Life After Work - Will I Be "OK"?

  You can prepare all you want for retirement, but unless you have so much money that you can’t spend it all, part of whether or not you will be “OK” is just plain luck.   Did you retire just in time to experience poor market returns (i.e., 2007 and 2022) or did you retire just before stocks took off (i.e., 2019 and 2023)?   When you are accumulating a retirement portfolio, the timing doesn’t really matter.   You’ll experience both up and down years (mostly up), but over the long run the stock market goes in only one direction – up.   But once you start taking money out to fund your retirement, it can matter a lot.   Given the volatility we’ve seen in the stock market over the last 6 months, this is an important risk to consider. Let’s assume for a second that you choose to follow the standard annual 4% withdrawal rate to provide your income.   If the value of your investment falls when you begin taking this withdrawal, you start depleting your retir...

  When building any type of portfolio, the financial services industry almost always assumes that a portfolio made up of 60% stocks and 40% bonds is the proper place to start.   This is especially true with a retirement portfolio since by definition pre-retirees and retirees are older and are assumed to be more conservative.   But is this really the right way to go? Before I tackle this topic, I should acknowledge upfront that I’ve never bought a bond in my life.   And I likely never will.   In the long run, stocks always outperform bonds, so I’ve never seen the point of adding bonds to my portfolio.   Don’t get me wrong.   There were certainly time periods such as the financial crisis of 2007-09 when I wish I owned bonds instead of stocks.   But no one can predict with any accuracy when such times will occur.   Now that doesn’t mean I don’t understand the potential benefits.   Proponents of a 60/40 portfolio will highlight the followi...

  According to a 2024 MassMutual survey, two out of every three retirees report they are either much happier or somewhat happier in retirement. ( 2024_massmutual_retirement_happiness_study.pdf ).   That should be very reassuring for anyone that is heading towards retirement.   But that also means that one out of every three retirees report that they are either just as happy, somewhat less happy, or much less happy.   The study also found that those that are happier tend to spend more time with family and friends, exercising, travel and pursuing hobbies or interests.   I’m guessing this doesn’t surprise anyone.   I'm sure every retiree at first wonders how they will fill their day and maintain relationships.     I mentioned in post #3 ( Focusing on What is Really Important ) that retirement allowed me to play full time in the St. Pete Half-Century Club.   You talk about a time filler.   Yesterday we concluded our 60-game season. ...

  When Social Security was signed into law in 1935, the age of sixty-five was set as the full retirement age.   Not long after, pension plans began to use sixty-five as the age at which benefits would be paid.   Following this trend, Medicare allowed enrollment at 65 as well.   Consequently, we now routinely think of sixty-five as the age at which people should retire.   But that’s not what happens in reality.   Studies have routinely concluded that the actual average retirement age is 61-62 years old - and typically not because people were financially able to retire.   A 2025 AARP study found that more than 1 in 3 people retired not out of choice, but because they had to.   Either for health reasons, family support reasons or because they lost their job ( How Older Americans View the Labor Market ).   Only 1 out of 5 retired because they had enough money to retire. The message here is that while you might be planning for retirement at th...

  To say the stock market has been volatile lately would be an understatement.    Yesterday , the S&P 500 was down almost 150 points in the first 30 minutes only to end the day with a gain of 56 points.   Despite these daily swings, as you can see from the chart below, the market has been relatively flat since early October. Source: Yahoo Finance This type of volatility can make any investor nervous – especially retirees.   I’ve had numerous conversations with my retired former colleagues since I retired last July.   And one thing that is almost universal is that hitting a home run is no longer the goal for our retirement portfolio.   The goal is now to consistently hit singles and doubles.   The fear of seeing our retirement nest egg go down significantly greatly outweighs the desire to see it increase significantly.   So, the question becomes, how do we achieve this goal in an investing environment with such uncertainty and almost...

  This past weekend I had dinner with a former business associate.   Amongst other things, he asked me what I missed now that I’m retired.   That question gave me pause.   When you retire, you mostly focus on the things you now have time to do that you couldn’t do while working.   I hadn’t really thought much about what I missed about working. One answer did come immediately to mind.   I missed the people I worked with.   Many of them became, and continue to be, good friends.   While I still see them occasionally, it’s just not the same.   And it’s more than just a friendship.   We worked together towards common goals.   We were a team and we had each other’s backs.   We took great pride in the service we provided to our clients each day.   And we all benefited from our success.   We were in it together.   That’s virtually impossible to replace once you retire.   I get some of that same feeling in my sof...