I’m not expecting readers to answer all eight of the thorny questions listed below. But I’d love to hear your thoughts on one or two.
- What in your past or about your personality explains your investment risk tolerance?
- What uses of money—giving it away, saving it, specific purchases—bring you the greatest joy?
- Would you be okay financially if U.S. stocks had a 0% total return over the next 10 years?
- If you’re still working, what would it take for you to leave the workforce with a sense of satisfaction? If you’re already retired, did you leave the workforce feeling like you’d been a success?
- What would you consider enough money, or will you always want more?
- What would give your retirement a sense of purpose, or will you be happy simply to meander through each day? If you’re already retired, what’s been the biggest contributor to your happiness?
- Who will look after you when you can’t, how will you pay for your care, and is there a risk that the cost will deplete your savings?
- Will your heirs be happy with the estate you leave behind—not just its value, but also the ease of settling your affairs and dealing with your possessions?
Jonathan, thanks for this thought provoking post. Some of these were truly thorny.
1) Dealing with my parents and in-laws finances approaching and in retirement had an enormous impact on my thinking and our retirement. I doubt I’d be commenting on HD today without those experiences.
4) I’ve spent a few days thinking about this one, and I’m still not sure how to answer it. I had the opportunity to work with many outstanding people, some still friends, and on some very cool projects. But the way it ended was not great, as I wrote here.
My moderate risk intolerance came from younger years heavy with uncertainty. Once in the right career, 60/40 was fine with me.
With Social Security checks coming through starting at age 70, I’ve got enough in fixed income to cover any non-bizarre expenses. Those last are unlikely since I’m “happily meandering through each day” in a low COL rural/small town region, enjoying a comfortable ranch house with a million-dollar view featuring wildlife galore.
My motto now is, the 40% equities in my current portfolio are for the survivors, and the 60% fixed income (half in a 5 year TIPS) is for me. In reality, the survivors will probably get a big chunk of the fixed as well. They’ll all be happy because it’s unlikely they’re expecting much; and while the amount won’t be life-changing for most, it will make all of them smile. If the equities return zero I won’t care.
I get a lot of enjoyment from giving them larger-than-expected Christmas presents, color green. One also gets surprise checks from time to time.
I’m grateful for the satisfying career I finally landed half-way through my working life, but before then and in other areas faced thorny challenges that weren’t so fun.
I’ve seen the world already, and regard modern air travel as the eternity people are sent to if they’ve been bad. So travel is not on the agenda.
When I can’t take care of myself I’m hopeful of finding one or two younger folks nearby who can help and could use the money, which I can easily afford in this low COL area. I don’t think I’ll want to keep living if it means being institutionalized.
Jonathan:
Number 1. This might sound pompous, but I hope not. I have always thought GOD had a purpose for me and goals HE wanted me to achieve, and HE would give me the time needed to accomplish those goals. HE would also give me the wealth to do good for my family and others HE placed in my path.
I have always been somewhat aggressive in investment outlook, and even in my retirement, once I secured our guaranteed income for life, though Social Security, by waiting until age 70 to file, and joint life annuity income, our remaining portfolio remains invested in equities.
Number 2. I have always felt good when saving money but nothing feels as good as giving it to others. I am now taking my RMDs as QCDs and I love writing out the checks from my Vanguard Account with my special IRA Checks.
Number 3. Would I be “OK”? Yes…because our income is 100% guaranteed income. Our Social Security Benefits have COLA and our annuity income is tax free, since the annuities were purchased with Roth Dollars. We are not taking withdrawals from our portfolio.
Now…would I be happy about it? Absolutely not!
Number 4. I retired 1-5-2024. I retired from my third career, academics, after 15 years. My two earlier careers, both in finance related fields, encompassed another 42 years.My final career gave me the greatest feelings of accomplishment, because I knew that I was responsible for the United States having thousands of better trained, more educationally qualified financial advisors, than would have been possible, without me. While working, it was always
Number 5. When I was working, it was much different than when I made the decision to retire. When I was working, “just a little more,” was my motto.
In 2023, when I decided I was retiring 1-5-2014, I set a goal for $1.2M. That was my “Enough” Number. When I reached that goal @ 10-1-2023, I used $450K to buy a series of deferred annuities, and let the balance invested in Vanguard ETFs.
Upon retiring, I moved $200K into cash/spending for early retirement and left the remainder in VTI and VXUS, where it remains today. With our retirement income guaranteed by Social Security & Annuity Income, and our portfolio not being used for income, we can ignore all the market volatility, secure in our income.
Number 6. When preparing for retirement, I am certain I read at least 15 books on retirement. Many of them touched on the idea of Retiring to something vs. Retiring from something.
At this point, 15 months into retirement, I have not felt the need to develop a “purpose.” I am still enjoying the rare feeling of that weight I carried for 57 years, of always striving to do better, to earn more, to be the best…and I am enjoying doing nothing. Literally, nothing.
Well, technically not nothing…I am reading, researching things I find of interest on You Tube. Catching upon movies I missed. Traveling some…in our first year we took 4 extended vacations of 10 day or more…and we are looking at going to Germany for Christmas 2025.
I would like to do some volunteering, so I am looking for some outlets for that currently, as well.
Number 7. I have a very strong LTCi policy and our home, built in 2018, is designed for aging in place. I am 74.5 years old. My wife is 4 years younger. She does’t have LTCi, because she didn’t qualify for a policy or a hybrid policy. Her care will be self funded, through our portfolio, and our annuity income. The annuities have a LTC rider or “doubler” associated with each of them. Our current annuity income would be increased to $54,780 for up to 5 years, and then it would revert to $36,520 for both/either of our lives.
Number 8. I have done everything possible to make it as easy as possible for my wife and our children, when we pass. We both have wills, POAs, Medical POAs, Living Wills and a Revocable Living Trust. The children will most likely each received over $500K each and our possessions are theirs to keep or dispose of. There, will be a bank trustee to serve with my executor, as she requests assistance. One of my children will not receive their inheritance as a lump some, and the trustee will relieve my other child from the responsibility of having to deal with the process of giving their sibling access to funds.