She retired young, 49 to be exact, and made the big move from the dreary rain soaked Northwest to the land of palm trees and eternal sunshine. But all was not well, and the consequences of misguided judgment would soon come home to roost.

Annie had been in banking for 30 years, most of those years at that same stuffy old bank. So when the retirement party came around, well, Annie was ready. She had already picked the area of Florida that would become her new hometown, and was ready to make the cross country trek and settle into her new community.

She had carefully developed her plan with the guidance and help of her financial advisor, an experienced veteran of nearly 20 years in the investment world. She was rolling over her 401k, stuffed with the accumulation of 30 years of labor and investment, to an IRA. It would be prudently managed by her advisor. Everything looked rosy. It was 1999.

The first year went well. Annie settled in, busied herself with home and garden, met new friends, and rekindled her relationship with family members who had lived in the area for many years.

The first cracks in Annie's financial plan began to appear in less than two years. You see, Annie had no pension or other income so she relied on withdrawals from her new IRA rollover, worth well over one half million dollars when she retired. The plan was to draw income from the IRA at a fairly high rate until she reached age 62. She could then lower the IRA withdrawals because her income would be supplemented by social security retirement benefits. It sure looked good on paper.

But there was a huge flaw in the plan, and it began to show in 2001. The flaw was the financial plan did not account for a possible severe and long term 'Bear Market', and of course that's exactly what came to pass. This contributed to a very dangerous decline in Annie's account values, and a lot of sleepless nights for her as well.

What had gone so wrong? Unfortunately for Annie it was the 'perfect storm' of events. First, we experienced a severe 2½ year market decline early in her retirement years. Contributing to the calamity was the decision, made jointly by Annie and her experienced advisor, that it was OK to withdraw 7% per year from her portfolio for income needs. This was not a prudent decision. And finally, there was no backup plan for Annie's long term financial protection in case something didn't work out as planned.

This series of events resulted in Annie's account values being reduced from the original one half million plus to $374,000 by October 2002, which as it turned out, was the market bottom. And remember, this is the nest egg that must sustain Annie for another 30 plus years!

There is a happy ending to the story however. Annie's portfolio has recovered along with the markets recovery. But Annie's most important savior turns out to be a small business she bought in her new hometown. It captured her interest and she bought it more as a new endeavor to add to her life's' fulfillment rather than a money making plan. It doesn't produce a lot of income but it will go a long way toward providing a successful financial future for Annie. That's because the business includes a significant amount of real estate, and that real estate has appreciated in value a great deal over the last few years. When the time arrives the business and real estate can be converted to income producing vehicles like bonds, annuities, and mutual funds.

And what has become of Annie's financial advisor, the one who guided her down the path to near ruin? Well, I am that advisor, and through all the ups and downs Annie and I continue to maintain our relationship. We both learned valuable lessons from that experience, and I have used those lessons to become a better advisor; better able to help and serve my clients in ways that protect their financial interests throughout our journey together.