Politics And The Villages: Politico Article Highlights the Risks of Retiring Where Your Politics Are in the Minority

June 20, 2018 — The Nation’s Capital is buzzing about a new article from Politico Magazine on The Villages and its politics. The article provides an extensive and interesting discussion of politics in this giant active adult community in Central Florida. Its title, “Generation Pickleball: Welcome to Florida’s Political Tomorrowland,” foreshadows what its authors believe is coming for Florida’s electorate.

For four of five recent years The Villages has been the fastest growing metro in the country. And, in Politico’s political focussed article, it …”is Trump country, a reliably Republican, vocally patriotic, almost entirely white enclave that gave the president nearly 70 percent of the vote.” The area represents the future of the Republican party, and is considered to be the key to Gov. Rick Scott’s bid to unseat Democratic Senator, Bill Nelson, in the 2018 election.

The article makes many points. Depending on your politics, you might agree with some (more…)

By Roberta Isleib, P.H.D. (aka Lucy Burdette)

June 16, 2018 — Putting my psychologist hat for a moment…we are hearing an awful lot about suicide these days, including the tragic deaths of celebrities Kate Spade and Anthony Bourdain. For folks who haven’t felt seriously depressed or desperate, it may be hard to fathom thinking about killing yourself–and not considering the emotional destruction such an act leaves behind. But when folks feel that hopeless, suicide may seem like the only option. So what can we do to help?

Pay attention for signs of depression and suicide, including talk about feeling hopeless, changes in appetite or sleep habits, withdrawal and loss of interest in school, work, hobbies, friends, giving things away, preoccupation with death and dying…Even a sudden surge in energy and mood could mean that a very depressed person has concluded that suicide is the right solution.

If you see those signs, don’t hesitate to reach out. I taught this to my peer counselors at Yale: Don’t be afraid to ask directly: Are you feeling suicidal or thinking about harming yourself? If the answer is yes or maybe, get help! Call a family doctor for a referral or the suicide prevention hotline 800-273-8255

For further reading:
This New York Times article is very helpful
NIH Suicide Statistics

Comment: Retirement can be a stressful time. People who have a big piece of their identity wrapped up in their job may feel a big sense of loss. Men, who tend not to have strong personal relationships, may feel lonely and struggle. If someone you know looks like he or she needs need, reach out and tell him that you are there for him. That alone can help. If that someone in need is you – talk to someone!

June 11, 2018 — Some of the more reliable “10 Best Places to Retire” Lists come from Kiplingers. They recently came out with their “10 Cheapest States to Retire” version, and we think it is a pretty good effort. To come up with their ratings they looked at cost of living, taxes on retirees, average health care costs for retirees, and fiscal health of the state. As is often noted, sometimes you get what you pay for, although in the case of most of these states, you do tend to get more for your retirement dollars.

Although they didn’t numerically rank their “cheapest 10”, one ranking that is clear was cost of living compared to the rest of the U.S. Note that these rankings are on a statewide basis: different areas of different states can have dramatically different living costs. In big (more…)

— “Beware those free dinners”—

May 9, 2018 — One of several recent Member article suggestions was this one: “Is it better to hire a financial advisor or handle that financial planning yourself? And if you hire one, how should you go about it?” Thank you Lewis, that is a topic we know a lot of retired people struggle with.

We should preface this article by saying that we are not financial experts. This piece summarizes recent interviews with four baby boomers who have wrestled with this topic themselves, plus some of our own experiences with financial advisors. At the end you will find links to some other great resources about how to/whether to hire a financial professional to manage your money, vs. doing it yourself. We welcome suggestions on what you have learned on this topic.

Is financial planning Important?
Yes! The worst thing that can happen to you as a retiree is to run out of money. That can happen easily, if you don’t have much to start with, make poor investment decisions or spend your assets too quickly. Another bad outcome is the opposite – being too conservative and shorting your lifestyle unnecessarily. A third result from bad planning is to be untidy about what happens after your death. Will your surviving spouse be able to manage, particularly if you were the person in charge of the finances? Are your affairs arranged so you leave assets to your children without creating unnecessary problems?

A plethora of acronyms and certifications
There are a variety of levels for financial planners. Perhaps the most vigorous of those is the Certified Financial Planners (CFP) certification. In addition to taking strenuous classes, CFPs must also pass board exams and take refresher training. At the bottom of the rung, almost anyone can claim to be a financial/investor advisor or the like, without any particular qualifications. Investment advisors registered with the SEC or a state securities regulator are fiduciaries, subject to the duty of loyalty and due care with their clients. There have been attempts to soften rules for fiduciaries recently. Whatever the outcome of that effort, in our opinion you are better off with a fiduciary, because they are obligated to keep your interests above theirs.

Beware the free dinners!
One of the first comments we got in our conversations was this one from Lew: “Beware those free dinners”. What he meant was to be cautious about invitations to dinners or events from financial companies. On the plus side, these offers might be appealing, and you can usually learn a lot. But you might later regret opening up your financial life to them, along with the subsequent high pressure you might get down the road. Rather than having advisors find you, you might be better off doing your own research to find prospective advisors yourself.

On doing it yourself – don’t (some opinions)
Joseph, another interviewee, summed up the do-it-yourself option this way: “Most people shouldn’t manage their own money – they don’t have the discipline to do it properly”. If that seems like a harsh judgement, it does have some logic. He explained that the way many people invest is to hear about some great idea and buy without doing the due diligence. After they invest they tend to go on auto pilot. Even if they had an initial allocation plan, shifts in the market over time knock their portfolio off kilter, and they don’t adjust.

Big shocks in the market rattle people’s confidence and judgment – they tend to panic. Making emotional decisions can have drastic consequences. For example, we know a couple who reacted to the crash of 2008 by selling everything, losing half the value of their portfolio in the process. If they had been patient, they wouldn’t have lost anything.

He also made the point that most folks do not have the tools to manage their own money properly. They just do not have the financial literacy or experience. You can compare it to what happens if you design your own home: you might have a few good ideas but you lack the background to avoid big mistakes.

Finally, Joseph stressed that as we age everyone needs a backstop. We aren’t thinking as clearly as we did in our younger days. Someone whose judgement we trust should help keep watch over our financial assets.

Everyone in the panel agreed that no one should build a portfolio that consists mostly of individual stocks. That is far too risky, they say, and recommend buying index funds to spread out the risk from a drop in any one or group of stocks.

Doug, another of our panelists, has struggled to find an advisor he feels comfortable with. He once used a colleague who had started an advisory business, but his investment strategy seemed to get flakier and flakier. He is currently using the advisory services of Fidelity, which is helpful but somewhat generic. So for the moment, he is directing most of the assets himself, but feeling that might not be the best move.

What makes a good advisor, or a bad one
The easy answer is that a good advisor is the one who beats the market and makes you lots of money. But as famous investor Warren Buffett posits, it’s not that easy. In 2007 he put up a $1 million bet that a hedge fund couldn’t beat a low cast S & P 500 index fund. The index fund Buffett picked won, and the money went to charity. Buffett’s advice: “Consistently buy an S&P 500 low-cost index fund”.
Here are some qualities to look for in an advisor, according to our panel:
– Willing to take time to ask about your needs and preferences
– Explains their investment approach and strategies in detail, including past performance over different time spans
– Is recommended by sources you respect

Trouble flags
– The investment strategies do not seem clear and focused, or they can’t explain them
– Reliance on picking stocks rather than indexes. Some advisors seem to have scattershot strategies. Beware of the increased risk and volatility from too much emphasis on individual stocks and investments classes like precious metals.
– Advisor is unwilling to explain their approach or past results
– Wants to immediately liquidate your assets and put them into products/funds either related to their company or that have loads. Such a plan could expose you to hefty capital gains and might be lining their own pockets.
– Fees that seem exorbitant, or that are not explained to your satisfaction.

How to find a good advisor
This might be the most difficult challenge. How do you find someone who is effective and trustworthy, out of the blue? Here were some suggestions from the panel:
– Be wary of a recommendation from a friend or relative. Be even more leery of hiring someone who is a friend or relative. Hiring someone close to you takes away objectivity and narrows your search field
– Lindsay suggested relying on recommendations from someone you trust and respect. Better yet, if you have seen the person or firm in action professionally, you have valuable insight into how they will perform for you.
– Ask your accountant for a recommendation. They will usually have better experience in evaluating an advisor than you.
– Get a clear explanation of the fees involved. There is a range of how fees are charge – fees or percentage of assets are typical. If it is a percentage of assets, the larger your portfolio the smaller the fee should be. Some people panic when they realize how much they might have to pay – for example 1.5% of $1 million is $15,000 annually. That might be worth it if they do a better job than you could, but not if the advisor does worse than the market.
– Probe about customer service. You are paying for a service and you should be able to get it fast and competently.

Where to start looking for possible advisors
One place many people start is with one of the big mutual fund companies. All of our panelists had extensive and very positive experiences with two of the biggest: Fidelity and Vanguard. They and stock brokers like Charles Schwab as well as insurance companies have great tools that can help you allocate and manage your portfolio. They also have advisors who will help you build your portfolio and rebalance it. The advice is fairly basic and cookie-cutter, but it is generally sound. Ultimately, if you use one of the big outfits, a lot of the responsibility falls to you to use the tools and keep on top of your portfolio.

Edward Jones was mentioned as another reputable outfit by Lindsay. The firm has branch offices all over the country but, according to Lindsay, has a centralized investment approach that avoids the scattershot approach offered by some smaller outfits.

Organizations for various certifications have services to help you find one of their members. Certified Financial Planners has one of those.

Bottom line
It is a personal decision whether to manage your own retirement assets or hire a professional advisor. There are advantages and drawbacks to both. The main point we want to stress is that you need to make that decision consciously. If you decide to manage your own money, make sure you have the experience, temperament, and discipline to stick with it month after month, year after year. If you hire a professional, make the hiring decision using a process, rather than signing up the first person that comes along. Even then, apply common sense to make sure that your advisor is doing an effective, disciplined job of protecting this important key to a happy retirement – having enough money to enjoy life.

For further reading
3 Steps to Take Before You Hire a Financial Advisor
What Women Want in a Financial Advisor
How to Pick the Best Financial Advisor
Wikihow – How to Hire a Financial Advisor

Comments? What have you decided to do about managing your retirement assets? How did you find your advisor, if you have one? What have you learned that you might do over again? Please share your thoughts in the Comments section below.

June 5, 2018 — Almost half of baby boomers, unfortunately, have not saved enough money for retirement. That means they face a cut in the quality of their lifestyle. But for many fortunate folks who own a valuable home, particularly in a hot real estate market, a potential rescue is at hand. For example, retirees in coastal California in places like San Francisco, San Jose, Los Angeles and San Diego have the option to sell their home, buy or rent a home better suited to a retirement lifestyle elsewhere, and pocket hundreds of thousands of dollars in the process. People with valuable homes who live in New York and its close-in suburbs, as well as other affluent markets, can catch a similar lifeboat. This article will explore where some of the refugees from America’s hottest real estate markets are moving.

According to a recent report on the Trulia Blog, coastal California Metros are the perfect example of real estate good luck. In San Francisco, San Jose, Los Angeles, and San Diego homes on the market averaged $720,000 in March 2017, almost triple the $250,000 reported nationally. New York registered high median listing prices too, nearly $440,000. While these high real estate prices are not (more…)

June 3, 2018 — A lot of Americans, including retired baby boomers, are thinking… small. As one example, our last visit to the barbershop was spent listening to the young guy in the next chair talk about the tiny home he is building. Everyone in the shop was fascinated with the unique touches and hi-tech stuff he was putting into it. In mid-May we reported on the boat that John is building for his retirement home, Next Chapter…Afloat. Yet another aspect of the think small movement, and the topic of this article, is the notion of discarding the notion of the RV, and replacing it with a customized luxury van – Vanlife, or Vanliving!

If the mobile lifestyle appeals to you, your thinking up to this point was probably limited to RVs (see our “Living the Mobile Lifestyle” series by Betty Fitterman). Now, enter the customized van, another option with many (more…)

May 30, 2018– We have just updated our ever-popular “Dueling Retirement States” series with the North and South Carolina comparison. With all up to date demographic and pricing information, this article, “Dueling Retirement States: Which Is a Better Place to Retire, North or South Carolina” has a treasure trove of information. Originally written in 2010, it has almost 600 very interesting Comments on retirement-oriented towns in these states, and what it is like to live these states. Check it out -the facts are useful and the commentary is amazing!

May 23, 2018 — Our article of two weeks ago, “When Amenity Rich Isn’t the Answer”, stirred quite a reaction from Topretirements Members. It generated 53 (and counting) interesting comments in support of Pamela’s quest for a community with minimal to no active adult amenities. Which prompts us to ask, what is it that most people are looking for in an active adult, 55+ community? If not amenities, then what? If amenities, which ones are the objects of their desire? In this article we we review data from past surveys as well as some of the more interesting comments we have received on what Topretirements Members want to find in an active adult or 55+ community. We hope you will all chime in with your thoughts in the Comments section of this article – they are always the best part.

Amenity-Light – a quick summary
Pamela’s article brought forth many like minded folks who seek a community with only the most basic amenities. The primary motivation seemed to be economic: “Why should I pay high HOA fees for amenities like a golf course and fancy clubhouse with activities director when I will probably never use them”? Ella then asked (more…)

May 20, 2018 — Maps can tell you a lot in a hurry. Comparing two demographic representations, one from the New York Times and one from the Wall St. Journal, can tell you a lot about America’s birth rates, aging patterns, and where retirement age people are moving. The maps represent different themes on the aging of America, much of which is proving to be a surprise to demographers, who are puzzled by an an unexpected decline in birth rates.

Counties where deaths exceed births
The New York Times map offers a fascinating moving image of areas of the country that are aging out – where more people die than are born. As you watch it the map changes: it starts out with the picture as it was in 1991, and eventually ends showing 2016. During this 25 year period you can see that massive parts of the country that now have negative natural population decreases. Although much of the Midwest and Appalachia have been in this (more…)

May 16, 2018 — Back in March I received a letter from the Social Security Administration – “It is time for you to register for your retirement benefit!” I was impressed with their timing and efficiency, since my 70th birthday will be this August. Nicely done. This article will chronicle my experiences in registering for my Social Security retirement benefit online – lessons learned that hopefully will help others when it comes time to claim their benefits.

My decision was to wait until age 70 to claim. Fortunately we have been able to afford to live without that benefit so far. That blessing, coupled with very good genes (my parents’ average age before departing this earth was 97), made it seem like a good bet to wait until 70. That way I could capture the 8% increase a year for delaying from age 66, and then enjoy that extra money for a long time past the breakeven point in my late 70s (and my wife after I pass). Time will tell if that was a good move or not.

Registering for Social Security retirement benefits
My plan and hope was to register online, and not have to spend time on the phone or waiting (more…)