Retirement & Race Cars

My latest retirement reading roundup.

First things first, that car in the header picture! That is a 1959 Lea-Francis Coventry. We had a car show at Walker Day (our big annual fundraiser for the department where I volunteer) this weekend. I'd never seen something like that up close before. Now to the post on some retirement related content I read and a couple of other things.

My old boss, Ken Fisher wrote an column titled Here's a secret for living longer and loving retirement that made its way to Yahoo Finance. He makes the point that "retirement kills, literally." The ideas behind that sentence include loss of social connections at work, no or less sense of purpose, reduction in exercise and depression over a pretty big milestone. He offers quite a few suggestions to overcome these issues that are along the lines of what I and many others have talked about before including volunteering and pursuing hobbies.

An important point he makes includes that healthy and successful retirement should include actual problem solving as opposed to what many think of as brain exercise with crosswords and the like. A volunteer endeavor or monetized hobbies are great ways to achieve this. We have a local internet service here in Walker that uses some sort of microwave technology (I don't know) started by a resident maybe ten years ago. He had one employee, another neighbor who when this all started was in his mid 70's. A lot of people here have it and every install is a problem solving opportunity, several problems actually. A while back I asked this neighbor (now in his mid-80's) if he wanted to work on an old ATV we had that we could sell and split the proceeds and he jumped on it, he wanted to take on this project, this challenge. It didn't work out (the bottom half needs to be rebuilt for people who know this sort of stuff) so he hoisted it up on to a trailer, drove it up to my house and he and I got it off the trailer (another problem to solve because of the terrain). While this neighbor is not doing the Iron Man Triathlon, I'd say hopping out of a pickup truck and moving a heavy vehicle at 85 is evidence of successful aging.

Sticking with Yahoo, they had a post about some countries to retire to from the US along with details on the nuts and bolts of how to actually do it. This is an idea we have explored many times before here because it solves problems for a lot of undersaved people. In many instances you can live very well for $2000-$3000/mo. I have never been a fan of completely cutting ties with the US because there could be a need or desire to come back. I've favored keeping a mortgage free home and living off the rental income (in addition to Social Security). One concern relates to healthcare in foreign countries. Spain often does well in surveys ranking healthcare internationally. My father lived in Spain for the last 35 years of his life got sick when he was 88, needed care and what he got was dreadful. I realize that is anecdotal but I fully empathize with the concern. Eating right and lifting weights are great ways to reduce the odds of needing medical attention and keeping a home makes it much easier to come back if you think care here would be better.

Another way to come at this is for a short time period as more of an adventure than a permanent move. I've used an example before along the lines of being 62 with less than whatever experts say you need, let's go with $250,000 and a mortgage free home. Netting $1500 renting out the US residence while figuring a way to make $500-$1000 with some sort of side gig could cover the expenses in some place like Malta as the portfolio and Social Security benefits are allowed to grow. Then come back at 68 or 70 to a much stronger financial situation. The huge thing to work out here, for which I have no great answer is seeing family--maybe come back for a month every year if that is economically viable? Video calling makes this at least a little more palatable...maybe?

Marketwatch cited work by Lance Roberts that concludes we need far more for retirement than we think, due in large part to the lack of linearity of returns and other factors. Having 15 years under my belt as an RIA helping clients navigate through sustainable withdrawal rates with the Great Financial Crisis thrown into the mix, my experience leads me to a different conclusion than the one Lance is drawing, I don't think it is as dire as he writes about. But even if he is 100% right and I am totally wrong, one observation that is crucial is that no matter what number you think you need, whatever you end up with is your reality and you will figure a way to make it work because you have to. The example above of having $250,000 at 62 would not be an easy retirement but the idea of living in another country is one potential work around and there are of course others. "No one will care about your retirement more than you" so go figure it out--you will because you have to.

An excerpt from a Tweet from someone who goes by @ThePrimalMan said "One of the most unfair advantages you can create for yourself in life is staying young well into your later years." My wording of the same sentiment is that you will make every aspect of your life easier by taking proper care of yourself (diet and exercise). You will have more optionality by staying able bodied and in many (I concede not all) instances this boils down to our own behaviors.

The yield curve inversion is starting to get long in the tooth in terms of becoming a threat to the economic cycle. The portfolio implication would be taking more defensive action than I might otherwise do, when the S&P 500 breaches its 200 day moving average.

Bitcoin jumped well above $9000 over the weekend and the touts and extrapolators are out in full force. I continue to view this as a lottery ticket. I would say to ignore the touts, ignore the folks who admit they know nothing and tell you to avoid it. Instead, do your own research and draw your own conclusion. If you need to go in at all, keep it small.

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