Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, January 26, 1992 TAG: 9201280468
SECTION: ECONOMY PAGE: 2 EDITION: METRO
SOURCE: MARK MORRISON STAFF WRITER
DATELINE: LENGTH: Medium
FUTURE SUDDENLY UNCERTAIN FOR EARLY RETIREE
Until last October, the slumping economy was of little concern to William and Gayle Sparrow.Years of steady employment, conservative spending and prudent money management made them feel on solid financial ground.
The unexpected turn was when William Sparrow became one of the growing number of management personnel caught in the windstorm of work force reductions. Downsizing of big businesses across the country is forcing out workers who had counted on many more years of secure employment.
At age 50, Sparrow was offered early retirement. He was working for C&P Telephone. As supervisor of electronic switching service at the company's central office in Roanoke, he never questioned the security of his job.
But today he's one of dozens of people in the Roanoke Valley who over the past year have had their financial security challenged by some of the region's major employers: Norfolk Southern Corp., USAir Group Inc. and the city of Roanoke.
Sparrow worked 25 years for C&P, the last 17 in Roanoke. He had planned to continue with the company for at least another decade.
Between his salary and his wife's pay as a teacher in Roanoke County - they were saving easily $500 a month, while not cutting back anywhere. The 1.7 increase in the cost of living index for Roanoke over the past year had gone unnoticed.
Sparrow says they have never needed a budget. "We know we live within our means, so it wasn't necessary," he said.
If they wanted to take a trip, they took it. If they wanted something or if their kids needed something, they bought it.
In April, for example, they bought into a time-share condominium on North Carolina's Outer Banks.
The recession had not yet hit home.
"We weren't scared," Sparrow said.
And even the prospect of early retirement didn't scare the Sparrows.
Now, however, the family's changed financial situation means facing some hard choices and much more uncertainity about the future.
Their family income, which they declined to reveal, was cut by more than a fourth.
At first, Sparrow didn't know what to do. The buyout was optional, but he said C&P has future plans to restructure its retirement and pension plan and he didn't know how that might affect him if he kept working.
And the buyout was appealing.
Sparrow was offered a pension based on 30 years of work, even though he'd been with C&P for five years less than that. Plus he could keep his health insurance coverage through the company. He also was given the option of taking the pension in one lump sum, in monthly installments or a combination of the two.
He chose taking the full amount at once. "I just wanted control over it, rather than having them take control over it," he said of the payout.
But before making that decision, Sparrow consulted several financial analysts, all of whom said he could afford to retire early if he wished.
Gayle Sparrow said: "If we can do it, go ahead."
The Sparrows live in a four-bedroom house at the end of a cul-de-sac in the Orchard subdivision in Roanoke County. It's a neighborhood where homes sell for $125,000 to $190,000.
Their car loans are paid off. They don't have any school debts, but their children - Ashley, 15, and Wayne, 12, likely are college bound.
In addition, they are paying on three mortgages. In addition to their home, the Sparrows own two houses in Roanoke as rental investments.
Taking early retirement, William Sparrow said, means they won't be able to save $500 a month anymore. But they still will be able to cover their expenses, which they estimate at more than $2,500 a month.
Meanwhile, Gayle wants to work at least another 13 years and William would like to start his own business doing odd jobs and residential and small business telephone wiring.
"I want to supplement our income, but not work a full-time job. A full-time job I had," he said.
He is confident, though, that the venture will be a success. "I'll see how it goes and determine if it's worthwhile," he said.
He expects work to come his way through community contacts he has made as a member of the board of directors at the YMCA and Total Action Against Poverty, and as a trustee at High Street Baptist Church.
Sparrow retired from C&P Dec. 15. He said it will be six months before he knows for sure if it was a good decision.
If his business flops or the recession deepens and money gets tight, he expects to look for a part-time job. If things get tight over the long range, Sparrow said the family can travel less or move to a smaller house.
These are options the Sparrows have had to discuss years earlier than they had expected. And although they are confident, they are among the people who worry about the economy. The future is more uncertain, he said .
"Now, we need to start budgeting."