Happy Winter Solstice

The Winter Solstice occurred today at 4:21 AM, Eastern time.  The Winter Solstice is defined as the point in the Earth’s orbit  when the sun is furthest south, and the Earth’s northern hemisphere is tilted furthest from the sun. It is the shortest day of the year; days will start getting longer.

When I was an aerospace engineer, designing thermal control systems for geosynchronous satellites, the Winter Solstice was one of 4 important dates in the year, along with the Spring and Fall Equinoxes, and the Summer Solstice. Somewhat surprisingly, the Winter Solstice is the closest point in the Earth’s orbit to the sun. This means it was the warmest condition for satellites orbiting the Earth’s equator. The Equinox points were the coldest because they created the longest eclipse periods for the satellites. Knowing these extreme conditions allowed us to bound the worst-case environments, and design a system, using the proven analytical tools, verified material properties, and qualified design features that would work effectively within these extremes. We did extensive ground testing of our designs to make sure they would perform during the satellite’s planned  lifetime.

I used this approach on our financial plan. I wanted to make sure it was designed to survive during worst-case conditions. These conditons might include falling markets, failing health, expensive home or auto repairs, and many other risks.
The tools we can use included  hard work, career advancement, saving, investing, insuring, tax planning, and careful spending.

A satellite needs to do more than just survive the extreme conditions of space.  It needs to perform its mission. We tailored the design to try to optimize the mission performance. This was often complex and contradictory, since different equipment worked better at different temperatures. It takes more time, resources, and effort to optimize a complex system.

Similarly, we want to enjoy (optimize) our retirement, not just survive it. This includes prioritizing family, travel, dining out, entertainment, and the many things that make our lives pleasant. This takes more resources than just a survival plan.

This is how I approached our retirement plan. We first made sure the plan was solid enough to withstand the extreme conditions and risks we could possibly face in the future. My pension, two SS retirement benefits, and Medicare give us a strong floor against financial risks. Retirement savings, and some lucky real estate purchases give us additional resources to allow us to live a comfortable retirement, and pass on something to our children.

Finally, once the satellite was launched and operational, we regularly monitored its performance.  If we saw issues or unexpected trends, we could make changes, or predict what future performance was expected to be. If things went really well, the satellite could last significantly longer than expected, and perform better.

I monitor our financial plan’s performance in several ways. I look at our spending, assets, and market performance. This is more critical since we’ve chosen a more complex retirement, with 2 homes and lots of travel while we are still feeling good. So far things look OK, but I want to keep my eye on our trends. We have levers we can utilize if things trend in the wrong direction. The biggest lever is selling our second home.

Happy Winter Solstice.