For years now Cheerios have been the most widely known breakfast brand in the United States. Everybody seems to have them in the pantry. When I was a kid my favorite breakfast was a bowl of cheerios with banana slices and sugar (LOTS of sugar). My Mom rarely bought the expensive sugary cereals like Fruit Loops, so I would sneak in some extra sugar into my Cheerios when she wasn't looking.
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Last week I met with a new prospective client. He's in his mid-50's and feels like it's time for him to retire. He had run the numbers and, I agreed, seemed to be in a good financial position. He had enough saved up in his 401(k), his company was providing excellent retiree health benefits, he had no debt other than a very small mortgage and Social Security would cover the vast majority of his monthly expenses. Financially speaking, he was all set.
He told me he had already interviewed 12-15 other advisors but just hadn't found the right fit yet. I knew some of the other firms he had interviewed, several of which enjoy great reputations. No doubt they would do a fine job investing his retirement money for him.
And, yet, he still wasn't retired and still hadn't hired an advisor. I couldn't help but ask a series of "Why?" questions. Why retire? Why now? What will you do? Where will you be? I don't think many other advisors bothered to ask him these questions.
Retirement is a major life transition and people are understandably cautious, maybe even a little scared. Once you stop working and that paycheck isn't coming in any more, it's now on you to make the money last. And if something goes wrong, it's difficult to return to full-time work at your old salary in order to fill in the gap. How to generate a sustainable lifetime income is a daunting task. And it can be even harder to know who to trust for financial advice.
But aside from the admittedly challenging financial issues that arise at retirement, I find the more important issues go far beyond money. Being comfortable with who we are and our place in the world can mean the difference between a truly meaningful retirement and a mere existence.
If you're thinking of retirement, don't just stop at the financial questions. Dig deeper and seek answers to questions of true meaning. Start with these 5 questions:
Are you retiring to something or from something?
What's really driving this decision at this time? Is this part of a long-planned for transition, or has this suddenly been thrust upon you by a change outside your control? It's OK to say you need more time to digest all of this.
How will you use your time?
For the past 30+ years you've had obligations. Marriage, children, work, clubs, organizations, places of worship, etc. Your time was often spoken for. Now what? Do you really know what you're passionate about?
Money is just a tool; how will you use it?
They say money doesn't change you, it simply reveals who you are. Now you have both time and money on your hands. Are you scared yet?
Who are the important people in your life?
If retirement means spending time with kids and grandkids, great. If it's hanging with friends, great. If it's making new friends via a new hobby, great. If it's work friends, be prepared to work hard at remaining included. These are all perfectly good answers. Just make sure you know what the right answers are for you. And you'd better be darned sure that you and your spouse are on the same page about this whole retirement thing.
What will your legacy be?
How will you combine your time, money, talents and values to shape those people and places who shaped you? What lessons and values do you want to demonstrate to those who come after you?
Retirement can be the most rewarding phase in one's life. Many of our clients are enjoying amazing new adventures and relationships, even as they approach nearly 30 years of retired life. The best time to think about these questions is long before a looming retirement decision. Make sure you carve out time to consider what really matters to you, and then structure your retirement to leverage your newfound freedoms.
Ten years seems like a long time to measure an investment. But which ten years you measure can make a tremendous difference.
As America continued to recover from the COVID-19 pandemic in the first half of 2021, the economy and the equity markets made significant progress. My midyear report to you is, as always, divided into two parts.
FOMO or "Fear of Missing Out" seems to be driving a lot of money discussions these days. Whether it's hoarding Bitcoin, multiple homebuyers making bids over asking price on houses, or day trading in "meme stocks" like GameStop and AMC it's clear that a mania is building in the minds of the general public. When these manias end they will leave investors looking the same way they always do...FUBAR. If you're not familiar with the term, ask your military friends.
Famous philosophers back to Aristotle have extolled the virtues of walking to stimulate creativity, mental clarity, happiness, focus, and fresh perspective. Turns out this ancient practice could benefit your investment portfolio as well.
Cryptocurrencies like Bitcoin and Ethereum receive vast amounts of attention from the media, with most headlines touting the incredible price swings in these "investments". As useful as these may eventually become as a means of exchange, they are not investments ; they are merely "speculations". Retirees who don't understand the difference are putting their retirement portfolios in jeopardy.
Inflation in the US economy is real, and likely to get worse. Those wishing to better understand what inflation is and how it affects retirees can reference my May 11 blog post.
If you live in certain portions of the Midwest and Atlantic coast, you're probably dealing with a terrible swarm of nasty bugs right now. These bugs appear periodically, preying on innocent people. Overcome with fear of these horrible creatures, some are no longer able to enjoy time with friends and family. Instead, they huddle inside by the TV waiting for the next dire report to be published about the destruction sure to ensue.
Just when you thought the stock day trading mania couldn't get any worse, Fidelity Investments decides to help teenagers day trade stocks by rolling out the "Fidelity Youth Account". You can read about the whole silly concept here.