The ‘Other’ Truman Doctrine or What We Can Learn From Harry S. Truman’s Retirement Planning

The ‘Other’ Truman Doctrine or What We Can Learn From Harry S. Truman’s Retirement Planning

When we rank the presidents from richest to poorest, Harry Truman inevitably ends up at the bottom of the list.  He didn’t come from money, didn’t have a profitable career, and left the presidency before the days of presidential pensions and speaking engagements.

Despite his low net worth, Truman was intent on being successful in retirement. He embarked on a three-step retirement planning approach that is a good blueprint for many Americans to follow.

1. Income should be layered like a cake – Having fought in WWI, Truman was eligible for a $112.56 a month pension, but this wasn’t enough to cover the bills. Since he didn’t want to be seen as “cashing in” on his presidency, he turned down a number of opportunities offered to him. As a result, he had to think creatively to generate a retirement income stream.

In 1953, Truman signed an agreement with Life magazine for his memoirs. In structuring the deal, he felt he’d be best served by creating another pension income stream, so instead of a lump sum payment, he opted for Life to pay the $600,000 over six years.

2. Understand your longevity in your planning - In 1953, the average life expectancy was 66 yrs. for men and 70 yrs. for women. When he left office, Truman was 69 and his wife Bess was 68 years old. Thus, when he signed his agreement for $600,000 with Life magazine, as an installment payout over six years, he likely assumed that this would be a sufficient layer of income to cover them through their retirement years. 

As it turned out, both Truman and Bess lived beyond the average life expectancy. Fortunately, his precarious financial situation motivated Congress to institute a pension program for former presidents.  So he got a second predictable income stream in the latter half of his retirement. [1]

3. Keep active and engaged but live within your means – Truman refused to join boards or take commercial endorsements as he saw them beneath his status as a former president. As a result, when he left Washington, he didn’t upgrade his lifestyle, but returned to his modest house in Independence, Missouri and lived the way he had before becoming president. He was often seen around town, taking his daily constitutional and visiting his favorite places.

But he did splurge once in a while in retirement. After leaving office, Truman and Bess bought a 1953 Chrysler and embarked on a 2,500-mile road trip to New York City. They took in a Broadway show, went out for dinners with friends, and did some shopping. And while they enjoyed these moments, such indulgences were just occasional treats, rather than a lifestyle.

The Trumans’ retirement blueprint shows us that it’s not simply about net worth, but about maximizing available opportunities to ensure a comfortable and happy retirement.

 

Notes

[1] When the presidential pensions were started during the late Eisenhower administration, there were only 2 retired presidents – Truman and Hoover. Hoover was incredibly wealthy but took the pension so as to not embarrass Truman who needed it.

[2] A fun read on Truman’s post presidency journey to NYC is “Harry Truman’s Excellent Adventure: The True Story of a Great American Road Trip” by Matthew Algeo.

“Eisenhower Defeats Truman” and Other Such Tax Talk

“Eisenhower Defeats Truman” and Other Such Tax Talk