David asked each of MFO’s traditional contributors to share a few words about what we’ve been thinking as we watch events, both near and distant, personal and political, transpire.
I think I’m … Continue reading →
I’ve been officially retired for just more than two years. During that time, I have been asked numerous times about when to take Social Security retirement benefits. My general response is that it pays to delay receipt of benefits to age 70. After that, there is no incentive to delay other than potential income taxes.
A recent study, “The Retirement Solution Hiding in Plain Sight” by United Income (June, 2019), indicates most people would say “yes” to making one simple retirement planning decision that could mean more income during retirement. But the same study shows that 96% of retirees take their first Social Security check at Continue reading →
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 Continue reading →
It’s minus 3 degrees this morning, with a thick blanket of snow on the ground, and winds are making it feel like 20 below. There is little compelling reason for this retired guy to hustle around and get outdoors, so it’s as good a time as any to think about the so-called market meltdown of 2018 and offer some perspective on what is really important for individual investors to consider.
A quick look at my Schwab accounts tells me that since January 1, 2018, through January 18 of this year (12 ½ months), my total portfolio value is Continue reading →
“Some people make more than a career out of their work. They make a difference.”
It’s been more than a year since I retired from my position as Portfolio Manager and Chief Compliance Officer with PDS Planning in Columbus, Ohio. One of the many retirement cards I received from clients and colleagues contained the above quote. We never talked specifically about “making a difference” while I was working. However, as I look back over 30-plus years, we certainly did make a difference for many, many individuals and families who entrusted us with their dreams.
People can choose to make a difference in any Continue reading →
There have been many changes for me since August 31, 2017. On that day, I officially retired as partner and Chief Compliance Officer of PDS Planning, Inc. in Columbus. Having worked for a total of almost 50 years (five of those while I was in college), there was more than a bit of trepidation as I neared retirement. Would I really fill my time? Would I find myself longing to be at work again, missing the daily interactions with colleagues and meetings with clients? Would I be able to sit back and not be on top of the financial markets? These were just a few of the thoughts running through my 67 year-old brain as I cleaned out my desk and office.
Notice that I did include the future of the company I helped build in Continue reading →
The fifth in a series of articles
For me there has always been a disconnect between the concept of wealthy living and the size of a person’s bank account, retirement account, or other traditional measure of wealth. Enjoying a wealthy life should not be determined by how much money one makes or has amassed. Wealthy living is doing those things that make life inspiring, rewarding and worth living – helping young people improve reading skills, assisting at a food pantry, sorting clothing at a resource center, collecting gifts for underserved children at holiday times, volunteering at a hospital or hospice, having a part-time, fun retirement job that is Continue reading →
The fourth in a series of articles
My original intent was to retire when I turned 70. However, as I noted in Part 2 of this series, the realization that “it’s time” bumped up my retirement to this fall, when I turn 67. Thus the mental switch was flipped. Then the “Can I afford to retire?” review and decision was made. In my last blog (#3), I was able to determine the anticipated timing and amount of distributions from my retirement plan account. Now I come to health care – what might future costs be, how to survive the gauntlet of Medicare, Medicare Supplement Insurance, Prescription Drug Insurance, and other pieces of this constantly changing puzzle.
The changes since the Affordable Care Act was implemented are Continue reading →
This is the third in a series of articles.
My original intent was to retire when I turned 70. However, as I noted in Part 2 of this series, the realization that “it’s time” bumped up my retirement to this fall, when I turn 67. Thus the mental switch was flipped, then the “Can I afford to retire?” review and decision was made. A large number of people find that their retirement plan (IRA, 401k, 403b, company pension, profit sharing, or other) account is the biggest part of their financial picture, often bigger than any Social Security benefits for which they qualify. My own picture is probably not that much different.
Social Security retirement benefits are much more modest than many people realize, according to the Center on Budget and Policy Priorities. Benefits represent Continue reading →
This is the second in a series of articles.
Over 36 years of providing a financial advice, I have heard a number of clients tell me, “You will know when it’s time to retire.” My original plan was to work until I turn 70, since I truly love what I do. Over the last couple of years, however, a number of friends, relatives, and colleagues have passed away rather suddenly, or they developed chronic health issues that will greatly limit their quality of life. This caused me to re-consider my retirement timeline, especially in light of what my wife and I would like to do over the next ten years. I will be 67 in September of this year. It’s time.
As an owner of a small business, it’s easy to think Continue reading →
This is the first in a series of articles on preparing for retirement. The next few will deal with what retirement looks like – what I will do as I enter another stage of my life, Social Security planning, cash flow expectations, investments, planning for health care, eventual downsizing and/or re-locating, and other topics I am finding important.
In my 36 years of helping clients plan for their retirements, there have been a number of things I now refer to as truisms that ring consistently for most of those clients. These are not retirement planning items, but they will smooth the path toward retirement. Readers of my commentary know most of them by heart, but I am personally more aware of them as I prepare for my own retirement later this year. Here they are in no particular order. Continue reading →
2016 was the year of surprises. Conventional wisdom and expectations were mostly proven wrong. Think about the following events. It was common knowledge that the Britain vote to leave the European Union would fail. Common knowledge was wrong. At the beginning of 2016, all major investment firms suggested loading up on European stocks and reducing domestic exposure. They were proven wrong. Many of the same firms recommended investing in large U.S. companies over small companies. They were wrong. The polls and broadcast media told us the U.S. presidential election options were two: whether Clinton would win by a small amount or by a landslide. The polls and media were totally wrong, and they are still blaming everything and everyone else but themselves.
Economists, investment experts, and the media agreed that a Trump victory would mean a Continue reading →
It’s a funny thing, momentum. Some investments can do nothing at all for years, then suddenly produce very strong performance numbers. At the same time, other investments will have years of consistent out-performance and then, seemingly overnight, crash and burn. More often than not, these behaviors happen to individual stocks and sector funds, although some diversified funds fall victim to similar behaviors. Investors themselves often act in ways that lead to their own crashing and burning, causing them to think they are always late to the party, or that the punchbowl was taken away just before they arrived.
Behavioral finance is the study of individual investor Continue reading →
Investors with any experience at all can recite the long-term results: the U.S. stock market has averaged about 9-10% total returns over the last 30 years and about 6% the last 15 years. The bond market has averaged about 5%. In truth, the average stock market investor has gained only about 3.5%, on average over the last 15 years, and the average bond investor only 3.8%. The lower investor returns are due to the inability of people to stay in the markets during turbulent time periods, when they cash out near market lows and then miss out on corresponding gains. All kinds of studies have shown that staying invested pays off, but when risk becomes reality, investors become their own worst enemies, seemingly embracing the “sell low, buy high” concept they are trying to avoid. Bond investors have realized gains that are almost 25% lower than average, for the very same reasons. Continue reading →
