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[Times photo: Ken Helle]
Paul Matych, shown with his daughter, Christine, and his wife, Ellen, decided before 50 that he would retire.

Retirement at 50

A diligent saver and investor from Tampa who benefitted from a lengthy bull market is among the 14 percent of Americans who retire before age 55. He left the work force more than three years ago and hasn't looked back.


© St. Petersburg Times, published May 6, 2001

TAMPA -- Paul Matych enjoyed his job selling life insurance. It often produced a six-figure income, plenty to support a new baby daughter and wife and even enough to pay for the occasional Hawaiian holiday.

But four years ago, new owners reorganized the company's Tampa unit and Matych no longer controlled the way he did his job. The new owners "just bought us for the bloc of business," he said. "They didn't care about the people."

He dreaded going to work. So Matych reviewed his finances on the eve of his 50th birthday and decided, "I don't need this."

When he quit, Matych joined 14 percent of Americans who retire before age 55. Most toil until at least 60, and often longer. The biggest reason: lack of planning and savings. But experts advise it's a good idea to prepare for the possibility of early retirement, even if you plan to work into your 60s. Surveys show that more than one-third of workers retired earlier than planned, many because of poor health or corporate downsizings.

Unlike most baby boomers, Matych, who turns 54 this week, has been a diligent saver and investor who benefited from the decadelong bull market. "There's no magic to this," he said. "I didn't buy Microsoft at $3 a share. I didn't try to hit home runs. I just tried to make the best choices I could."

To be sure, he had a head start, thanks to good income earned from selling insurance to corporate groups. Some years he made more than $100,000, including bonus checks he socked away. He also learned what not to do by watching other high earners around him.

"I was surrounded by people whose earnings were in six figures or even seven figures who really didn't know much about finances," he said. "If they made a million, they spent a million."

Matych decided he wanted to be different and began saving aggressively. He said his first really smart move was to pay cash, about $110,000, in 1987 for the northwest Tampa house where he still lives.

"It took every penny I had, but my accountant told me that if I could pay off the house, I could really sock a lot of money into the market," he said. "If you want to save, you need to plug up the holes in the bucket. Mortgage payments take so much money and don't get you anywhere. The first seven or eight years of a mortgage is almost all interest."

Matych said focusing on a goal also was crucial to his success.

"People need to sit down and think about what they've got and where they are going," he said. "Here's where I am. Where do I want to be?"

Matych said he goes over his complete financial picture about five times a year to make sure he is on track. He doesn't use fancy computer software; his records are in a simple three-ring binder.

In the beginning, Matych invested through brokers, but gradually he became disillusioned with that approach.

"I found they couldn't answer my questions," he said. "They recommend what they are told to push."

He decided it was time for a change when he caught a television appearance by Vanguard Funds founder John Bogle, who has spent a lifetime preaching the virtues of low-cost investing.

"He really struck me as sincere and just telling it straight up," Matych said. "I decided I had to start doing things that were smart instead of expensive."

Matych learned about index funds, which aim merely to track the market's ups and downs over time and actually do better than the average fund managed by an active stock picker. Now he sounds a lot like Bogle.

"The magazines and the experts lead you to believe that there is a magic bullet out there, a magic manager or a magic fund," he said. "But most mutual funds cannot beat the indexes, so why look for a needle in a haystack?"

Matych ended up making the Vanguard 500 Index Fund, which tracks the Standard & Poor's 500 Index, the foundation of his portfolio. During the '90s, it returned an average of 18 percent a year. The fund is still Matych's largest holding, although he also owns actively managed funds, including three specialized sector funds that invest more aggressively in technology and health care.

While market declines make many retirees nervous, Matych said he has no trouble sleeping. His secret? He keeps three years' worth of living expenses in a Vanguard money market account.

"I'm not selling now because I have a cash base," he said. "When the market picks up, I'll replace the cash. If you retire without cash, you're naive about the future. The market takes dips and you have to plan for them."

Even with the market's recent decline, Matych still has a healthy portfolio, although he declined to reveal its size.

When Matych retired, so did his wife, Ellen, 42, a former claims manager for an insurance company. They said they live modestly but have everything they need.

"We try to be comfortable, but not crazy," he said. They drive a 1994 Chevy Corsica and a 1997 Volvo, and take care of their yard and pool themselves. Before retirement, the Matychs took trips to Hawaii and the Virgin Islands.

"Now we're taking Christine to Disney World," he said of their daughter.

Matych said he doesn't miss working. In addition to spending time with his family and doing household chores, he fishes for snook, plays golf and grows orchids and roses.

To combat the extra pounds he has put on in retirement, he walks the golf course.

"The key is to have something to look forward to," he said. "There is not a direct correlation between how much money people make and how happy they are."

Ellen Matych said she is happy her husband was able to retire, but confessed "there are times when we get on each other's nerves."

Although they live on their savings now, eventually the Matychs will have a pension and Social Security benefits to supplement their income. At the same time, their expenses are likely to grow faster than the rate of inflation. They want to provide for Christine's education, her first car and a wedding. They also are concerned about the rising cost of health insurance.

"Our premiums have skyrocketed and we don't have control over them," he said. "That's hard for a guy who likes to control everything. Our premiums go up 10 to 15 percent a year. Over the next 20 or 30 years, that's a significant amount of money."

Matych said anyone aiming for early retirement should realize it won't be easy.

"You've got to really be committed to it," he said.

- Helen Huntley can be reached at (727) 893-8230 or at

Paul Matych's portfolio

Paul Matych believes in mutual funds. He says Vanguard 500 Index Fund is his largest holding and Vanguard Growth Equity Fund his biggest disappointment.

* * *

Vanguard Funds

500 Index Fund

Prime Money Market Fund

Capital Opportunity Fund

Primecap Fund

Growth Equity Fund

Growth & Income Fund

Health Care Fund

* * *

Fidelity Funds

Select Electronics Fund

Select Technology Fund

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