Meet Bob.

Bob is married to Agnes. Bob and Agnes have been married for 40 years.

They have three well-adjusted kids, all of whom they put through college. They have six grandchildren, each of whom has a college fund that was started by Bob and Agnes.

Bob is 66, and Agnes is 64. After a productive and fruitful working life, they are ready to retire. They have no idea what that means, but they are feeling pretty good.

Together, they have saved about $1.2 million. In addition, Bob’s Social Security benefit will be around $30,000 a year, and Agnes’ will be around $20,000.

They are currently spending around $120,000 a year to live and have been under the impression they would be able to maintain very close to that during their retirement.

Bob and Agnes go to a financial planner to confirm their plan and find out the best way to achieve the results they are seeking. His name is Dick.

Dick recommends that they start taking Social Security as soon as possible. He reasons that they have to live well into their 70s to get to the break-even point, and by taking more money up front, they will be able to grow their nest egg more.

Dick believes he can conservatively get them between 8 and 10 percent rates of return, and he believes they will be able to safely pull around 6 percent a year from their savings, with a 3 percent inflation adjustment each year.

After all, the market has been growing dramatically over the past couple of decades, and it looks like there is no end in sight.

So Bob and Agnes are on their way. The next year, they receive about $50,000 a year from Social Security and another $70,000 a year from their investments, and retirement is grand.

Bob has an old $500,000 life policy with about $40,000 in cash value that he is tired of paying premiums on. So he decides to cash it in and take the whole family on a European trip. That’s one none of them will ever forget!

And why not? He is, as he likes to remind Agnes quite frequently, a millionaire. The date is September 11, 1999, and the stock market is booming with no end in sight.

By the end of 1999, everything is still going strong, so Bob and Agnes purchase that condo in Florida that they’ve always wanted. Their wealth continues to grow and is now at around $1.44 million, in spite of the extra $30,000 they had to take out for the down payment on the condo.

With all that extra money they keep earning in the market, it seems that they will have enough for anything they want. Retirement truly is grand!

• n n

It’s two years later – everything has changed. No one could have anticipated this! The world came to a standstill as the horror of Sept. 11, 2001, unfolded.

People were certain the United States was under attack. Planes were grounded. Troops were called up. The president remained in Air Force One on a war footing, and the vice president was in the White House bunker contemplating shooting airliners out of the sky.

These years are disastrous for Bob and Agnes. Their portfolio has dropped from a high of $1.44 million to about $722,000. Fifty percent gone in just two years!

That Florida condo is a real drain, and they are finding it very difficult to cut back, especially since their oldest son lost his job and the family is now living in their basement. It was either that or end up on the streets. No one is real happy about it, but you do what you have to do.

One good thing has happened, however. He followed Dick’s advice, left his money in the market when he really wanted to pull it all out.

The market has started to rebound, but Bob is worried the $85,000 it’s costing to live every year is going to weaken his ability to rebound with it.

But it’s holding steady, and as long as the market continues to hold, they should have enough to get by.

A year later, it’s 2008, and the sky has fallen. Not only is what’s left of his portfolio way down – to less than $400,000 and sinking – but he is underwater in both his houses.

They’ve had to let the Florida condo go because they simply can’t afford the payments any longer.

They don’t dare sell their residence, as that has lost a huge amount of value as well. Anyway, if they did, where would they live?

• n n

Meet John.

John is married to Barb. John and Barb have been married for 40 years. They have two great kids and four grandchildren.

Together, they have saved about $1.4 million. In addition, John’s Social Security benefit will be around $30,000 a year, and Barb’s will be around $20,000.

They are currently spending around $120,000 a year to live and have been under the impression they will be able to maintain very close to that during their retirement.

After all, they are millionaires, aren’t they?

The date is Sept. 11, 2015.

“Free Money Guy” Stephen Kelley can be heard, along with his co-host Mark Perkins, on the Free Money Radio Hour at 9 a.m. every Tuesday and Wednesday morning on 1590 AM WSMN in Nashua, and Sundays at noon on 980 WCAP in Lowell. In addition, Steve is heard weekly on the nationally syndicated “America Tonight” with Kate Delaney and is author of the book “Safe Harbors That Can Reduce Taxes, Remove Risk and Protect Your Retirement.” His financial planning practice, Safety First Financial Planners, is at 33 Main St. in Nashua. He can be reached at 881-8811.

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