New book maps out path to retiring young

By Deb Anderson, Lifestyles Editor

While reading Larry A. Ferstenou's book, You Can Retire Young! How to Retire in Your 40s or 50s Without Being Rich, Aesop's fable about the ant and the grasshopper kept coming to mind. Although the book's initial focus addresses ways and means to retire in one's 40s or 50s, it also stresses the importance of planning for the future, so that those of us not yet retired will realize we need to live for tomorrow--like the ant, and prepare for those days of necessity; so that we don't end up like the grasshopper who met the winter of his life caught off guard.

In his well written, easy to read guide, Ferstenou makes the point that too many Americans plan to retire on the "three legged stool," the combination of an employer funded pension, Social Security and personal savings. Realistically, he says that is not enough, but a fourth leg of the stool--continued employment, can be made optional, not mandatory, if investments and planning have provided a sound financial base.

Ferstenou, a former Bloomer resident and graduate of UW-Eau Claire with a degree in psychology, and a masters in vocational rehabilitation from UW-Stout, said that the untimely death of his father, Edward, was a life altering moment.

"I was 26 at the time and realized first-hand that life can be much shorter than anticipated," he said.

Thus Ferstenou and his wife, Kris, began setting goals in 1977 to retire early. Because his father died at age 52, they planned to retire when Ferstenou turned 50. They spent the next 16 years "doing everything we could to make retiring early a reality."

Using the three keys: Simplify your life, embrace financial self-discipline, and invest wisely, they achieved their goal sooner than expected.

"As it turned out, reality came eight years earlier than planned," said Ferstenou, who retired at 42 after a 17 year career in vocational rehabilitation. Kris, who has degrees in physical education, health education and accounting, was just 40. And their combined income averaged only $47,300 per year over their careers. They have now been retired for nine years.

In a survey that Ferstenou created and distributed, results showed (in order of importance) that most people work to support themselves and their family, they want and/or need the benefits, and can't afford to retire yet. Ferstenou also mentions the work ethic, so ingrained in many of us, especially those in the Midwest, which can be a big factor.

In response to comments like, "You're too young to be retired," Ferstenou writes, "Explaining our workaholic days, not having any children, and living on a budget, usually sufficed."

The Ferstenous' concept of simplifying your life had a familiar ring to it: Financial guru Suze Orman can be heard touting the same advice on television. And obviously, it works.

While it makes good sense to pare down, it may seem strange that having less can earn you more. But in a Feng Shui sort of way, I began to see that possessions can be mentally and financially draining--the very nature of them requires a focus of maintenance: Money, time and energy, which saps you of your freedom to enjoy life.

Ferstenou advocates buying less of things you don't need and selling unwanted items or giving them to charity. His philosophy is, "The less you own and have to take care of, the less complicated your life and the less it costs to live."

Ferstenou further states, "Neither of us has ever seen any benefit to smoking, drinking, gambling or taking illegal drugs. On the contrary, what those activities can do is waste your money, defer your retirement and ruin your life."

If retiring early is your aim, he advises setting financial goals which require practicing self discipline. Although the focus of his book is not about being rich, he uses millionaires as an example of wise money management, stating that most are frugal, live below their means, invest nearly 20 percent of their income each year and enjoy watching their net worth grow. He offers similar advice to the reader: Maintain a diversified portfolio through mutual funds and hold onto them for the long term (20 years or more).

Ferstenou says that sacrifices today could be viewed as "trade-offs" for a better future, and encourages accumulating $100,000 (minimum) in tax deferred retirement accounts as soon as possible.

"After 10 years of marriage, we had that nest egg," said Ferstenou. "If you decide you want to retire young, place an emphasis on living more for tomorrow than today."

Other rules of thumb include continuing to add to your 401K plans, establishing IRAs and considering annuities.

"At a minimum, everyone should have an Individual Retirement Account," said Ferstenou.

While Ferstenou and his wife have opted for a simple lifestyle of traveling, occasional part-time work and volunteerism, they realize not everyone will want that and must plan accordingly to fit their needs. That includes where you want to live and the activities you plan to undertake.

Following career moves to Kansas and California, the Ferstenous now reside in Utah where they enjoy the "natural beauty" and are living out their retirement dream, grateful for the mild winters and many friends. As a couple, they believe in a good diet and exercise and are in good health because of the regimen. They enjoy cultural and sports activities and remain very active; adding that the book has been a fun and passionate endeavor for the past several years.

Ferstenou said they enjoyed their time in Menomonie and Eau Claire and still have family ties in this area. He remains a loyal Packer fan.

"Boredom is not a problem and it shouldn't be for anyone who retires early for the right reason," said Ferstenou.

Giving credit where credit is due, Ferstenou cites several books and websites in his book which made an impact on their thinking throughout their journey; with hopes that the references will help others on their path to financial security. To learn more about his book, You Can Retire Young: How to Retire in Your 40s and 50s Without Being Rich, access his website, www.youcanretireyoung.com.