John and Linda Buch were startled at the financial planner's conclusion: Just save a bit more and the couple could retire early and still have a $15-million nest egg in their 80s.
"For you folks," said Margie Mullen of Mullen Advisory of Los Angeles, retirement "will be the golden years. Most people aren't in your situation."
The Buchs knew they were doing OK when they sought advice from a planner, but they had no idea they could ever be that well off. Mullen's analysis assumed the couple, who are airline pilots, would continue to earn a combined income of almost $300,000 for another decade or so, that they would earn returns of about 10% annually on the bulk of their substantial savings, and that they would want to avoid early-withdrawal penalties on their retirement accounts.
But after hearing the details of Mullen's plan and thinking about it, John, 44, asked: "Why do we want to die with $15 million?"
The couple, who have decided not to have children, said they wouldn't mind leaving money to relatives or charity but that dying with millions of dollars doesn't have much appeal.
"My father always said, 'Die with your last money spent,' " Linda, 34, said. "I like his attitude."
So to help the Buchs clarify their thinking, The Times asked for another view, this one from Stephen Pollan, a financial and legal consultant and commentator in New York who is the co-author of the recently published book "Die Broke."
Pollan challenges many common assumptions about retirement and inheritances. In short, he doesn't recommend either.
"On your last day on this Earth, both of you should have given a final check to the undertaker, and, with any luck, it should bounce," Pollan told the couple, using a favorite line.
No one should transfer wealth after death, Pollan argues. Rather, he advises his clients who want to give away money that they do so while they are around to see others put it to use and to enjoy the gratitude.
"You can't hear thanks when you are dead and buried," Pollan said.
Retirement, he says, is an idea whose time has passed, something that for most people is neither necessary nor desirable.
"Look at your working life," Pollan tells his readers, "as a lifelong journey up and down hills rather than as a single climb up a steep cliff that ends with a fatal step off the edge at the arbitrary age of 65."
Specifically, Pollan cautions people against being too financially and emotionally dependent on an employer. A job may seem secure now, but that may not always be the case.
In fact, John and Linda, who fly passenger jets for United Airlines, are concerned about their ability to meet the physical demands of the job. If they fail one of the company's twice-yearly physicals, they can be grounded indefinitely.
Because of the job-security risk, "it would be nice to have the opportunity to retire early," John said.
That fear goes right to one of the main points in Pollan's "Die Broke" argument: that workers today can't count on any sense of corporate loyalty, and that they should thus think of themselves more as "free agents" always looking for ways to make themselves more marketable.
"Don't rely on retiring from your job" on your own terms, he told the Buchs. "It won't happen on your timetable, but their timetable. I want you guys to decide when to get out."
Pollan advised John and Linda to begin thinking about ways they could transfer their skills into other careers, possibly teaching or setting up a business. He also suggested that the couple explore arrangements suggested in his book--including annuities, disability insurance and charitable remainder trusts--that would help assure or protect income in the future.
None of this is to say that the Buchs or anyone else worried about saving should forget about putting money aside, neglect to take full advantage of any pension or tax-favored savings plan, or ignore the need to set financial priorities. Rather, Pollan said, it's that organizing one's finances around a goal of building up a big nest egg isn't the best way to go about it. If the Buchs want another way to make sure they have enough money throughout their lives, Pollan said, they should approach their finances with these thoughts in mind:
* Work: Individual jobs may come and go, work schedules may change, and pay may rise or fall, but John and Linda should think of themselves as people able to earn money in one way or another for decades to come.
* Insurance: Health is an unpredictable thing. The couple should make sure they have sufficient health and disability insurance, and possibly long-term care insurance, at all times.
* Annuities: An annuity is a contract between the purchaser and the seller that guarantees the purchaser an income for a set period or until death. The high expenses and inflexibility of some annuities have made a lot of people wary of the whole investment category, but Pollan likes them because they remove the worry of running out of money in later life.