Podcast 102: How Andrea Retired Solo With Confidence | Real Retirement Stories

Steve Chen (00:00):

This episode is brought to you by the Boldin Financial Planning Platform. Formerly New Retirement, create a financial plan for free Boldin.com. Alright. Hey folks, this is Steve Chen from Boldin. I am joined by Andrea Solarz today. She’s a member of our community, and this is another recording of folks for our spotlight series. And just quick intro. So Andrea’s joining us from Arlington, Virginia, very close to Washington, DC and it’s been a member of our community, and we’re just going to dive in and kind of talk about her story, see what lessons there are to be shared. So with that, Andrea, welcome to our show.

Andrea Solarz (00:37):

Great to be here.

Steve Chen (00:39):

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

Andrea Solarz (00:59):

Well, that story really begins when I was a child. So there’s a long story and a short story, but I really was a saver starting as a child. I can remember we, we had a Bank of America pass book, and at school you would take your dime to school and it would get deposited into your Bank of America savings account. So I started saving that early. And also my parents did something really interesting when we were young, which gave us a budget. I mean, it gave us money that we could budget ourselves for whatever our needs were 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 to think about managing daily expenses. So that put me on a good path moving forward.

Steve Chen (01:57):

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

Andrea Solarz (02:03):

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

Steve Chen (02:25):

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

Andrea Solarz (02:35):

I can thank of my parents for that too. For my 13th birthday, I got three shares of holiday in stock, and my dad was not a stock investor. He was kind of a buy high sell low kind of guy. He would panic and say, I can’t do this anymore and get out of things. But it helped start thinking about, well, this is an option. You can invest in things. Eventually it was bought out. I don’t have any shares from that left, but once I finished up graduate school, I also opened up an account, was a stockbroker, and started investing in some stocks and then eventually mutual funds as well.

Steve Chen (03:21):

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

Andrea Solarz (03:26):

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

Steve Chen (03:41):

It’s interesting that you recognized your father’s retail behavior of buy a high and sell low. Did you see that at the time, or you just realized that later?

Andrea Solarz (03:51):

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

Steve Chen (04:06):

Yeah. Did you share that feedback with your father?

Andrea Solarz (04:09):

I don’t think I did.

Steve Chen (04:14):

That’s 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 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 to the bottom.

Andrea Solarz (04:37):

That realization was still a really good lesson to me though, because I didn’t do that. I always held on.

Steve Chen (04:44):

Right, right, right. Yeah, so it’s good that, were you reading any investing books?

Andrea Solarz (04:49):

No. No, but I joined the American Association for Individual Investors and went to some of their meetings and so on. So I was in my late twenties, early thirties when I was doing that, I guess.

Steve Chen (05:06):

So I mean, that’s talked to those guys. It’s interesting. So you’re self-educated around financial literacy where you given so great. Your parents helped you with this budgeting idea in true city of investing to you, but then you must have had some, you obviously had interest because you’re out there seeking out these organizations and things like that.

Andrea Solarz (05:30):

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 held onto those. I have very, very rarely sold any of them because in my head they were for retirement rather than

Steve Chen (06:04):

How did you learn about the whole buy and hold, which is the right way to do it? Is that self-educated again? And also were you index investing, were you said you meant you started buying mutual funds?

Andrea Solarz (06:19):

I think I would read about them in Kipling jurors or in newspaper articles and things like that. So at the time, they were the Janice International Fund and then the s and p 500. I did, I look back 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 it was intentional at the time to get, basically to diversify into different types of investments.

Steve Chen (06:58):

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

Andrea Solarz (07:12):

Yeah, 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, it works out okay.

Steve Chen (07:21):

A hundred percent. Well, 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?

Andrea Solarz (07:32):

Here’s one. So a friend had an association with a company that was coming out with an IPO. So we all had a chance to get in on it, which was great, which I did, and invested some money in that, and it went down to 97 cents a share, and I bought some more when it was at that level. And so all in all, I put in maybe $1,200. Then during COVID, that investment went up in value to over a hundred thousand dollars.

Steve Chen (08:06):

Wow. A hundred x or whatever, 50 whatever, six 70 x.

Andrea Solarz (08:12):

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

Steve Chen (08:44):

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 I mean, you’ll hear both sides of it. People are like, oh, if you have, I mean, there’s always survivorship bias. So people who have had Apple are like, well, yeah, I just going up then I held on hold your winners. That’s one thing people say, but also you end up with this massive concentration risk,

Andrea Solarz (09:11):

Hold the concentration,

Steve Chen (09:12):

And then the argument for rebalancing is that things that are winning and getting huge, you sell off some of that and put it into things that are doing less well. 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?

Andrea Solarz (09:39):

I would’ve started thinking specifically about what it means to manage my money and retirement and to move towards retirement. Things like Roth conversions. There were no Roth accounts. When I started investing in retirement with employers, that was never an option. When I had an employer plan and I did learn about them, 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 golden point for doing those. And that is when I did them. But if I thought more planfully, I would’ve started a little earlier so that I could have gotten more in and also taking advantage of capital gains, zero tax rates, and I did that one year, but it’s like, oh man, if I’d realized that earlier, I could have reset the basis for practically every investment that I have, that would’ve been a better strategy. I mean, it’s fine the way it is, but it would’ve been a better strategy.

Steve Chen (11:01):

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

Andrea Solarz (11:37):

I think there is a lot of misinformation and hype out there about Roth conversions. So where people end up making conversions and overpaying their taxes, it makes no sense that now that if your tax rate is higher, it’s best in the long run when you can see, 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 in the same tax bracket in either period. The net amount that you have get in the account after tax is the same. It confuses a lot of people.

Steve Chen (12:21):

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

Andrea Solarz (12:34):

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

Steve Chen (12:41):

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 think also that you’ve looked at Rob Berger and some of the other folks. Who are some of the influencers that you’ve learned from?

Andrea Solarz (12:56):

He is a big one. His videos are very accessible, and he’s pretty straightforward kind of presenter. And of course, now I’m not going to be able to think of any names, but Kitsis and Piper, those kind kind of folks. I

Steve Chen (13:15):

Think you mentioned Christine Bens as spoken.

Andrea Solarz (13:17):

Oh, yeah, yeah, yeah. She’s great. I’ve got her book. She’s got great book out on retirement that was published last year.

Steve Chen (13:26):

Yeah, no, she’s a fantastic resource and I think a good spokesperson for Morningstar, but just a big presence in the online and financial literacy world

Andrea Solarz (13:36):

For sure. 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 Group.

Steve Chen (13:51):

Is that Andy Panko? I know that he has a big kind of retirement planning education taxes. He’s very tax focused.

Andrea Solarz (13:57):

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

Steve Chen (14:06):

Yeah, he’s supposed to come on our podcast next week or in the next couple weeks, so I’m looking forward to having him on and 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

Andrea Solarz (14:25):

Cool to see. Yeah, yeah. It’s a really great contribution when people are sharing their knowledge, sharing knowledge. It is free to share knowledge, although you can also charge for it, so it’s really nice. Would people share it in a very giving way.

Steve Chen (14:44):

Yeah. In terms of your own planning, can you just share a bit about how you use Boldin and what you find helpful about it?

Andrea Solarz (14:57):

Yeah. Well, I signed up for it or I’d 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 Boldin thing again. So I signed up and by the time I entered all of my information, it was just this huge revelation to me that I actually was in good financial shape. I’ve been self-employed for most of my career, and so my income has been very sporadic. I established a SAP when I sort of officially went, 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, some of which worked out and some of them didn’t as well, that in my brokerage account, that actually put me in good shape. So it was such a revelation to see that, and that moved me then to go ahead and take social security, get my social security going and decide, okay, when people ask, now I’m just going to say I’m retired.

(16:33):

Yeah, yeah. And I had enough done to my mortgage, which finally after 35 years, I paid off my mortgage. So that made my living expenses a lot less, too bold, really had a huge, huge influence and where I am now.

Steve Chen (16:53):

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

Andrea Solarz (17:08):

It was, I think that translation from savings to income that, oh, it. It’s not like I have so much I, when I compare myself to a lot of the people that are in these groups online, I’m clearly in the bottom quarter or whatever in terms of what I have, but it’s plenty, it would be difficult for me with my spending patterns to ever run out of money. Even with traveling now, planning a couple of very nice trips and starting to spend more money on and giving some to friends, 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

Steve Chen (18:01):

Can now spend it.

Andrea Solarz (18:04):

Yeah, I can now spend it in a planful, thoughtful way. I’m not buying a yacht or anything, but it was a surprise. I dunno why it was a surprise, but it was more of a revelation than a surprise.

Steve Chen (18:23):

Well, that’s awesome. I mean, that is a big part of it. I think for so many people, we’re so oriented around saving money and investing it and building wealth that the mind shift of, okay, well 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 it’s good to use. The money is an important unlock for a lot of folks.

Andrea Solarz (18:52):

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

Steve Chen (19:04):

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

Andrea Solarz (19:41):

So I now have this guaranteed income, which is social security, and my retirement funds are with TIA craft. So I annuitized a little bit of that money, so that forms my guaranteed income, and then I’ve now redirected dividends to my bank account instead of reinvesting them with most of my accounts to add a little more cash. So 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 going to give away that money now for the next year. I’m going to take what was going to my mortgage, mortgage and interest, and I’m going to get rid of that money and have it do good for whatever. I’ve had a couple of friends who’ve had fallen into bad circumstances and a little money can make such a big difference in somebody’s life when they don’t have it and just bridging them, getting through a tough time, whatever. So I’ve done things like that to some causes and stuff, whatever. It’s nice to be able to just give it freely.

Steve Chen (21:00):

Sure. 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. I think if you look at people, what makes them the happiest is helping people doing work for things that are bigger than themselves. It’s not buying things. People feel like, oh, I mean it’s experiences, but if you look at someone who saves 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 another best practices, 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 getting capturing high returns.

Andrea Solarz (22:03):

Yeah, I mean, I haven’t dipped into any of my retirement savings, which I’m going to have to do eventually. So I need to think more about, okay, how do I use that money? But for me, and people have different attitudes about this, it’s like, no, it’s more important to focus on total return and whatever. That’s fine. For me, I think especially in part since my income was so variable and insecure during much of my working life, 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.

Steve Chen (22:51):

People that have pensions are super happy people, at least. Are they very, I think they’re super secure. And 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? And so it’s cool. And social security is obviously a key part of it, but Annuitizing can, and you have it through tia, but some folks just, they’ll buy a spi, a single premium immediate annuity, or they’ll have a deferred annuity that they’re planning on. 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. So 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.

Andrea Solarz (23:56):

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 blacks lists all of them when there are actually very good options that make sense for people. So it’s important to really understand what the options are and what the implications of them are for you

Steve Chen (24:18):

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

Andrea Solarz (25:09):

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

Steve Chen (25:28):

Yeah, a hundred percent. There’s so interesting charts that show the amount of money you have to save 30 years out, 20 years out, you have to save so much more money later versus saving a little and getting the magic of compounding going for you in a big way. Alright, awesome. So any other big plans for you? It sounds like you got a couple trips coming up. Any highlights you want to share?

Andrea Solarz (25:56):

Yes. I took a trip to China in May with this culinary travel group and that was 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 Italy in November, so I am definitely getting some, I guess they don’t stamp your passport anymore, but some virtual stamps in my passport is part of the plan for right now.

Steve Chen (26:29):

Some places stamp your passport, I think it was just in the Dominican Republic, and they were stamping our passport, which is cool. I remember you always used to want to get tons of stamps around Europe or something. That’s cool. Awesome. Well, Andrea, I really appreciate you taking the time to share your story about how you’ve both accumulated and now you’re 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, for the folks listening, hopefully you got some good lessons in here. I think it’s always great to kind of talk with folks in our community. Yeah, so Andrea, thanks for being part of our community and contributing back. Really appreciate it.

Andrea Solarz (27:13):

Yeah, Annette, I’m glad to be here. One other thing I’ll mention, I think that I, single woman, I don’t have children. I think so often the people that we see presented are part of a couple, they have children. So I think that planning needs to be a little different if you are a single person that you need to, because you have to pay attention to it all yourself. You’re the only one who’s managing that. So just say, yeah, you can do it. You can still do it.

Steve Chen (27:44):

Yeah. Well, and I think one reality is is that women outlive men and they tend to earn less, although it’s changing. It’s changing pretty quickly. Women are 60% of college students now, and I 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 the 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 this is the one part of it. Many of them will end up living a single life later in their years and they’re going to be potentially managing it themselves anyway. So I know that a lot. One thing dynamic we see is in a lot of families or couples, a lot of families, there’s someone that’s really into it and 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 it’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, Andrea, 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.

Andrea Solarz (29:19):

Sounds good.

Steve Chen (29:20):

Thanks for joining us. Appreciate it.