I'M TOO EMBARRASSED to reveal how long it took my wife and me to prepare our wills. We knew this important task was near the top of almost every financial “to do” list—a list that, it seems, we’ve spent our adult lives slowly working our way through. We’d discussed the details of our wills, including the crucial decision of who would care for our minor child in the event both of us died. Despite this, we procrastinated. When we finally met with an attorney and signed the papers, it was a relief to mark it off the list. While we were at it, we drew up advance directives to allow others to make legal and medical decisions for us if we became incapacitated. These documents let us have a hand in those decisions by making our wishes known beforehand. I’d learned from my father’s final illness how advance directives can ease a family’s burden during an already-stressful time. I also added letters of instruction to help my family settle my affairs. Included in these are legacy letters with the words of love that I want my family to remember me by. The reality is, most of us aren’t thinking or speaking clearly at the time we leave this world. I’ve put my thoughts on paper now, before dementia or serious illness renders me unable to. What else has been on our to-do list? One of our running family jokes is that it’s okay to die, just don’t get sick or sustain a serious injury. As a precaution, I’ve always had some disability insurance through my employer, though probably not enough. A severe medical problem can be a double whammy to a family’s finances. Earlier in our adult lives, a loss of one income, plus a boatload of medical expenses, could have sunk us. Now, we can fall back on our investments, but we probably weren’t smart about the amount of risk we took earlier on. On the other hand, we made a good decision when our daughter was born. My wife and I each bought term life insurance. Our goal was to cover the loss of income if one of us died. At the time, my wife and I worked side by side at the same physical therapy clinic. Because we drew essentially the same salary, we purchased policies with equivalent death benefits. My wife went part-time after the birth of our daughter, and then to one day a month a few years later. Even so, we’ve kept the original policies. Her current income is just a fraction of the previous amount, but her value to our family is huge. I want sufficient coverage to replace part of the contribution she now provides. The policy premiums have bought us both peace of mind. [xyz-ihs snippet="Mobile-Subscribe"] We’ve made some other wise moves—which perhaps balance out some of our earlier negligence. Most important, we’re in the habit of spending less than our income. Among other things, that provides us cash for unexpected expenses. Our emergency fund keeps us from having to reach for a credit card to pay for a new water heater or major auto repair. Controlling our spending also lets us save money for retirement. Even so, we could have done a better job if we’d started earlier. We delayed investing until our mid-30s. By showing up late to the starting line, we potentially missed out on a decade or more of compounding. A timelier start might have given us a more comfortable retirement and perhaps even the option to retire early. At this juncture, we’ve paid off all debt. We wanted to lower our fixed costs, especially as we look ahead to retirement. Some argue you’ll make more if you invest any extra cash. That may be true. But for us, there’s no debate. Even if it’s not always the optimal choice, we’d rather be debt-free. We think that eliminating debt lowers our overall risk. In addition, we strive to give away part of our income. We try to be thankful for what we have, and to show it by giving to our church and to those in need. Our family’s plan for managing our finances and the risks we face has been a work in progress, but it feels like we’ve finally made it through the to-do list. The pieces are now in place, but they didn’t get there all at once. We’re just glad a calamity didn’t befall us when one of the pieces was missing. Ed Marsh is a physical therapist who lives and works in a small community near Atlanta. He likes to spend time with his church, with his family and in his garden thinking about retirement. His favorite question to ask a young person is, "Are you saving for retirement?" Check out Ed's earlier articles. [xyz-ihs snippet="Donate"]

WHY DO SOME PEOPLE save more for retirement than others, even when their income is the same? It turns out that a difference in spending behavior, rather than a larger salary, may separate better savers from those who struggle to set aside funds for their future. The Employee Benefit Research Institute and J.P. Morgan Asset Management joined forces to examine the spending and saving behavior of 10,000 households. The households, which were analyzed by age cohort, were divided into three groups based on the percentage of salary each contributed to a 401(k) plan. In the bottom 25%, low savers sock away about 2% to 3% of their income. Middling savers—those in the middle 50%—save about 5% to 6%. High savers, in the top 25%, start by contributing about 9% of salary and increase that amount as they get closer to retirement. The researchers then compared the salaries of low and middling savers, and found that the two groups earn about the same. Yet, even though there’s only a small difference in salary between low and middling savers, at all ages middling savers sock away about three percentage points more toward retirement than low savers. This difference is meaningful down the road, as the two groups approach retirement age. Compared to low savers, middling savers accumulate twice as much by age 60. What drags down low savers and keeps them from achieving the same results as middling savers, who earn an equivalent salary? The answer is spending. Low savers spend about 2% to 3% more of their salary than middling savers, especially when they’re younger. This difference in spending may account for the additional savings that middling savers set aside for their golden years. The bulk of the difference consists of increased spending on housing, transportation, and food and beverages. Throughout their working years, low savers consistently spend more on these three categories than middling savers. Spending on other needs, such as education and clothes, is similar, while low savers spend slightly less on travel compared to middling savers. It seems that, for some workers, spending is the culprit siphoning off money that should be used for savings. But it isn’t clear what’s driving this higher spending. Is it a desire to satisfy today’s immediate wants, such as a fancier car or pricey restaurant meals? Or do the necessities of life just cost more for some people, and therefore hamper their ability to save?

PHYSICAL THERAPY IS a teaching profession. I am the teacher and my patients are the students. They come to me with a problem in need of a solution. I help them find the answer. Most of my patients have never faced the daunting challenge of overcoming a physical disability caused by injury or disease. They don’t know where to begin. Many have also never put in the sustained effort needed to achieve a tough goal. I’m tasked with teaching them both—giving them the knowledge that they need to get where they want to go and encouraging them to put forth the effort required to get there. I know how they feel. I had never really settled on a serious career goal until my early 30s, when I decided to return to college to train to become a physical therapist. At about the same time, I decided to become an “expert in investing.” I didn’t know at the time what that meant, but I figured I needed to be one so I could retire one day. I did know that I knew nothing about investing, and would need to begin from scratch. But first, physical therapy. I learned the basics, about muscles and joints, nerves and organs, and about the chemistry of the body. I went on to learn how all the parts work together to produce movement and allow us to interact with the world around us. Finally, I learned treatment strategies to help restore the bodies of those who need physical therapy to regain what they’ve lost because of a joint injury or a stroke. I landed my first physical therapy job at age 36. I didn’t know it then, but I was following the centuries-old, three-stage classical model of learning. In the grammar stage, the basics are learned through memorization and review. In the logic stage, the individual parts are put together and put into practice. In the rhetoric stage, the student is ready to share knowledge with others. I think about this three-step process when I’m treating patients. Let’s say that disease has left a person a little too weak to get up from a chair by herself. She has done this seemingly simple task all her life without thinking about how she does it, and can’t figure out why it has become so complicated. Standing up from a chair is a big goal for her. It’s the beginning point so she can get on with the rest of her day. She looks to me to teach her how to make that first big move. [xyz-ihs snippet="Mobile-Subscribe"] Initially, we work on the basics—learning the right exercises to strengthen the right muscles and how to reposition the body to gain a mechanical advantage. We move on to putting that knowledge into practice, and one day she rises independently from sitting to standing. She has an epiphany. What was complex becomes simple. The next thing you know, she’s teaching her friends what the nice PT taught her. Is she an expert in physical therapy? No, but she doesn’t have to be. She knows just enough to achieve her goal. I followed this same classical learning model when I turned my attention to becoming that investment expert I so desired to be. The most important basics I had already learned from my parents. I was a good saver and a frugal spender. These behaviors allowed me to max out contributions to the 401(k) that came with my first PT job and, soon after, my first IRA. Along with my wife, I continued to learn basic information by taking a community college night course in personal finance and through reading some books and online material. We both learned about the importance of diversification, proper allocation and low investment fees, and about the astounding results of compound interest. Over the course of several years, we learned to put this information into practice by choosing low-cost, broad-based index funds for various asset classes. As the years went by, we saw our knowledge and our portfolios grow. I had my own epiphany, and again the complex became simple. I eventually realized that I knew enough to show others the right path to take them a long way toward retirement. Twenty-four years after making my first investment, I am perhaps four or five years from full retirement. I am in the midst of my current education project, learning the best strategies to generate income and save on taxes during retirement. My wife, also a PT, is down to working one day a month, but spends many long hours helping family members who depend on us. Have I become that investment expert I thought I needed to be? Hardly. But like my patients, I don’t have to know all there is to know. Instead, I need to know just enough to achieve my retirement goal. Ed Marsh is a physical therapist who lives and works in a small community near Atlanta. He likes to spend time with his church, with his family and in his garden thinking about retirement. His favorite question to ask a young person is, "Are you saving for retirement?" [xyz-ihs snippet="Donate"]

I'M THINKING ABOUT retirement—again. But this time, it isn’t my retirement, but rather my wife’s. I earn our family’s primary paycheck, so I’m usually the focus of our discussions when we sit down to scrutinize the numbers and comb through the calendar, looking for a date when we should each hang up our physical therapist’s goniometer. Even though I earn the bigger income, my wife has diligently worked just as long as I have, albeit in a changing capacity. In our 30s, we each began second careers as physical therapists at more or less the same time. I talked her into a blind date the week I started my first physical therapy job. She graduated PT school a couple of months later, and began work shortly thereafter. For five of the first seven years of our marriage, we spent most of our work days side-by-side in the same outpatient clinic. After our daughter was born, my wife’s hours on the job dwindled, while her responsibilities at home increased. On weekdays, she now applies her experience as a former high school biology teacher to instructing our daughter at home. On top of that, she acts as caregiver to family members, including round-the-clock on-call assistance for any needs that arise. And then, of course, there’s the usual tasks involved in keeping up a home. I help, but the brunt of the burden falls on my wife. Despite her hectic schedule, my wife continues to make a small but significant contribution at our workplace. She gives a few hours each month, plus some holidays, at our acute care hospital. Every few months, I ask if she’s ready to retire from her work away from home. My question brings a thoughtful expression, then the same reply of “not yet.” Our ongoing conversation about our respective retirement dates would have been rare a couple of generations ago. Planning for a joint retirement is a fairly recent phenomenon. Retirement planning was once a mostly solo endeavor, even for married couples. In most families, the husband was the sole breadwinner. The income side of the family’s economic life revolved around his career, with the wife playing a supporting role. The latter part of the 20th century witnessed a huge demographic shift. Women started pouring into the workforce. The percentage of women working doubled from 34% in 1950 to 60% in 2000. Last year, the figure stood at about 57%, and was even higher, at 60%, for women in the pre-retirement ages of 55 to 64. With dual incomes came a new challenge for couples—how to coordinate two retirements. Researchers note that retirement is increasingly complex, with variables that include when to call it quits, whether to move or not, how to use our time in retirement, and the implications of declining health. Doubling those factors with the addition of another person compounds the planning intricacies. Not all couples are adept at this financial dance, though they may not readily admit it. Seven out of 10 respondents to Fidelity Investments' 2021 couples and money study say they communicate at least very well about financial issues. But a deeper look at specific retirement topics reveals 48% disagree on the retirement date. Also, 51% are out of sync on the size of the nest egg necessary to retire, and a significant number lose sleep thinking about it. Additional worries are retirement health care expenses, outliving savings and being derailed by economic conditions beyond their control. The Fidelity survey also found gender continues to influence the planning partnership, with men more frequently taking the lead on longer-term retirement and investment planning. But in our case, the situation is more nuanced, because my wife has more of the planner personality. Against this backdrop, my wife and I dance to our own beat. Still, we’re not far out of step with other couples as we ponder if we’re retirement ready. We share the familiar financial concerns about income and insurance during retirement, along with the subjective query: Will retirement make me happier? I’m not yet ready for a permanent vacation, but how does my wife answer those questions? Income. When we launched our life together, my wife and I earned essentially the same amount. We also both started saving and investing for retirement with our first paychecks, kicking it off with 401(k)s and then soon adding IRAs. In the beginning, though, we followed different paths in choosing our funds. We even compared performance in a friendly competition. Eventually, however, we came to view our individual accounts as part of the same portfolio, a perspective that aids optimal planning. While I tend to take the lead in longer-term planning, my wife is thoroughly versed on our overall money plan and intimately involved in every decision. She also handles the daily money chores, and knows how much money flows in and out of our household accounts. For these reasons, she’s aware that the loss of her income wouldn’t create financial headaches. Insurance. My employer currently provides health insurance for my family and me. Even if I go part-time, we’re still covered. If I decide to retire fulltime at age 65—a little over three years’ away—Medicare will insure me. But at that juncture, my wife will be 62 and not yet eligible for Medicare. We’ll need to buy a private policy for her and our daughter, which we may pay for with my wife’s Social Security. According to Mike Piper’s Open Social Security calculator, 62 is the best age for her to claim, with me waiting until age 70. Emotion. When our young lives are weighed down with work, and retirement is a distant dream, it’s hard to imagine postponing the day we call it quits. Yet, when the moment arrives, the choice can bring indecision and even trepidation. The path ahead may appear greener, but who knows how much we’ll miss what we leave behind? My wife and I have a good bit of the interdependence—a “melding of the minds” in a relationship—that’s shown to be helpful during the shift to retirement. Still, I’m giving her room to decide when to give up her paycheck. Initially, she held onto her few hours of work as a caution and a comfort, just in case my income disappeared. Keeping a foot in the door would have allowed her to jump back in more easily. That concern should have faded as our savings grew, but old habits often die slowly. Maybe there’s still a sliver of uncertainty lurking in her mind. Her real hang up may be her feelings of guilt about leaving me to carry the weight by myself. But the weight isn’t solely on my shoulders. How does she retire from being a daughter, wife and mother? Even when she finally leaves her job behind, she’ll still only be half-retired. Ed Marsh is a physical therapist who lives and works in a small community near Atlanta. He likes to spend time with his church, with his family and in his garden thinking about retirement. His favorite question to ask a young person is, "Are you saving for retirement?" Check out Ed's earlier articles. [xyz-ihs snippet="Donate"]

After years of retirement planning, the day has indeed arrived—almost. I’ve recently become a part-timer, working just three days each week in the outpatient physical therapy clinic, plus one Saturday per month at the acute-care hospital. Though I may be just semi-retired, the load already feels a whole lot lighter. How so? For starters, I’m focusing less on gaining more from my job. Oh, I’m still keen to treat patients. That’s what drew me to physical therapy in the first place. But I’m stepping back from the sundry other jobs that have attached themselves to me. Instead, I’ll nudge the younger folks toward new responsibilities as I concentrate on giving my best to a shorter schedule. How short? I’ve trimmed my three workdays to eight hours each, with afternoons free for other pursuits. My brief week of short days feels like a perpetual weekend, with its mix of work and play. There are trade-offs, of course. Shorter hours leave me with less earned income. In exchange, I get more disposable time. How to spend it?  Home provides plenty of projects. My list is long, from a bedroom and bath renovation inside to demolishing and resurrecting storage buildings outside. Though I enjoy both the planning and the labor, I’ll probably employ a hybrid of do-it-yourself and hired help. Other tasks–like breaking up the concrete footing and floor of the old chicken house I tore down two years ago–I’ll have to tackle myself. There is little room for equipment, and manual laborers are scarce. My garden beckons as well, especially the vegetables. From the peas I plant in January to the tomatoes of summer, I have vegetables in the garden and on the table every month of the year. That’s not a boast, just the product of my passion for nurturing plants to grow and yield fruit, and my family’s appetite for their taste.  My wife reminds me, however, that work shouldn’t consume all our retirement time. She’s ready for some leisure, especially travel. Alas, there’s a hitch to her plans. Our mothers are closing in on the century mark. Each continues to live in her home, which we fully endorse, but require help from us. As a result, our wandering is tethered by familial responsibility. Between family pulling one hand and the lure of play the other, where’s the balance as my wife and I seek to find fun together? We’ve found part of the answer close to home. For the last couple of decades, my wife and I have sacrificed our shared time to donate to busy, separate schedules. We are ready to reclaim that time, beginning with sunrise walks on my days off work. The exercise is moderate, but the conversation supplies substantial emotional nourishment. I’m reminded of the “windshield time” of a long drive together.  For real food, we’re venturing farther afield. We both love a good barbeque joint, but our standard meal is heavy on lighter fare. Since quality restaurants are scarce in small-town Georgia, especially those that serve the kind of fresh ingredients we prefer, we’re prepared to drive. After polling friends, we compiled a list of restaurants to check out in the surrounding communities. We’ve heard of married couples scheduling “date nights” to get a break from home life, but we have never indulged–until now. If our local plans sound unambitious, then so will our travel itinerary. Yes, we’re now just partly-employed, with a lot more free time to devote to one of my wife’s loves. But as I indicated above, we feel bound to stay near home. We figure a five to six hour drive is the limit of our leash. Rather than sit home and sulk, we’re determined to ferret-out enough fun within this perimeter to keep us busy until our circumstances change. Our first area of focus is the locale where our daughter attends college. Her school sits atop a mountain overlooking the small city where my wife found her first physical therapy job. We’ve moved a few hours away, but make annual return trips. We've sampled nearly every attraction on offer there, but our current plan puts us on the hunt for different game.  Our new strategy calls for frequent, short trips to create an extended, intermittent vacation. Our main base is a cozy Airbnb with enough amenities to feel like a second home. It lies in a quiet neighborhood, 15 walking minutes from an ice cream shop and a few restaurants, and a short drive from dozens of others.  But its best feature is proximity to miles of hiking trails. A five-minute stroll puts us on a trail up the mountain. From there, we can choose to loop back to our start in an hour or two, or make a day of it. We can even wander over to the college campus for a chat with our daughter.  For my daughter’s Easter break from classes, we traveled to our new spot to keep her on site to prepare for final exams. We did most of the hiking while she did all of the studying, but one morning the three of us drove across town for a few hours’ scrambling over boulders beside a cascading stream. I won’t say the walk was on par with the wilder trails we’ve trod, but on the trip back to our lodging we stopped to dig into a decent Mediterranean lunch. This style of hiking has its appeal. Our new lifestyle may be termed “retirement-lite” by folks who have permanently replaced their work schedules with weekday tee times and travel plans, but it fits us well. It affords me a measure of the work that soothes my psyche, while providing my wife with temporary relief from her travel itch. And it gives us both more of the element that has been missing from our lives for too long–time with each other.

THE NATIONAL Aeronautics and Space Administration (NASA) has good reason to boast. Its programs serve as a catalyst to generate billions of dollars of economic activity that’s spread across all 50 states and the District of Columbia. Also, the transfer of NASA spinoff technologies and products to private businesses improves the lives of each of us in myriad ways. Along the way, it’s even put men on the moon—and plans to do so again, along with the first woman. A couple of years ago, NASA released a comprehensive analysis of the economic impact the space agency has had. It estimated that NASA’s 2019 budget of $21.5 billion spawned $64 billion of economic activity, and supported more than 312,000 good-paying jobs nationwide. In addition, the work of NASA engineers touches all of us. Whether it's an omega-3 fatty acid in baby formula or the memory foam that helps our aging bodies sleep well at night, there’s a good chance that NASA knowledge benefits us every day of our lives. In 2019 alone, the work of the agency’s personnel generated 85 new patent applications, and 122 new patents were approved. Many of these innovations eventually find their way into private businesses and American homes. NASA makes a strong argument for the economic benefits that accrue to Americans through its efforts. But as great as they are, I think there’s another economic star to celebrate in our lives—one that’s arguably delivered even greater financial benefits: the index fund. Its results have been an epic success since its introduction in 1976. The total amount invested in passively managed index funds eclipsed that in active funds for the first time this year, and for good reason: They outperform them. A recent report found that 95% of actively managed large-cap stock funds lagged their benchmark index over 20 years. A big reason index funds perform better is because they charge so much less, allowing investors to save an astronomical amount of money. Index funds helped us avoid a cumulative $357 billion in fund management fees from 1995 to 2020, according to S&P Dow Jones Indices. Their low expense ratios also put downward pressure on the fees charged by active funds, which have fallen 34% since 1996, according to the Investment Company Institute. Accumulating sufficient savings for retirement requires a massive effort, and we need every advantage we can get. The low cost of index funds helps us keep more money within our own orbit—and out of the pockets of active fund managers. That cost savings is a crucial part of the compounding that multiplies our money so it can support us in our later years. NASA is amazingly complex. Index funds are wonderfully simple. Yet, in their own way, they each deliver stellar results.