Daydream Believers
These boomers have grand ideas for their Next Big Act. We show them how to pay for it.
By Donna Rosato and Asa Fitch

(MONEY Magazine) – Finish this sentence: "I've always wanted to_____."

Undoubtedly there's some big beautiful idea you've dreamed about for years but just haven't gotten around to yet. Every boomer has one of these "gotta do it before it's too late" ambitions (sometimes, unkindly, referred to as pipe dreams). Such dreams don't always come cheap. But if all that stands between you and your Act II is figuring out how to pay for it, you've come to the right place.

To prove the point, we put out a call asking readers to finish the sentence above. From the hundreds of responses we received, we selected seven boomers and set them up with a financial planner and an expert in the field of their particular dream. Read on to find out what it will take to sail the world or start a foundation or write a book. And then ask yourself two questions: What do you really want to do? And what's holding you back?



Shirley Jetter fell in love with sailing during a sunset cruise in Jamaica 34 years ago. "And since then, I've done everything possible on a boat, from repairing engines to mending sails," she says. A special-education consultant at a public school (divorced, no kids), Jetter uses summers to pursue her pastime. "But lately, work has become a distraction from my dream," she says. That dream: to sail around the world for the next decade. Jetter's retirement "is locked in and I can pull anchor at any time." There is one consideration—buying her 56-foot dream boat, which she expects will cost $150,000.


Boats don't come cheap, and the bigger they are, the more they cost. A brand-new 56-footer goes for $500,000 and up, says John Kretschmer, a Florida-based author of five sailing books who runs workshops on boat buying. Add to that an annual upkeep of roughly 10% of the purchase price. That outlay would dip into Jetter's savings big-time and could exhaust her money well before she's ready to furl her sails for good, says Ryan Vander Zwart, a Holland, Mich. financial planner.


Jetter can still live her dream if she's willing to buy a smaller boat. A 56-footer is too big for a solo sailor anyway, says Kretschmer. She can easily find a good-quality, 10-year-old 43-footer for $150,000 or less. "Used boats are a great value," says Kretschmer, and smaller ones cost less in upkeep. Replacing a mainsail on a 43-footer would run $5,000 vs. $12,000 on a 56-footer. Since the selection of saltwater vessels will be limited in Michigan, Kretschmer suggests that Jetter shop in Florida or the Chesapeake Bay area.

Jetter plans to use a $75,000 inheritance toward the boat. Until she makes the purchase, Vander Zwart recommends keeping the cash in a money-market account or CD. A number of funds now pay 4.5% or more (see page 40); compared with her current 3%, the higher rate could add an extra $2,300 by 2009. Shirley estimates she can save an additional $400 a month, or $10,000 in the next two years. If she must, she can withdraw the rest from her 403(b).

Jetter needs to budget for other costs, including her mortgage. She has little equity in her home, so rather than selling it she might want to rent it out the first few years she's off at sea. Since it's in a picturesque area near Lake Michigan, it should easily generate rent to cover the mortgage and property management fees. Jetter luckily has health insurance covering overseas travel via her retirement plan. But she will need to consider boat maintenance and docking fees. Vander Zwart estimates that she'll need $3,500 a month for these and other living expenses. She can cover that with pension and savings until age 62, after which Social Security will bring her to $4,150 a month.

Since she'll be reducing her savings a bit, she needs to invest more aggressively. She has too much (11%) of her portfolio in cash, says Grand Rapids planner Ron Van Surksum. He advises shifting it into the Fidelity Freedom Fund, which is set up as a diversified portfolio unto itself. "That'll allow her to concentrate on the currents of the seas, not the currents of the market," he adds saltily.

Taking all this advice into account, Jetter's now looking for a smaller boat requiring no financing: "I'm willing to lower my expectations so I can go simple—and go soon."



Current ...$64,000

Expected pension ...34,800

Expected Social Security ...15,100


Money-market accounts ...75,000

Retirement: 403(b) plan ...311,000

IRAs ...39,000

Stocks ...9,000

Savings bonds ...6,600

Home equity ...20,000


Mortgage ...160,000



He may not have Bill Gates' billions, but Boyce Pearson hopes to start a foundation of his own when he retires in three years. After 27 years as a music teacher in Little Rock elementary schools, he's ready to start work on the Thurloo Pearson Foundation in Arts and Humanities. Named after his father, who encouraged him and his five siblings to pursue careers in the arts, the organization would raise money to aid inner-city kids who dream of singing, dancing, playing instruments or writing. Pearson, who won a singing scholarship to Texas A&M, says, "We want to give high school students a boost into college like I was able to have." Pearson and his wife Vera, 40, pull in a combined $106,000 a year. They think they can swing his retirement with the $2,400-a-month state pension for which he qualifies in three years. Vera, who will stay in the work force for 15 more years, will supply the rest of the couple's income and health insurance.


Launching a foundation will require time and commitment. Peri Pakroo, an expert on building nonprofits, says, "It takes an incredible amount of work to get something to the stage where it's up and running. There's everything from defining programs to marketing to raising money."

Chip Simon, a Poughkeepsie, N.Y. financial planner, is more concerned about whether Pearson has enough money to leave his job. He sees several challenges the couple will have to confront before Boyce can consider quitting. For starters, in the years before Social Security kicks in, the Pearsons' income will drop to around $70,000. They also have too little saved for emergencies or for Vera's distant retirement, warns Simon. Meanwhile, their daughter is in the 11th grade and headed for college. Even if she wins a scholarship, which the Pearsons are counting on, they may have to supplement her tuition from their earnings or their small portfolio, which is scattered among mutual funds, CDs, annuities and a savings account. "I see a Mercedes-Benz on the balance sheet that is not paid off, and I see investments that are all over the place," says Simon. "I think the immediate financial priority is his family's own self-sufficiency."


It may be a hard pill to swallow, but instead of retiring, Simon advises Pearson to stay on and weave the foundation into his working life, perhaps by starting a summer arts camp. If he can keep working for another 10 years, the Pearsons can bulk up their nest egg. Saving 15% of their salaries each year, and assuming a 6% return, they'll have around $340,000 to work with when he retires, not counting his pension.

Once Pearson's retirement plan is in place and he's ready to get his nonprofit off the ground, he'll need to pay a state incorporation fee of $50 and $2,500 or so to hire a lawyer and register with the IRS as a 501(c)3 tax-exempt organization. But he can't fund the rest of the dream alone, says Pakroo. "He needs to attract the interest and financial support of other people," she adds.

More grounded in the reality of his situation, Pearson is considering staying on the job and starting a summer program. Despite a long road ahead, he remains enthusiastic and is already promoting the idea among family and friends: "Everyone is buying into the foundation. They're getting excited and catching the spirit of it."



Current (combined) ...$106,000

Expected pension ...28,800

Expected Social Security ...23,700


Money-market accounts ...4,200

Retirement: 401(k) ...24,000

Roth IRA ...13,000

403(b) ...11,000

Brokerage accounts ...12,600

Annuities ...16,000

CDs ...3,000

Checking ...2,000

Home equity ...68,000


Credit card ...5,300

Mortgage ...72,000



In 25 years as a flight attendant, Vickie Spring has had plenty of high-flying adventures. Sure, she's served peanuts to the likes of soul singer James Brown, but she's also delivered a baby and helped thwart a kidnapping at 35,000 feet. When she retires in 10 years, Spring hopes to spin her yarns into a book. "I've always wanted to do something in addition to being a flight attendant," she says. "I took a few courses in English to see if anything was there. It was encouraging enough for me to say maybe I can tap into this and be more serious about it." To sharpen her skills in the meantime, she hopes to write a monthly flight attendant Q&A for her local newspaper's travel section. She's not too worried about financing her retirement because she will receive at least $4,800 a month in pension and Social Security payments, and she currently spends only $4,200 a month.


Janet Rosen, a New York City literary agent, points out that while Spring can write all she wants, book editors don't often take chances on an unpublished writer. Advances for new authors tend to be small, and publishers pay the money in chunks until the work is completed. Moreover, Spring will need an agent to sell her work, and that person will take 15% right off the top. Fortunately, writing doesn't cost money, just time, which should be plentiful in retirement.

The bigger issue: Spring has significant debt. She's carrying two sizable mortgages—one for her New Jersey home, another for a place in Florida—and a home-equity loan. She also took on a lot of credit-card debt to pay for relatives' medical bills and her daughter's education. According to Heather Hutchinson, a San Francisco financial planner, even though Spring should be able to rely on her pension and Social Security, her $300,000 in debts could bog her down if she carries them into retirement.


To give herself time to write, Spring's priority should be avoiding work in retirement. Since she already plans to continue with Continental Airlines for the next 10 years, Hutchinson advises her to save as much as she can—particularly in light of the fact that other airlines have reduced pension benefits. "It's time to start thinking very seriously about paying down the debts and adding money to retirement savings," she says. After Spring gets out of the hole, if she contributes $10,000 a year to her 401(k) for the rest of her career, she'll have an additional $230,000 to play with, assuming a 6% return. She should also consider selling off the two houses and moving to a smaller home.

Spring is smart to try to sell some of her writing now, says Rosen. She might even start work on the book before she retires, just to explore whether she has an abiding interest in the project. The more experience she has, the more likely agents and book editors will take a chance on her. To sell the book, Spring will have to prepare a proposal, which should include a memo explaining why her concept would sell, an outline and a few chapters (at least). Then she should pitch the book to a few reputable agents. She can find them by searching for members of the Association of Authors' Representatives (at

Even good writers with solid ideas aren't always able to sell their work, so while Spring should be persistent, she also needs to brace herself for rejection from an agent or two (or four). The book market is a fickle beast, and many would-be authors go into it with an overly optimistic sense of their chances. "Some people who are very practical in general aren't practical at all when it comes to creative areas," Rosen says.

Because the chance of failure is so high, Spring shouldn't expect a huge paycheck from writing. Instead, she should treat it as a hobby that has a small chance of paying off. "If you're able to make money, so much the better," says Rosen. "It could be a lot, and it could be not a lot," but Spring shouldn't count on becoming the next Dean Koontz.

Despite all the warnings, Spring is bullish on her literary career so far, and she's hoping to debunk a few myths as it moves along. "Flight attendants have aspirations too," she says. "We're not just flying around and being glamorous, as the general public thinks."



Current ...$66,000

Expected pension ...36,000

Expected Social Security ...21,700


Retirement: 401(k) ...50,000

Stock options ...6,200

Savings account ...3,600

Home equity ...72,200


Mortgages ...179,800

Home-equity loan ...85,600

Credit cards ...26,900

Car loan ...11,800

Personal loan ...4,600



"My greatest desire is to retire near the coast," says Jim Collins, who loves saltwater fishing and scuba diving. It's a dream he shares with his wife Elaine. Their ideal home: a 2,200-square-foot two-bedroom custom cottage in Myrtle Beach, S.C. outfitted with a guesthouse where their grown children can stay when visiting. They'd like to be inland, maybe on a marsh or river. The Collinses estimate it will cost $300,000 and hope to use proceeds from the sale of their current house, which they believe to be worth $400,000. They don't plan to retire to the beach full time until they're both eligible for Social Security. But they'd like to settle on a location and start building in the next year.


The actual cost of building a home that size in Myrtle Beach is closer to $650,000, well over what the Collinses expected. Adding to the challenge, the company Jim works for is downsizing, and his position as a research scientist could be eliminated this spring. (Elaine, who works at the same company, is likely to keep her job.) Though they have savings of about $1 million, they hadn't expected to put any of it toward the house. They had planned to slowly draw it down after retirement to maintain an annual after-tax income of $100,000. Says Jim: "I don't want this home to result in a significant change in our lifestyle."


Even if Jim loses his job this year, they may be able to have their house and keep their standard of living, says Bedda D'Angelo, a planner in Durham. Jim would get a buyout of one year's pay; he's also guaranteed a $2,000-a-month pension. Assuming they put $300,000 on a custom home, the payment for a $350,000, 30-year mortgage at 6% is more than $2,000 a month. That should be fine if Jim works till age 63, which he plans to do even if at another company. Later "the combination of his pension and their Social Security will cover basic living expenses and the mortgage," says D'Angelo. But they must use more savings to stay at $100,000 a year. As an alternative, they might look at an existing home, which would knock the price to $400,000 and the mortgage to $1,200 a month.

Whether or not they build, they must make their investments work harder to ensure that they'll be able to maintain their lifestyle for the next 30-odd years, says D'Angelo. Now 18% of their portfolio is in costly mutual funds; 15% is in bank money-market funds. They should transfer their investments to no-load, low-fee funds; all but $50,000 of their money market should go into diversified stock and bond funds; the rest, in a low-cost tax-free money market.

Says Jim in response: "We're happy to scale back a bit. We're not putting aside our dream to build just yet, but we are going to look at existing homes."



Current (combined) ...$152,000

Expected pension (Jim) ...24,000

Expected Social Security (combined) ...47,400


Money-market accounts ...160,000

Retirement: 401(k) plans ...477,000

IRAs ...283,000

Brokerage account ...170,000

Checking ...25,000

Home equity ...200,000


Mortgage ...190,000

Vehicle loan ...12,000



Ever since Marta and Art De La Torre married six years ago, they've spent nearly every vacation at a bed and breakfast. And each time, they've toyed with the idea of ditching their corporate careers and joining the inn-keeping crowd. (For now, they work at the same hospital; Art in IT and Marta as a finance executive.) Two years ago, they got serious about their dream. "In health care, people come to you only when they're not feeling well," says Marta. A B&B, by contrast, "is associated with vacations, happiness and good times," adds Art.


At a three-day inn-keeping workshop in June 2005, Art and Marta learned that running a B&B is hard work. "We got the cold hard facts on what it takes," says Art, who vividly remembers the 11-page outline of a typical 16-hour day. They also learned that the average inn costs $1.2 million and that if they want to derive an income, they need at least eight rooms. With the $300,000 profit from the recent sale of their house (they're currently renting), and an SBA loan, they should have enough to finance an inn of that size. They also have another $100,000 in savings set aside for working capital. But most innkeepers plow all profits back into the business, which means Art and Marta will have to adjust to living on a significantly lower income, particularly in the early years. They don't want to tap pensions or retirement savings for at least a decade. Can they do it?


Yes—if they can find an inn that's already profitable. Though there are some 20,000 B&Bs and inns in the U.S., the successful ones aren't often for sale. "Most of the properties listed have serious problems," says Howard Levitan, an owner of the Oates & Bredfeldt inn-keeping school. He suggests they start with a location they'd like to live in, and when they find an inn they like, estimate its net cash flow. This can be calculated using occupancy rate (which they can get by asking around), number of rooms and the average daily rate. If it looks promising, approach the proprietor. The average tenure of an inn owner is eight years, Levitan says, so they might catch someone looking to get out. Before buying, they must analyze the books to ensure its inn's revenue covers its expenses. Doing so will help them avoid having to tap their assets.

"But they still have a few areas where they need to protect themselves," says Fresno financial planner Mark Prendergast. He says the couple should get life and disability insurance and shop for health insurance before leaving their jobs. Once they do quit, they should take advantage of the drop in income to convert IRAs to Roth IRAs, which will give them tax-free income after age 59½. And just in case they find the hospitality biz isn't as rewarding as they'd hoped, he advises, they might want to keep up their contacts in the hospital biz.

Art and Marta are already putting all of this advice into practice. After finding that inns in the Pacific Northwest tend to lose money because of a short tourist season, they're now looking in New Hampshire, which has a nearly year-round market. "We want to have fun, but we still need to support ourselves," says Art.



Current (combined) ...$240,000

Expected pension (combined) ...49,800

Expected Social Security (combined) ...52,200


Money-market accounts ...380,000

Retirement: 403(b) plans ...278,000

IRAs ...160,000

CD ...25,000

Savings ...10,000

Home equity ...0


Debt ...0

Jetter's big dream boat could run her savings aground.

Before he can save the world, he needs to save a little harder in his 403(b).

She delivered a baby, stopped a kidnapping and fed James Brown. Time to put it all on paper.

It'll cost twice what they thought, and he could be axed soon. That'll make it tricky.

Marta and Art need to find a way to derive income from their business.