annuitizing some of it so you're like, okay, I don't have to worry about it. Or it sounds like you're over. You want to spend this much money and then you have other things that are in the market and can keep capturing higher returns.

Yeah, I mean, I haven't dipped into any of my retirement savings, which I'm going to have to do eventually. I need to think more about, okay, how do I use that money. But for me, and people have different attitudes about this, you know, it's like, no, it's more important, you know, to focus on total, you know, total return and whatever. That's fine for me, I think, especially in part since my, my income was so variable and insecure during much of my working life. It's. It's really nice to just know that there is money coming into my account every month and it's there no matter what. And no matter what the market does, I could lose half my savings, 75% of my savings, and that money would still be coming into my account and supporting me.

People that have pensions are super happy people at least, or they're very. I think they're super secure. And they. That you hear this from people that have pensions, you've built your own, which is cool. And I think more people are going to do what you're doing, which is like, how do they establish that retirement paycheck and how do they construct it? You know, and so it's cool. And Social Security is obviously a key part of it, but like annuitizing can, you know, and you can people, you have it through tia, but some folks just, you know, they'll buy a SPIA single premium immediate annuity, or, you know, they'll. Or they'll have a deferred annuity that they're planning on. Like. Like another strategy some people do is they can hedge longevity. They buy longevity insurance by buying planning for, okay, I'm going to buy an annuity that kicks in at 85. In the event that I'm still going strong, I'll get paid. And then they have a defined window to create income before that. It changes the dynamic. There's these different things that people can do, and one of the things we want to do is make that easier for people to see and do.

Yeah, and annuities have a very bad name for good reason because people get sucked into them without them being really the right vehicle for them by insurance salesmen. So that sort of blackslists all of them when they're actually very good options that make sense for people. So it's important, you know, to really understand what the options are and what the implications of them are for you.

100%. Yeah. And they're also like, I totally agree with that assessment. And there's different flavors. Like, there's simpler versions, right. Like immediate, immediate and fixed annuities, they're pretty vanilla and the fees are not that high. There's also basically, the more complex they get with any financial product, the worse it is typically. And if you can't understand it, that's often not a. That's usually a bad signal. But guaranteed income is awesome to have, and I'm glad you're getting some and enjoying it. All right, well, any other bits of encouragement or thoughts that you would have for folks that are on this journey to either saving money like you have done a good job of your whole life, investing it, or kind of make the transition to retirement.

You know, I think for people starting out, I'd say that, you know, in some ways the most important years are the early years. You know, that that money that you save early on is going to work the hardest and the longest for you and pay off the most. You know, I mean, you can start at any time, but if you can manage to get started early, then do it.

Yeah, 100%. I like. There's so interesting charts that show, like, you know, the amount of money you have to save, you know, 30 years out, 20 years out. Like, you have to save so much more money later versus saving a little and getting, like, the magic of compounding going for you in A big way. All right, awesome. So any other big plans for you as you like? You know, it sounds like you got a couple trips coming up. Are they any highlights you want to share? Yes.

Yeah, I took a trip to China in May with this culinary travel group, and that was. Is fabulous. And they've got another trip to Turkey in March, and I'm going to go with that. Go on that. And I'm going to be traveling with a friend to Spain and, and Italy in November. So I am definitely, you know, getting some. Well, I guess they don't stamp your passport anymore, but some virtual stamps in my passport is a, is a, it's part of, part of the plan for right now.

Some places stamp your passport. I think I was just in the Dominican Republic and they were stamping our passport, which is cool. I remember. Yeah, you always used to want to get, like, tons of stamps around Europe or something. That's cool. Awesome. Well, you know, Andrea, I really appreciate you taking the time to share your story about how you've both accumulated and now you're, you know, managing your plan as you go forward. I hope that your travels are awesome and safe. I'm sure it'll be great. And yeah, no, it's for the folks listening. Hopefully you got some good lessons in here. I think it's always great to kind of talk with our, with folks in our community and. Yeah. So, Andrea, thanks for being part of our community and, you know, contributing back. Really appreciate it.

Yeah, no, I'm glad to be here. One other thing I'll mention, I think that, you know, I am a single woman. I don't have children. So, you know, I think so. So often the people that we see presented are part of a couple. You know, they have children. So I think that, you know, planning needs to be a little different. If you are a single person, you know that you need to. Because you have to pay attention to it all yourself. You're the only one who's, who's managing that. So just say that. Yeah, you can, you can do it. You don't have, you know, you can still do it.

Yeah, well, and I think one reality is, is that, you know, women outlive men and they tend to earn less. Although it's changing. It's changing pretty quickly. Like, women are, you know, 60% of college students now, and I think, think the income disparity is changing pretty rapidly. I mean, they're definitely filling up the professional ranks and because women are going to end up with a majority of the money in the world, period. Well, probably partially because of the change we talked about, but also demographics, outliving and inheriting the money. And so and this is the down, you know, one part of it. Like they, many of them will end up living a single life later in their years and they're going to be essentially managing it themselves anyway. So I know that a lot in our one thing dynamic we see is in a lot of families or couples, you know, one, a lot of families, there's someone that's like really into it and they, they're like the banker, they know what's going on and the other partner doesn't necessarily know as much. And so they're really trying to think through how do they either ramp them up and get them financially literate and, or get them some support so that's fully, really trusted and full fiduciary. So they'll continue to make good choices and across generations too, that applies as well. Okay, well, look, Andrew, I really appreciate it and we'll get this up and running and we'll see what people have to say. I'm sure they'll be excited to hear what you've learned over the course of your life.

Sounds good.

Thanks for joining us. Appreciate it.

It.