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?
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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.
These are all great questions. I’ll take a stab at answering three.
#4 – I retired in January 2023 and consider my career a success. I had two employers, each for about 21 years. When I wasn’t a specialized individual contributor, I managed a small group (but was not very good at it). I consider it a success because (1) I produced work valuable to the companies and was well respected by my colleagues and (2) I earned enough money to provide a nice life for my family and a comfortable retirement.
#5 – To me, having enough money is when you have financial independence, i.e., are free of financial worry. I would welcome having more money but am not interested in sacrificing anything to obtain it.
#6 – The biggest contributor to my retirement happiness is planning and partaking in 1-2 big adventures each year, like summiting Mount Kilimanjaro and hiking the O Trek in Torres del Paine National Park in Chilean Patagonia. I feel great joy planning, preparing for and executing the adventures. Playing with my two grandchildren comes in a close second!
#3 – given very low inflation and dividends maintaining current rates I could handle 0% growth.
Question 2: We accumulated a sizable (at least for us) investment portfolio in retirement. We live off of my pension and our SS and rarely dip into our savings. But we make substantial contributions to our church and other charitable causes. Also, we have contributed to our granddaughters’ college, and this past year gave our 2 children $15k each after having a tremendous investment year in 2024.
We are not big consumers, but I find great pleasure in make these contributions. There are so many worthwhile causes out there and we try to be generous in this regard. We are blessed and want to share our modest wealth.
Jerry…2024 was our first year in retirement.
You might recall that Hurricane Helene devastated Western NC. It also did serious damage near the NC Coast, and especially near Wilmington. I planned to begin giving our kids $10,000 annually starting in 2024, but ended up giving them $5,000 each and gifted a total of $26,000 (Including our RMDs as QCDs) to charities assisting NC folks who lost everything.
Going forward, in those years when the market increases, the kids will benefit. Meanwhile, I will be giving them at least $5k annually. Since we have no grandkids, we support a number of animal charities, as well as a number of “people” charities!
Like you, I receive great pleasure in giving to worthwhile causes.
I think this man has found the secret to a successful retirement. Like Jerry, We live off of social security and an annuity I purchased with retirement funds. I try to invest in what I think are the best investments. I have never taken money out of the market.
1 I’m assuming by risk you mean stock market volatility, and risk tolerance as the amount of your portfolio dedicated to stocks. For much of our investing life we maintained a fairly high stock market exposure. However, we are fairly risk averse. We managed this by understanding that financial risk is properly defined as anything that can prevent you from meeting your financial goals. As such investment time frame is an important component in identifying risk. Essentially, we internalized that inflation is a long-term investment risk and volatility is a short-term risk (If you’re dollar cost averaging and adjusting your asset allocation properly during your accumulation phase, volatility is also a long-term opportunity). Knowing that and having an asset allocation that takes into account near term and long term financial needs makes things very easy with respect to risk tolerance.
2 Spending on experiences is what we most enjoy.
3 yes
4 N/A
5 While we would always take more, we are at a point in our lives where we are not willing to do what is necessary to get more. We have better things to do with our time than pursue more money.
6 My wife and I enjoy pursing goals we didn’t have time to pursue during our working years. Glass blowing, getting that pilots license, volunteering, etc.
7&8 – we’re relatively young and still sorting that stuff out.
Thanks for asking the questions Jonathan. I pray you are doing well with your health and making the most of each day. I’m praying for you my friend. Let me take a crack at some of them:
1. My risk tolerance is probably due to life experiences. At one point I was very conservative. Today I don’t mind taking a reasonable amount of risk, but I still consider myself to be conservative.
2. Giving money away is by far and away the most rewarding thing we have ever done with money.
3. The stock market is going to do what the stock market does. Good or bad we have no choice to accept its results if we choose to participate.
4. I retired during the COVID debacle. I loved my job, but was only going to put up with some much from Uncle Sam my employer for 38 years. Near the end it got so bad that I was glad to retire. So I did earlier than planned. I absolutely was a success in my career. I led our office and most of our agency in productivity for more than 3 decades. When I retired (years before I had planned), we were financially stable and now four years into retirement we are making as much money as before retirement. God is good!
5. We have enough money. More would be nice, but we are CONTENT! We are grateful for what we have. If I had more perhaps I would deny God. However our trust is in Him, not the stock market.
6. One of the greatest contributors to my happiness in retirement has been to help care for my wife’s uncle who lives alone and is 89. He still prepares his own meals and bathes himself, but I’m able to shop for him, help clean his apartment and do his laundry as well as take him to doctor’s appointments. This is a joy for me. And I’ve been able,to pursue lots of fun things as well like travel, ski and just plain goof off on a regular basis. Life is good. 😎
7. God has taken care of me for 64 years and I’m confident He’ll care for me til the day I die. I don’t know the specifics, but I don’t worry about it either.
8. My wife and I have done what we think is a good job in estate planning. We have two grown children and four grandchildren and neither of our kids have ever asked us for a dime. We are happy to give to them and their children as we can and I KNOW they will both be blessed and very grateful for their share of their inheritance.
The responses so far have been wide ranging and interesting. Nice prompt!
1- My personality lends to a higher degree risk tolerance for investments, which fortunately is supported by having a military pension (25 years). My wife prefers more certainty, and doesn’t want to run out of money, especially if I die first. As a compromise, 6 years ago we went from DIY to a financial adviser, who’s been very helpful in a wide range of financial decisions, as well as having an outsider’s perspective. We both sleep better as a result.
2- The biggest satisfaction (joy?) has been giving it away. We have 3 grown kids (in their 30s). Our younger son has 2 high-need kids, and they no longer fit in their apartment, so we’ve been able to contribute to a down payment for a house, that he’ll be able to afford the mortgage. Our daughter became disabled 4 years ago, and cannot work anymore. We could afford to have her move in with us while her disability status worked its way through social security (she was designated SSDI last year). Once again, we’ve been able to help her move in with her brother (the new house needed to fit all of them). Although you never want to be confronted with mishaps, it’s a comfort to know that when they happen, your financial picture isn’t a constraint.
3- Our nest egg is really a bridge to get us from retirement (it started 2 years ago) to when I turn 70, in 9 years. At that point the military pension and social security will be more than our current/expected expenses. So 0% growth means a smaller estate.
5- We feel lucky that we have enough.
6- I retired 2 years ago. The biggest joy has been owning my time and deciding how to spend it. I’m not a “Purpose” type person, but do value what I do, so you can say I’m a lower case “p”. I’m aware of the importance of maintaining or growing social groups, hobbies, exercise and nutrition. My calendar reflects these priorities. The other thing of note is volunteering: I didn’t have a big plan of what to do when I retired, but have gradually have found my callings over these 2 years.
7- The big take aways from my wife and my parents has been their denial of needing care as they aged. My parents live in a 2-story townhome, when they should be moving into a retirement community. Of course, they don’t want to live with a bunch of “old people”. Recent health concerns simply means my brother and I are watching their choices becoming a slow motion train wreck; *sigh*. We’re already thinking that we’ll want to move nearer to one of our kids, and into a retirement community in about 10 years. Grandkids or the need to leave our current location (we’re above 7K feet), may drive the decision earlier. In any case, we don’t want to burden our kids in the same way our parents are choosing. We should be able to self-fund any longterm care.
8- When my wife’s father died, the estate was a mess. It took 3 years for her and two brothers to search and closeout everything. Consequently, we tried to be completely transparent with all our finances and planning with the 3 kids. Also, because of our daughter’s disability, we’ve created a living trust where she’s not a beneficiary, but would be looked after by either of her brothers via the trust. Also, we’ve brought them in to establish a personal relationship with our financial advisor. Who knows, my wife and I might get hit by the same bus!
1. Everything saved is from hard work; don’t want to lose it.
2. A feeling of financial security in retirement.
3. Not a problem, less than 1/3 in equities, the rest produces retirement income.
4. Yes, I feel that my 40 years in engineering was productive.
5. We’re good, we are retired and live the same lifestyle as before.
6. Retired. I do some consulting, then manage and play in golf tournaments; my spouse volunteers 3 to 4 days a week.
7. Not sure; we’re OK financially; most relatives have passed at home with hospice care; that makes sense.
8. We update our estate plan every 5 years and live by George Carlin’s law: “a person spends the first half of their life acquiring stuff and the second half trying to get rid of it all!”
1) I am more risk advers than I thought
2) In early retirement saving other than gifts to kids
3) yes as long as it is not minus 30%, but I am diversifying to international stocks
4) My patients all said I was a huge sucess, but were very very upset when I retired
5) It would be nice to have a big boat
6) other than investing, I love the new time retired I have to explore many intellectual pursuits and volunteering
7) Wife
8) this is most interesting one. I cannot bring myself to part with any of my 5000+ books , or sentimental documents from long gone family members. Suits ties, clothes that dont fit, sure (i only wear t shirts now anyway) but everytime I think I should take a book to the book sale I need it the next week. So far my kids are not interested in my geneology documents, but if I toss them they might be.
Concerned:
In November of 2022, I knew I would be retiring in 2023, (I actually retired a week later, for tax reasons…). At the time, I had a gun collection…a wife who had no clue what they would be worth…and kids who never understood my love of guns and shooting, although they both learned gun safety and went shooting with me as teens.
So…I sold them. Over 300 files, pistols, and shotguns. (90% of them had been “Safe Queens” and actually had never been out of their boxes. I sold them to Cabella’s a subsidiary of Bass Pro Shops, for about 78 cents on the dollar. I got a nice, big certified check and they got a deal! A win-Win.
Needless to say, I had to retain a “few, ” and like rabbits, they have multiplied some, (I am back up to 60) but I have instructed my spouse to have them donated to the NRA, in exchange for a life annuity for her, after I pass. (The NRA has a tremendous program for exactly this purpose.)
I have already done the culling of my books and other collections, but as with my guns, a had to retain a few. Today, most, but not all, of my books are on Kindle.
I promised my daughter she would not have to clean out our home, like I had to do my father & step mother’s…and my mothers and step father’s, as I was the executor for both families. It is a great favor we all need to do for our kids.
In our family, you had to earn it, and we were advised to always put some of our earnings from 10 years old onward, into the bank. I was fascinated that you earned interest on your money. Dad taught us about the Stock Market.The greatest Joy is giving money away to your church, a good cause and for sure to the children and grandkids and great grands.I would dislike it, but I am positioned to withstand those 10 years and keep my lifestyle at our CCRC.A long story short, after getting laid off at 48, I was able to go into business with my only income, commission based, and it all turned out well. For sure I considered myself a success, working from home in 1994 and everything on my own schedule, started semi retirement at age 60 and eased into full retirement at age 78. I loved what I did, could vacation whenever and as long as I wanted, because of the internet. A great ride and very satisfying growing from electronic design engineer, sales engineer to management, and then to commission based selling of what I learned in the previous 22 years, inkjet printing, fluids parts and printers.We always managed a budget and lived within our means, and at age 60 we stopped budgeting and lived much more freely.Being semi-retired let us spend much more time with our family, and vacations, we loved those National Parks.I am not a believer in Long Term Care Insurance, but always saved that money to self pay, luckily it all has worked out, and whatever we need will come from our investments. I did receive a small pension at age 55, $1000 a month, and saved all of it and turned that into a million dollar fund, to take care of me and my wife. We are both each others caregivers, and when that does not work, our family will take over, and as I said we are in a CCRC with all that is needed.Our family will be most happy and we have shared our Trust with our 3 children and how that works, and in addition I have added guidelines on how to handle, they know where everything is located. We have downsized 2 times, so we feel all is in order, and if the markets continue to be good to investors, the estate will give them all a big boost.A very big thanks to Jonathan for Humble Dollar and all the great information for all of us. We really appreciate all your articles. Best to you and your family.
Great job, Dad! Sounds like a great plan!
With respect to question #3, 0% return on stocks would be no problem for me or my wife. My kids would inherit less. All my stocks are in my roth and my trust and my plans are to only spend my IRA. By the way Jonathan, I have changed my plan based on something you did. If I die before my wife, my 2 kids will immediately receive my roth. Hopefully, this will give them more options for retirement.
Really enjoying the responses to these!
1.) Food and home insecurity backgrounds meant we sought early independence and very secure but intellectually stimulating science and health care professions. Risk tolerance is medium high since we knew one of us would always be able to easily find work.
2.) We appreciate independence and good education money can buy.
3.) Still working by choice. We have had bad employers and good. Now it’s good employers, that makes a huge difference and we’ll keep on (in our 70s) until maybe hearing/vision begin to be problems (or cognitive decline!).
7.) We have no children and have set aside money for several years of highest-level care, and I am working on downsizing right now.
8.) Plans have been long established and everyone knows but the question is if we should disperse early via an irrevocable trust? Also, how to keep passwords updated for executors is problematic.
1. I began working and saving at age 15. My parents and some siblings struggled financially. I began investing in the 1990s and was obliterated by the Dot-Com bust. I prefer certainty over chaos, planning and preparation.
2. I like to purchase things that make our lives easier or more enjoyable. Frequent gifts, even small ones and mailing letters probably create a few smiles.
3. That would require less frequent checking of the accounts. I looked at my planner and ran the numbers. My projected return for tax advantaged accounts was 4.5%. Lowering to 0% with 3.6% inflation would leave a smaller balance in 2050. Charities would be gifted less although there would be some assets to sell.
4. It was a long career and I’m satisfied. As a very young engineer for a design and build firm we found ourselves in some very difficult situations; I was instrumental in resolving them. I did so discretely, preferring a low profile. One of their clients once asked top management “who was that phantom?” I was involved in some transformational technologies and built businesses to apply them. I was leader in some impossible projects and situations, made industrial processes substantially more energy efficient and participated in resource recovery efforts. These technologies saved a few companies, reduced preventable industrial accidents. I once solved a serious technical and political problem. This restored a firm to a country from which it had been banished. During a 20 year period I started two automation related engineering companies, one continues today. One individual who witnessed the results of a project described it as “automagical”. I did volunteer work for a large older 40 acre HOA (a private urban development) during and after the great recession. I reduced costs, avoided special assessments and suspended fee increases. I enrolled a functional board and trained management. I developed a 30 year plan and budgets. During my tenure I completed all scheduled maintenance tasks and capital projects on budget and on time. I designed some important, necessary infrastructure upgrades. Many foreclosures during the period 2008-2011 were avoided and unit values increased substantially. I was a volunteer with a youth organization. I had a “boots on the ground” position and taught outdoor skills, winter camping, canoeing, backpacking and leadership. I taught my children these skills as well as computer programming and computer aided design. Today they are successful nuclear and aerospace engineers.
I think I made a difference. I have a goal to leave things and people in a better condition than when I found them.
5. I don’t have much use for money as anything other than a tool, a means to an end. I consider it sufficient to have enough to fund my goals, have a comfortable retirement with gifting.
6. Spending time during a delayed retirement with the people I want to be with and doing the things I prefer to do has been marvelous.
7. My spouse and I will care for each other if we are able. We decided we don’t want the family to care for us. We have LTC insurance and adequate savings and other assets to sell if assisted living becomes a necessity. Based upon experience I’d also prefer a care giver for a few hours 5 days a week for additional company, and we have budgeted for that.
8. We have a will and set up the gifting. Much of the stuff will be sold or gifted; the family doesn’t want it. We have an agreement with a firm to handle disbursements when we both pass on. The children, in their 40s are I much better financial shape than we were at their age.
Without even understand ing off what you said…there is NO QUESTION…YOU are a success!
The HOA Work impressed me the most!
#1: This is an easy one. My father was terrible with money, our family finances were always tight, and I grew up in an extremely expensive area where nearly all the kids I grew up with had more money, and I was a “poor” kid in a wealthy environment. I remember when we were raising our kids, I would articulate that we didn’t have to be the richest family in town, but I didn’t want to be the poorest, either. In the middle would be just fine. Also, my father’s irresponsible choices have made me quite cautious and prone to anxiety when it comes to finances. The current instability has been hard on me.
#3. Well, I can’t say I’d be happy, but we’d be OK because we’re in the fortunate position of being able to manage on pensions and Social Security if we had to.
#4. I’m 2 months & 11 days from retirement according to my app(!), and yes, I will leave with a sense of satisfaction. I’ve had a successful and fulfilling career. I’m very grateful for it.
#6. I’m definitely not going to “meander”—just not wired that way, but I’m looking forward to having less responsibility and a more open schedule. I’m still thinking through what “purpose” should look like for me in this next season.
#7. We have LTC policies and enough resources to pay for whatever care we might need. Figuring out the “who” is more involved than “how to pay for it.” I don’t know that either of our daughters would be a good choice for a primary caregiver, so we’ll probably put deposits in on CCRCs.
#8. Our estate plan is in pretty good shape, but there are still a few things to do to make it really easy for someone else to deal with. We’re just turning 65 and healthy, so there’s probably a bit of time, but I consider this set of tasks a priority.
I worked hard my hold life and made a lot of money. Always lived below my means. Now have a sizeable estate. Decided when I hit 70 to start giving it away. Never have been a “happy person” as such. Stoic by nature and not a member of any organized superstition. However, I do subscribe to the saying, “Be kind to all creatures. That is the one true religion.” So I work at trying to be kind– not natural for a gruff old guy. But giving back makes me feel impactful which was always important to me.
Being a ‘nice’ person is a skill, and also a gift to me and thee.
Without a doubt, the greatest joy is giving it away. I semi-retired at the end of 2024, but am doing a part-time job (serving as an interim pastor) for the next year or so. The money paid to me by the church will be used for giving to charities and investing. My idea is that my investments grow, my giving can grow. Plus, it’s good to have some extra money available for emergencies.
With regards to # 6, I’ve found the reduction in stress to be a huge source of well being in retirement. My primary occupation for most of my adult life came with a great deal of stress as did some other work I did late in my working life. I love having more control of my time, not having to ask permission to take time off, and being available to help and participate, when I can, in my adult children’s lives.
That is exactly how I feel about my imminent retirement. People seem surprised to hear I’m leaving. I look a bit younger than I actually am. But the politics and bureaucracy in my university have created a lot of stress for me over the past seven years, and I feel it’s no longer physically or mentally healthy for me. I want to get out while I can still enjoy and engage in life fully.
People are now asking me what I plan to do when I’m retired, and I have some stock answers, but the real answer is “Whatever I want, and especially not what I don’t want.”
Earlier is much better than too late. Keep that plan and I am confident you will be well in retirement. Best to you.
Good for you Dr. You will do just fine. And just think about how you’ll be able to enjoy the Oakland A’s playing nearby. Frankly, your future may be so bright you’ll need a new set of Ray-Bans. 🙂
We’ve been going to AAA games at that park for years, even had partial season tickets for a while. It’s maybe 25 min from our house and a fun place to spend an evening. We’ll definitely catch a few major league games while the A’s are there. ⚾️
I think #3 may be the most important question I’ve ever read in the investment realm and the best way I’ve ever seen of posing the cash reserve question. It also highlights Buffett’s quip “If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes.”
Man you’re good.
a purpose (small p) can be as simple as a credo to be kind to the people around you, those that you actually encounter in your day
Father (the breadwinner) worked hard – too hard, all the time – to make a small family business support our comfortable middle class life. He assumed that hard work and good character would translate into financial security. It didn’t, exactly.Honestly, at this juncture – making small to medium discretionary purchases (the expensive coffee, the airline upgrade, the nicer hotel, taking family to dinner on my in NYC) without having to worry about it. This is the result of years of frugality and saving.I suppose, but not really sure I know. The money is there, worry would creep in for sure. I am 3 months from retiring. 25 years in primary care medicine + 12 in the health care start-up world. Yes, I can say I made a positive difference to a lot of people, made a very significant difference to a handful. I feel great about that, though still wrapping my head around the cost.I can fall easily in to moving the goal posts. I have enough, but now worry about our current “administration” and the destruction being wrought.Helping those around me, more time and experiences with my adult kids, pursuing my interests more. I have not lost my curiosity at all, for which I am extremely grateful. That said, am very curious to see what retirement brings – that curiosity led me here to HD.My spouse or kids. I have a different take on this one. I just buried my mother about a month ago after 4 years of dementia, 2 in a very expensive memory care facility. I was the primary caretaker, the “burden” that so many refer to regarding their kids and future needs. Yes, it was a lot of work, not fun, often tiresome – but an honor. We plan to earmark our home equity for LTC, if needed. After seeing what dementia in my mother, I am intentionally NOT spending a lot of time worrying about this. I am focused on my healthy years remaining. We are lucky that we have the home equity to make this reasonable.I think so. Current approach is to focus on using our savings during our lives to enjoy and help our children.I appreciate the many comments on Humble Dollar. Thanks Jonathan.
Answers #5-Always want more money.
Money is security and one never knows what life holds for us or our families. Old age limitations, a natural disaster hits our home, a grandchild becomes ill, or just added comforts (like a first class travel ticket) so we can continue an active lifestyle as we age. This recently made a huge difference for my 90 year old mother to travel overseas. I also want to leave some money for my children after my death. The money my father left me allowed me to quit work and babysit my grandchildren while my daughter runs her business. I feel it was my father’s investment in our family’s future generations.
1. What in your past or about your personality explains your investment risk tolerance?
Market gyrations don’t rile me too easily. I think nature provided me with an even keel, and I’ve been in enough legal and labor disputes to have learned enough to keep my cool when others aren’t. Also, my first ever mutual fund investment just a couple months before black Monday taught me that bad times don’t last.
1. Risk tolerance: When I was working “I will make more” was my answer to any investment loss, unexpected expense, or when I paid more than I should. Have not changed in retirement but optimistically expect long term growth for even our most volatile investments.
2. Use of money: Feel good about donating, but joy comes from buying and using a good tool.
3. Flat stock market: Shortly after retirement did a thought experiment where we cashed out all our investments and put the money under our mattress. Estimated we would be okay for the rest of our expected lifetimes. So yes.
4. Feeling of success: Retirement date was not my decision, but if success was enjoying every day of work and knowing that what I produced was valued, then yes.
5. Enough: Our plan is to spend less than what our investments return because more is always better than less.
6. Purpose and happiness: Too busy with too many projects to think about this one.
7. End of life care and expense: And I do not want to think about this one. Best case scenario: I am found tool in hand still working on something.
8. Heirs: Never considered generational wealth to be a positive for our society. Funding scholarships is the plan.
I retired 7 years ago from over 30 years of insurance agency ownership. I was able to buy a LTC policy at age 50 that was fully paid up at age 60. It has a 5% annual benefit inflation rider so it’s nearly kept up with inflation. Now at age 72, that policy gives DW & me lots of options, should the need arise. Love your blog!
Number 4. I’m retired. I enjoyed working, and learned a ton of new technology between 1976 and when I retired in 2020. I also learned to stop acting like I was a hamster in a wheel – – – that working to live was far more important than living to work. There was one last status upgrade/promotion I wanted before I retired, and didn’t get it. But now, five years later, it doesn’t matter at all. We’re happy in retirement, have our health, adequate finances, and a great social network that includes family and friends.
I’ll answer a few of these…
3) Yes. 8 years retired, DW and I are late 60’s. SORR somewhat past us, as we’ve rebalanced our portfolio into fixed income (and largely avoided the bond meltdown a few years ago by using former employers stable value fund, which did what it needed to do), and earlier this year shifted to a 50/50 asset mix from 60/40. This wasn’t really a timing thing, but I found our TDA accounts could go solely into ST bonds (laddered over 3 years), and TIPs (laddered over 5 years), with a small holding of fixed income in Roths to round out the AA. Basically have adopted Bernstein’s mantra “if you’ve won the game, why keep playing”… Once SS starts at age 70, the spend down from the TDA could be reduced if we wish, or use it for travel and/or gifting.
5) I feel I’m purposely meandering thru retirement (8 years today!). Having control over my days has allowed me to help my aging parents over the past 6 years in ways I would not have been able to do if working. DW and I have moved to our retirement home full time 7 years ago, and found renewed purpose in rebuilding social networks and exploring new activities that make us happy and purpose.
8) We are happy with the estate we are leaving for our children and charities. We’ve largely simplified our portfolios, but still have some additional simplifying to do as me move into our 70’s, and get into RMD years. I’m guessing even with additional simplification, DW and our children will likely employ an advisor to help with portfolio distributions (DW), and managing investments (children).
1. 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?
I hope so. Our heirs have expressed to us that they do not need our money. I have communicated with my daughters and their husbands about the estate. My estate attorney son-in-law favors trusts, but I have opted for beneficiaries, which I believe will work just fine.
Great list of questions, Jonathan! I couldn’t pick just a couple, so will emulate others who chose to respond to all 8.
What in your past or about your personality explains your investment risk tolerance?
Growing up, I believed money was always “tight”. Now, I understand that my parents, who were children during the depression, were simply conservative with how they spent and that they emphasized saving for long-term goals. One working parent all the way through, yet we never wanted for anything or went without. I am probably not as conservative as they were, but do focus on how much we spend, what we spend it on, and the importance of saving.
What uses of money—giving it away, saving it, specific purchases—bring you the greatest joy?
At this time, spending on experiences with our children and grandchildren and quite a bit of traveling cause us joy. Once I turn 70-1/2, using QCD’s will allow a sense of satisfaction knowing the $ will go to worthy causes.
Would you be okay financially if U.S. stocks had a 0% total return over the next 10 years?
Yes, no anticipated concerns. Our pensions allow us to increase our savings accounts, pay all our monthly expenses, travel as we wish, and tackle the occasional home improvement project. The pension is guaranteed by state law, and exempt from market fluctuations. When we receive SS benefits, they will simply enhance our savings and investments. Whatever happens with stocks, good or bad, is a very minor issue and reacting to what happens in the market doesn’t cause us concern.
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?
We are both retired. My wife was an educator and had a lengthy career in one school district. I was a teacher, then school administrator. Growing as an administrator took me to 4 separate districts, with each move resulting in greater responsibility and authority. Recognition from the state administrators association was a nice compliment to receive!
What would you consider enough money, or will you always want more?
Well, sure, who wouldn’t want more? Actually, going back to my response to Q3 and pensions, between those and our investments, we have enough. I would define “enough” as handling our finances without having to rely on others and providing nice inheritances.
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?
We each have part-time jobs which allow us contact with others and which we cay say “yes” or “no” to accepting work. I find a sense of purpose serving on church committees, singing in our church choir, and providing occasional trumpet accompaniment for various anthems. In addition, I am very active in Lions International at both the local and state levels. Service to others seems to be a diminishing focus for many these days, but it is important to me. Finally, am an officer of our homeowner’s association and enjoy being in that type of leadership position.
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?
Plan A: my wife (I am her plan A). Plan B: our children as our needs and their time permit. Plan C: TBA. We each have LTC insurance, so payment should be all or nearly all covered.
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?
Financially, they will receive nice inheritances. In terms of memories, we hope that the time spent with experiences with them will be memorable in a positive way. Regarding dealing with our affairs and possessions, we have wills and the other recommended legal paperwork and we have relatively few financial accounts that would need to be handled. Children know where our legal documents are kept and that there is my “time’s up” document of accounts, contact info, and beneficiary info. As for possessions, we have perhaps gleaned out the “tip of the iceberg”, so there’s plenty of work yet to do.
Just an FYI – You can start doing QCD at age 70 1/2…if you want.
Understood. Didn’t proofread my post sufficiently, but will correct that. Thanks.
Thank you, Jonathan, for the opportunity to reflect on these 8 questions, 5 are about my relationship with money, 3 on happiness. Here are my reflections on my twin pursuit of money and happiness.
I learned my first and long-lasting lesson about money 50 years ago this April, when the Vietnam war ended with the communist’s victory. My father was a defeated colonel, took his family to join tens of thousands of others to leave the country by boat. We were the first wave of the boat people refugees. Once we reached the open sea and heard of the surrender of the South Vietnamese government, we knew that we could not return, and people started dumping all the paper money overboard. These notes floated around thousands of ships, covered the ocean surface below deck to the horizon. The first lesson was this: money follows its own laws of circulation beyond our grasp, that’s why it is called “currency”. Money generates wealth and envy, gives us a false sense of control of our time while consuming a lot of our time, and leaves us sooner or later.
Enduring happiness comes to me by harmonious relationship with myself and with others, loved ones and un-loved ones. I cannot command my body to stay the same for long, but I can choose to put my attention to what is pleasant and turn away from what is unpleasant. Radical acceptance of real life even during illness and conflicts requires effort but brings priceless peace. Compassion for myself and others brings joy.
Powerful, Quan. Many thanks for this contribution.
I love this. Thank you, Quan, for getting to the essence of what Jonathan is asking. Chris
If you’re already retired, did you leave the workforce feeling like you’d been a success?
Yes I did. I built my tax business from scratch, all growth came from referrals. My practice was in a small suburb of Toledo, and clients began posting reviews on its Facebook page. Eventually I had to stop taking new clients.
That my clients liked me well enough to refer friends and family, and that a successor would come along buy me out, made me feel like I did something right.
Great list.
1. Having a comfortable pension with an annual COLA allows for greater risk tolerance.
2. Having spent most of my adult life saving, I enjoy giving some money away.
3. Yes.
4. Having lived a life of unanswered prayers, I’m quite content with my career.
5. I’m content.
6. There is no substitute for good health.
7. Nuclear family is my plan. God willing, money shouldn’t be an issue.
8. I certainly hope so. The estate is straightforward. A stock market rebound wouldn’t hurt.
Great, thought-provoking list, Jonathan.
I’m skipping #1 because self-analysis is something I try to avoid. I’m way too self-absorbed as it is.
#2 – After decades of financial stress and grinding over money every day, charitable giving and just everyday spending and bill-paying give me satisfaction because I never forget to appreciate that I can afford it. I don’t miss that first-of-the-month knot in my stomach, that’s for sure.
#3 – I think so. I don’t figure in growth when I project my finances because… well, look what’s happening now. So I view any growth as lagniappe.
#4 – I’m still working part-time because I like the work, the clients and the money. When I run out of clients, I’ll pack it in.
#5 – More would be nice, but I’m content because I never even hoped to have what I have now. I’m not wealthy, but I feel reasonably safe.
#6 – I need something to do every day or I will atrophy. Working a couple of hours every morning gives my life purpose. Refereeing, pumping iron, singing, acting, tending the lawn, walking the dog and Meals on Wheels give it satisfaction and a sense of accomplishment.
#7 – My much-younger wife insists she and her sister will gladly care for me. Without them, yeah, I would likely die broke.
#8 – I have no heirs except my wife, and when I’m gone she will be fine with whatever I leave. I do need to make sure the post-me paperwork is easy to navigate — it’s an undone task that nags at me, not least because of the reminders here!
1. I started saving in 1984 when I finished collage. That’s forty-one years of ups and downs which has helped me know myself.
2. Specific purchases for sure. Going to Africa with my son was priceless.
3. Yes
4. I’m retired and yes.
5. What I have now is enough.
6. My family gives me my sense of purpose. I have the time to spend time with and help parents, kids and grandkids.
7. Spouse and kids will help me out when the time comes. LTCI and plenty of investments minimize the risk of depleted savings.
8. Wills, POA’s are in order. Investments have been simplified to just one traditional and Roth IRA’s each for the wife and I and one joint brokerage account. Everyone knows where the notebook is with all the necessary paperwork is. Already downsized and emptied the house.
#3 — During our working years my wife and I both (before we even met) prioritized getting jobs with good pensions over salary. We were lucky as we were able to do that, which has allowed us to fund all our retirement expenses (including travel) from our pensions. So the return from our financial accounts is supplemental rather than required. Plus we both have a lifetime of experience living within our means (which we still do today). We wouldn’t enjoy a lost decade in the market, but we’d be okay.
#4 — Near the end of my career, through no fault of my own, I found myself orphaned and forced upon an organization that hadn’t hired me. Fortunately, in that organization 2 years later I was given a tough assignment which I managed for my remaining 5 years. Me and my team transformed that assignment from a problem area into the “shining star” of the organization, which was very satisfying. It (unexpectedly) ended up being a very satisfying end to my career.
#7 — Our plan is to go into a CCRC at some point. We really like our home, so we’re trying to navigate the sweet spot between enjoying our home for several more years but not waiting too long and no longer qualifying. Time will tell if we’re successful, but that’s our plan.
#8 — With periodic reminders from HumbleDollar articles, my wife and I have done a good job ensuring our beneficiaries and ‘the letter’ are kept current. Plus we’ve tried to structure our affairs in a manner so an uncooperative beneficiary can’t hold up the process. So it should be reasonably easy for our executors to handle our estates.
4. I’m retired but still working part-time in my field, as many readers know. Yes, I felt satisfaction and closure when retiring from my 38-year primary career. But how is success defined? Although I eventually rose to the top of the technical career path, in my large company I was still small potatoes on the organizational chart. I imagine many folks who ended up at the Director or VP level might think my career endpoint doesn’t meet their concept of success (for themselves). Still, the only definition of success that should matter to me is my own. My self-assessment was that although I might have had some managerial skill and drive, I didn’t have the physical stamina or capacity for absorbing stress needed to be a successful manager in my industry. I also highly valued time with my family, which would have undoubtedly been in shorter supply had I moved higher up the ranks. My criteria for gauging success were things like: 1) being conscientious and working to the best of my ability, recognizing my human limitations, 2) avoiding unnecessary overtime while still being a team player, 3) having positive relationships with my coworkers, and 4) enjoying successful outcomes of projects I was responsible for. I also credit my father for releasing me from any sense that I needed to “prove” myself by achieving a prestigious job title, even though he was a company president.
Fortunately for me, the company I worked for recognized both a technical and a managerial career path, although of course the managerial side went higher. I was offered the opportunity to go into management several times, but knew I would be much happier, and probably more productive, staying a techie. When I announced that I was taking early retirement, my manager tried to persuade me to stay, so I take that as an indication of success.
Either Socrates or Aristotle is credited with the quote, Know thyself”. Obviously you do Ken, as did I. Early in my career I was appointed, without my input, as a director of a small outpatient physical therapy department in a physician owned practice that was just getting started. I was supposed to be a staff PT, but the director left before I arrived. We were growing exponentially and were always short of staff, equipment, and eventually space. I never wanted the position, or the stress, I always wanted to be responsible for MY work ONLY. I resigned after about two years and gladly spent the rest of my career as an Indian, not a chief.
Interesting post Jonathan!!
1. 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?
This is a terrifying question Jonathan. An extended stay in long term care would eventually break the bank, but that’s not what bothers me. What troubles me is knowing that the daughter who lives just a mile down the road, would step up and care for me. That’s who she is, and I don’t want to ever do that to her.
No. 5:
Because the term “enough” is very subjective and kind of nebulous, one might even think of it as a moving target, describing an environment where you feel less fearful about your finances. However, even then, when you have gathered a couple of million or so, you can evolve into a person who sees themselves as the steward of these funds for their heirs and/or their families, or whatever charitable purpose they wish to support. A good steward always wants to see the pile get bigger.
Steward. I really like that term in this case. That’s what I hope to be, too.
Good point. That’s the way it feels
No. 6
As an experience and a subject, happiness has been pursued and commented on extensively since the dawn of history. This reflects the universal importance that humans have placed and still place on happiness .
One thing is certain— if you are to be happy and awaken to the beauty of the world around you, you must put your life in sync with your deepest values and your beliefs. You must pursue what you truly want out of life and not what others want you to pursue— this is not an easy thing to do, particularly in modern society where we are subject to so many outside influences.
Research has reported that physical attractiveness has, at most, A marginal effect on how content people are in life. Other research has shown that social standing, age, intelligence and education, have no lasting effect on true happiness.
How happy you are depends on whether you are willing to be happy. it will come easily when you are thinking and doing what’s right for you .
The biggest contributor to my happiness in my life comes from the deep well of feelings of goodwill I have for my fellow humans. I am not serving up a Pollyanna-esque view of the world., for yes, I am all too human. Some things raise my hackles. But I persevere.
I have time for just a quick one, but I’ll come back to these.
#4-I’d like to see the younger folks at work move into more of a leadership frame of mind. I’m helping them along toward that end. I’m cutting back, but I expect to stay on the job until the pull of life outside of work overcomes the satisfaction from my job. But if we have a scenario like…
#3- I have enough cash and bonds to cover most of it, and I still have income from my job, so I’d be fine. But the thought…
1 I’m just a generally risk adverse person. I like to cover all the bases.
2 At this stage of life giving it away, but that includes growing it more to leave to our children.
3 Definitely not, my pension would be at risk as would those of anyone fortunate to have one.
4 Well I rose from a mail boy in the union to Vice President of a S&P 500 company, so I did okay- but it took nearly 50 years
5 in the context of self I have had more than enough for several years.
6 I rather enjoy meandering through each day, including family events.
7 The who is open, I hope no one has to, we have LTC ins and I believe sufficient income and assets to cover the expense.
8 Good question. I think we have everything in order, but it will be a hassle no less. Just selling our homes is something I wouldn’t want to face. While we down sized and there is no basement or attic to worry about, there is still stuff. I hope the $$ is more than sufficient. For at least three of our children what we leave will be important to their retirement.
Thanks Jonathan (as always). I’ll give it a shot.