Investing for the ages

Priorities change when you reach your 80s and 90s, especially when it comes to finances. Reducing some of life's complications is one of the best things you can do, senior members of the St. Petersburg Times Money Panel say.

By HELEN HUNTLEY

© St. Petersburg Times, published April 1, 2001

Back when Anton Sintich retired in 1974, most people thought retirement meant selling your stocks and heading for the safety of bonds and CDs. Not Sintich, who turned 90 last month.

"I was worried I would outlive my money," said Sintich, whose father lived to be 97. "I went into investments deeply, and they paid out."

Sintich and other members of the St. Petersburg Times Money Panel who are in their 80s and 90s talked with us about their approaches to personal finance. They shared what has worked for them and offered a few snippets of advice for younger retirees, the novices in their 60s and 70s who are still trying to figure things out. Sintich, who lives in South Pasadena, says retirement is an ideal time to delve into investing.

"We're older and we've got more time," he said. Born in Croatia, he arrived in New York in 1929 without a dollar in his pocket, put himself through law school and practiced immigration law in New York.

Reading the Wall Street Journal for investment ideas is still part of his regular routine, along with playing tennis to keep fit. He researches investment possibilities at the public library and watches Wall $treet Week with Louis Rukeyser on Friday nights.

Reducing some of life's complications is the most common concession Money Panel members say they have made as they aged. It is something they highly recommend.

"I made all the mistakes most people make," said 80-year-old Walter Sanford of Largo, who sold real estate for 40 years. "Now I'm trying to simplify things."

For Sanford, simplifying his financial affairs meant selling a commercial building he owned in Largo and consolidating most of his investments at one mutual fund company.

"Anybody that owns real estate has hassles," he said. "It's just a question of how many and whether you're willing to cope with them."

He said he once owned investments with 30 to 40 different mutual fund companies.

"I had some good funds, but this time of year I thought I'd go crazy" with all the tax-related paperwork, he said.

Sanford said he also stopped paying attention to the cacophony of investment gurus and advises other retirees to do the same.

"I've learned you need to ignore most of the information that's available," he said. "Most people take every (investment) letter they can get their hands on and listen to all this advice. The end result is that they are in a state of confusion. Whittle it down to one or two who make good sense."

Frank Corbett, 87, of Holiday, said he kept the two rental houses he owns in New Jersey but reduced the rents as an incentive for the tenants to handle their own repairs and simplify life for him.

"I tell them, "This house rents for $650, but I'll give it to you for $550 if you don't ever ask me to do any repair work,' " he said. "It's worked out pretty good."

Corbett, who sold life insurance for a living, keeps in shape physically playing second base for the Kids and Kubs softball team in St. Petersburg. He said researching stocks is a fitness regimen for his mind.

"I'm in the library all the time," he said. "It gets my brain busy."

These senior members of the Money Panel follow a variety of investment approaches. Some, including Sintich and Corbett, focus on individual stocks and enjoy doing their own research. Others prefer mutual funds, and still others steer clear of the stock market entirely.

Sintich said he likes to buy stock in companies that make things people use, such as consumer products and pharmaceuticals.

"You always have to take your medication if you need it," he said. "That will always be a good thing to invest in."

But Sanford said individual stocks are not right for most people, regardless of age.

"About 95 percent of the people are better off in mutual funds than in individual stock," he said. "If you don't want to do anything at all, just buy the index funds and you'll beat 90 percent of the people anyway."

Some panelists say they reduced or eliminated their exposure to stocks as they grew older.

"I traded all my stocks in for bonds," said Verna Haswig, 91, of Largo. She said she learned about money while managing a large trust during her working career. But she can no longer get around well enough to go to the library for research, and she has not joined the computer age.

"Now I just buy government bonds," she said. "I do everything direct myself through the bank."

She also does her own income tax return.

"I don't need any help with that," she said.

The panelists have been around long enough to remember the stock market crash of 1929, although they were not yet investors themselves.

"Most of us in the neighborhood were poor, and our folks weren't in the market at all," said Frank Vitro, 80, of Safety Harbor. "The people we knew who were involved in the stock market were devastated. They became poor like we were. It was amazing to see that. They moved out of their homes into rental apartments. They couldn't buy new cars anymore."

The experience did not stop Vitro from buying stock during the years he helped build nuclear submarines. But he thinks people in their 70s and 80s should stick with mutual funds and favor fixed income over equity investments.

"People investing in that technology thing thought they would have something that would revolutionize the country, but it didn't work out the way they thought it would," Vitro said. "If you're young, you can just leave it right there and it will come back, but it's going to take some time. An 80-year-old man doesn't have that much time."

He said he still owns stock funds but has been moving more heavily into bank CDs, U.S. savings bonds and Treasury securities.

"Brokers will not push you in the direction of fixed income," he said, "because you can do all that yourself and they won't get a commission."

But St. Petersburg retiree Jane Spafford said retirees need to be careful about getting too conservative too early.

"Some of them are too cautious and don't get into anything but certificates of deposit," she said. "Nobody's ever going to get anywhere that way."

She said investors need to strike a balance, being neither too conservative nor too aggressive.

"I have some stocks, some bonds and some funds," she said. She even owns a fund that invests in Internet stocks, which she thinks will make a comeback.

Spafford, 82, worked as a security specialist for a defense contractor. She said she has educated herself about money by reading Money magazine and newspapers. She too believes in keeping fit, working out at a fitness center three times a week.

Some of the panelists own annuities of various kinds while others say they wouldn't touch them.

"Twenty years ago, I would not have bought an annuity, but if you don't have heirs, annuities are a good thing," said Joseph Demers, 88, of Citrus Springs. A retired engineer, he is a fan of charitable gift annuities, which pay him a regular income as long as he lives; a charity will get the balance at his death.

"The last two years I've given $350,000 to the Salvation Army," he said. "You get a tax break, and it pays 11 percent as long as I live."

Many of the panelists say they enjoy giving money away, usually to their children and grandchildren.

"I do not anticipate having an estate tax," Sanford said. "Giving it away is the only way to honestly beat the government, and it's kind of fun."

Others say they never accumulated a large nest egg but find pleasure in making the money they have go further.

"I had a large family, and when you have a large family, it's difficult to do much saving," said Frederick DeLeo, 82, of Spring Hill. Once the owner of an auto parts business, he has become a champion coupon clipper in retirement.

"I carry a box of coupons in my car no matter where I go," he said. "My wife calls me a super shopper."

He relishes conquests such as this one: A Publix flier offered a store coupon for $1.50 off a 20-ounce box of Raisin Bran. He took the coupon to Kash n' Karry, which had Raisin Bran on sale for $2 and honored its competitor's coupon.

"It cost me 50 cents for a 20-ounce box of Raisin Bran," DeLeo said proudly. "I do this constantly. I'm sure I save a substantial amount of money."

He also believes in doing his own home repairs, although he has had to give up mowing his lawn. He plans errands to minimize gas consumption and scouts the gas stations as he drives, looking for the cheapest gas in town.

The panelists say they recognize that their good health is a valuable asset.

"My motto is to exercise vigorously, eat judiciously and keep a good outlook on life," Sintich said. "If you go into stress, you dig your own grave. I've relaxed since I've retired. I take care of myself and I haven't got much to worry about."

But some panelists do worry about losing the good health they have enjoyed. Typically they have very limited long-term care insurance or none at all

"It's so expensive," Corbett said. "We have a pretty good life as long as the health holds up."

St. Petersburg retiree John McNamara, 83, said the possibility of a health crisis is a big concern for him.

"Getting impaired to where you can't function too well is the biggest worry for all of us in this age category," he said. But the retired auto worker said he is much better off than most of his friends.

"Most of the friends I have are meagerly retired; they're just getting by," he said "If they have a catastrophic event, I'm sure they'll go down the drain."

Many of the panelists say they have made plans for the day when they can no longer manage their own finances.

"I've got a trust to take care of disability," said Corbett, who added that one of his six children will serve as trustee. He said he also has other estate planning documents in order, including a living will and power of attorney.

But like many older investors, he no longer has a set of financial goals.

"I'm just trying to keep what I've got," he said. "I just go along with the tide and it seems to work out pretty good."

-- Helen Huntley can be reached at huntley@sptimes.com or (727) 893-8230.

Money management is a key issue for many older people for two reasons: They have more assets than younger people and they count on them to generate part of their retirement income.

Median household net worth*

Age of head of household

45 to 54 $85,000

55 to 64 $145,000

65 to 74 $190,000

75+ $132,900

Sources of income for the 65+ population**

Social Security 38%

Assets 20%

Pensions 19%

Earnings 21%

Other 2%

Statistics do not include nursing home residents.

*Includes net home equity, other real estate, business ownership and financial assets. Numbers are for 1999. Source: Panel Study of Income Dynamics, Institute for Social Research, University of Michigan.

**Numbers are for 1998. Source: Current Population Survey, U.S. Census Bureau.

"Forget about the heirs. Get yourself comfortable and give them whatever is left." -- Frank Vitro, 80, Safety Harbor

"Set something aside each month as a regular investment. You can't just blow it all and say, "I'm going to enjoy retirement.' " -- John McNamara, 83, St. Petersburg

"Stay awake and sell when the time is right. Leave the last 25 percent (of profit) for somebody else." -- Joseph Demers, 88, Citrus Springs

"Educate yourself money-wise by reading up on the subject." -- Jane Spafford, 82, St. Petersburg

"Take everything a broker says with a grain of salt. I question everything. I go searching and try to find out the basis for it." -- Anton Sintich, 90, South Pasadena

"Don't play the lottery or gamble. It's a losing proposition." -- Frederick DeLeo, 82, Spring Hill

"Don't pay a commission when you can get performance with these no-load funds that are just as good." -- Walter Sanford, 80, Largo

"People should be prepared for things and then they wouldn't have so much trouble when somebody dies. Everything should be planned out." -- Verna Haswig, 91, Largo

© 2006 • All Rights Reserved • St. Petersburg Times
490 First Avenue South • St. Petersburg, FL 33701 • 727-893-8111

Contact the Times | Privacy Policy
Standard of Accuracy | Terms, Conditions & Copyright