UlTImATE SUccESS GUIdEand stopped asking questions and just began to listen. Ms. Browne then
began to tell me her story and why she wanted an appointment with me.
She told me she was 71 years old and divorced a long time ago. She had
worked for a major corporation for over 30 years and had regularly con-
tributed to her company 401k and enjoyed the match from her employer
all those years. By the time she was about to retire she had amassed
close to 1 million dollars in her 401k account. With confidence, she de-
cided to retire in 2007 after slowing seeing her 401k come back to life
after the tech bubble nearly wiped her out in 2001. During that time her
advisor had told her not to panic and that The Stock Market would come
back and he was right.
After 5 years of market recovery from 2003-2007, she had gotten all
of her losses back and more, thanks to her continued contribution as
well as the company 401k match. Needless to say, she felt confident
after talking to her broker in 2007 that she could take 7% withdrawals
from her $1,000,000 401k every year and her principal would remain
the same. She would never have to worry about running out of money.
I could tell from the home she lived in and the car she drove that this
was the retirement she had always hoped for. She was taking close to
$70,000 a year from her 401k and had an additional $20,000 a year
coming from Uncle Sam through social security. With over $90,000 a
year in income, she could meet all of her obligations with the house she
lived in and the car she drove. She even had enough money to take trips
a couple times a year with family and friends. Life was great.
Then something happened that was even worse then what she experi-
enced in 2001 and 2002 from The Stock Market – the Real Estate Bubble
of 2008. In Las Vegas, Nevada where we live, we experienced record
depreciation in the housing market. Home values had dropped by 50%
when it was all said and done. Nobody could escape the Real Estate cor-
rection. Timing is everything and if you bought a home between 2004-
2007 chances are you were completely upside down on your mortgage
by the end of 2008. If that was where the bad news ended, she could
probably live with it. Although she was upside down in her mortgage
she could still afford the payment with the income she had coming in.
Unfortunately during that same year she experienced a huge Double
Whammy. Not only did her home value take a big hit, but as she contin-
ued to receive her monthly statements from her brokerage account, she