Paying Bills

Beal is deferring his dream of moving up to Spokane, Washington, where he hopes to set up a shop to tinker with motorcycles and old cars, including a 1926 Model T Ford in his garage.

“It’s making it a little harder to pay bills,” said Beal, 67, who also receives disability payments related to military service. “Thank God for my VA pension.”

Tarr cultivated some employees for years, such as Mae Holloway, who started her 40-year career at AT&T as a telephone operator and ended up overseeing maintenance in Oakland. Tarr would stop by Holloway’s desk, encouraging her to come up with a budget for her retirement.

In 2008, Holloway, then making $69,000 a year, decided it was time to leave. She was 62 and figured she needed her investments to generate $3,000 a month. So, hoping she could have money left for her children after she died, she turned down the guaranteed $2,500 a month pension and took a $600,000 lump sum payment from her pension and 401(k). She rolled it over into an IRA, invested in variable annuities and REITs.

‘No High Risk’

“If I do this, can you guarantee I won’t go broke before I leave this world?” Holloway remembered asking Tarr. “And she said yes. I told her no high risk. I didn’t want to be aggressive.”

Tarr said she would have never made that kind of statement.

“I used to call it the G-word,” she said. “I could never guarantee anything. That is the first rule of investing.”

Holloway lost about $90,000 because of the reduced value of her REITs, according to Sommers, her attorney.

“I’m losing sleep over it,” Holloway said. “I should have just left it. I wanted to leave money for my kids.”

Lew’s Mortgage

Lew, the former administrative assistant with the hole in her kitchen ceiling, has a more immediate worry: paying her mortgage. An immigrant from Central America, she retired from AT&T in 2003 with an IRA set up by Tarr. Afterwards, they often discussed investments over coffee at Lew’s kitchen table, as her prized green parrot squawked in a cage with a sweeping view of the parched hills surrounding San Francisco.

Lew started her withdrawals at $2,000 a month, then bumped them to $2,500. Lew said Tarr blessed the move -- something Tarr disputes, saying she had warned against it.

By 2010, Lew noticed losses in her account. Her REITs have plunged $145,000, according to Sommers. To make ends meet, she is caring for neighbors’ children. She will run out of money in three or four years, which could force her to sell her house.

“I was old-fashioned like my mom about planning for the future,” said Lew, 61. “I never thought I’d end my years worrying about money.”
 

First « 1 2 3 4 5 6 7 8 9 » Next