Readers of my previous blog posts know that since I retired more than 18 months ago, I don’t spend much time looking at the values of my investments. There are four main reasons for this. First, I spent more than 30 years watching the markets and client portfolio values on a daily basis. I was more than ready to pass that off to my former investment partners, and I don’t miss it one bit.
Second, I am blessed to not rely on my portfolio for current income, at least at the present time. I have therefore created an allocation with which I am comfortable, and put it on auto-pilot. If I need answers to questions, I know I can call my former partners for their input.
Third, I am surprisingly busy, and spending time looking at our account values is about the last thing I want to do. Numerous volunteer work, classical music practicing and concerts, our national display garden, and a great year for the Columbus Blue Jackets have filled my calendar nicely. My father in-law recently passed away, and my wife and I have spent many hours tending to those things that must be done at the passing of a second parent. We are both very grateful to have made the decision to move him from independent living to assisted living when we did. And we were blessed to be working with a continuing care retirement community, where he could transition from those two stages to wonderful hospice care with little effort on our part, except for the emotional drain that is inevitable. It goes without saying that we are grateful for our wise attorney, who also worked with my father in-law to make sure his goals were met. I hope all retirees have their important legal documents completed, up-to-date, and ready to go. This includes financial and health-care powers of attorney, living wills (if desired), and wills and trusts as needed. If something happened to you today, will your wishes be carried out as you want?
Fourth, and finally, I have absolutely no control over what happens with the investment markets. After decades of trying to stay on top of economic trends, political mayhem, world problems, and other all-consuming craziness, it’s wonderful to step aside. None of us can control anything except the amount of risk we are willing to assume and the investment expenses we are willing to accept.
There is a former colleague who spends a lot of his time reading lots of economic forecasts, sifting through them, and creating “what if” scenarios for those he thinks have the most probability of occurring. I asked him less than a year ago what his take on those forecasts was and what he would do as a result. Unfortunately for him, the overwhelming majority of economic projections called for a recession late in 2018, probably in 2019, and no later than 2020. As a result, he and his team of advisors gradually reduced domestic and overseas stock allocations from 60-65% to 45-50%. They added a 20% allocation to long-term bonds (long-term municipals bonds for high-tax clients), with the expectation that interest rates would fall with the recession, and they liquidated positions in real estate, small cap stocks, and all international stocks. I have yet to ask (and will not) how that worked out for him.
Headlines indicate our economy continues to hum along quite well, at better than a 3% year-over-year growth rate, with very strong employment numbers and still-low inflation. This is despite all the political upheaval in Washington and around the world, and as noted above, most economists predicting a near-term recession. I am reminded of an on-line advertisement touting a well-known economist who “predicted the great recession”, and promising to reveal all of his secrets for no more than the outrageous cost of a monthly newsletter. What the ad did not mention was that this economist is one of many who have been wrong a lot more than they have been right.
Recently I had a health issue that landed me in the hospital emergency room, my first visit there since I tripped on a garden hose and fell face-first onto a concrete patio (who knew gardening was so dangerous?). I am grateful for the excellent care I received, medication to regain my good health, and for the help of a health insurance consultant we hired prior to retirement. She has done a great job for us, finding the best overall plans each year and providing claim assistance as needed. This is one more aspect of retirement I am glad to pass on to a competent service provider.
My advice to other retirees is to stay busy, stay healthy, avoid falling prey to scary news headlines, and spend time doing those things that bring you and others joy and fulfillment. Put your financial life on auto-pilot to the extent possible, and be grateful for the good things each of us has. Not everyone has a life that is easy, but those of us who are able can spend some time trying to make life easier for those who aren’t as fortunate. That, dear readers, is one more aspect of a rewarding retirement.