Money Trailguide, No. 16

Quick Hits…What I’m Reading

• How Their First House Became This North Carolina Couple’s Forever Home – Nancy Keates, WSJ…Interesting article on a local couple found in The Wall Street Journal.

• A Timbered Choir – Wendell Berry…I am no poet, but I have come to really enjoy anything that Wendell Berry writes.  I love how he describes natures impact on the human soul.

• The Solace of Fierce Landscapes – Belden C. Lane…this was recently recommended by a friend,and I have literally just started it.  However, what I find interesting is his highlight of the paradox of wilderness: “There is an unaccountable solace that fierce landscapes offer to the soul.  They heal, as well as mirror, the brokeness we find within.”

3 Ways to Get Beyond a Retirement Rut

Staying active and stimulated can be difficult enough for retirees. But during the pandemic, days, weeks, and months started blending together, creating endless doldrums that are still lingering for many people.

As the world has opened back up, we all should start looking for ways to broaden their horizons again. Try one of these three ideas to break out of your retirement rut and improve your Return on Life.

1. Do Something outside your comfort zone: In our hyperconnected digital world, you don’t have to leave your house to try something new. Group exercise, cooking classes, books, movies, music, social hours, and games are all just a tap or swipe away. It’s never been easier, or more affordable, to try out a bunch of potential new hobbies and see if anything sticks.

However, taking a few actual steps outside your major comfort zone — your home — could provide the extra push you need to start enjoying retirement again. Start small. Try that new restaurant a couple towns over. Switch up your exercise routine and try jogging in a park instead of through your neighborhood. Swing by a farmer’s market on Saturday instead of having all your produce delivered.

2. Change your daily habits to be more aligned with what you want to achieve: For many people, the winter blues feel bluer because they’re lagging behind their New Year’s resolutions. According to Forbes, 80% of people abandon their resolutions in February. A common reason for these failures is that, flush with optimism for the year ahead, people set goals that look good on paper (or social media) but don’t really resonate personally.

Reassessing your goals for the year and putting daily, actionable steps in place to work towards those goals could freshen up your retirement routine and improve your chances of succeeding. A great first step is to get as specific as possible about what you want to achieve and how you’re going to achieve it. For example, if you really want to get healthier, you need a better goal than “get healthier.” Put three trips to the gym every week on your calendar. Set a weekly running goal. Plan out meals for the week in advance so you cut back on fast food. Or, for some tougher accountability, hire a personal trainer who will help you schedule your exercises or a nutrition coach to help improve your eating plan.

3. Schedule something you have been putting off, such as a trip or a visit with old friends: Is there a pile of travel vouchers on your desk from all the family visits and vacations you had to cancel during the pandemic?

If you’re able to travel safely now, then start making up for lost time. You don’t have to make grandiose plans to pull yourself out of your retirement rut. Getting a few dinner parties or your grandkids’ soccer games on your calendar will give you something to look forward to, and a reason to get moving.

We understand that the retirement transition isn’t a one-time experience. As life goes on, your feelings about retirement are going to change in both negative and positive ways. A comprehensive Life-Centered Financial Plan can give you added comfort and reassurance during the rough patches and the extra confidence to live your best possible life when you’re excited for your next challenge. Let’s talk about where you are on your retirement journey and how our planning process can help.

Keep Your Eyes on the Road

Investing during market volatility can be like driving during a winter storm. Your best plan of action is to focus on what you can control and keep progressing towards your destination.  You might think of your financial plan as the GPS system that you can rely on to keep you on track even when it’s tough to see the path forward.

Here are five aspects of your financial plan that we recommend focusing on as we wait for this storm to pass … and prepare to weather the next one.

1. Your Spending.

The single biggest influence on the success of your financial plan has nothing to do with the markets. It’s how you manage your household budget. Let me say that again for emphasis: The single biggest influence on the success of your financial plan has nothing to do with the markets. It’s how you manage your household budget. As simple as it sounds, age-old advice like “live within your means” and “save more than you spend” really do provide a solid blueprint for building wealth and enduring market volatility. And if you don’t currently have a spending plan, the start of the year is a great time to set one. Pay special attention to any recurring charges that you barely used in the past year, like streaming services, magazine subscriptions, or club memberships. Apps like Rocket Money can help you find those hidden subscriptions that you have forgotten about and get rid of them asap.

2. Your Debt.

Are your credit card bills for the month a little higher than they usually are? That’s not unusual right after the holidays. Hopefully, you made a budget for your gift-giving and travel and managed to stick pretty close to it. If not, review your new household spending plan and look for ways to pay down those and other household debts rather than kicking the can — and the growing interest payments — into next month. Whether the market is up or down when your next statement rolls around, any charges you don’t pay off this month are going to be waiting for you.

3. Your automated plan.

Deciding whether or not to invest when the market is slumping can be very nerve-wracking. In part, that’s because trying to time the market is nearly impossible. A much more dependable strategy is to make automatic contributions to your investment and savings accounts every month. Based on the long-term goals that we’ve discussed, we can adjust how those contributions are used as we analyze various options for rebalancing, diversifying, and growing your portfolio.

4. Your cell phone.

Technology allows us to be more transparent with our clients and keep them involved in the planning process throughout the year. But just because you can check your account balances at all hours doesn’t mean that you necessarily should. Likewise, constantly refreshing your social media and news feeds for the latest financial info is only going to make normal market jitters feel like an earthquake.

According to a study by Charles Schwab, from 2000–2019 declines of at least 10% occurred in 11 years. Annual returns in six of those years were positive, with an average gain of approximately 6%.

In other words, market declines are rarely cause for alarm; they’re just a part of investing. And while past performance is no guarantee of future returns, what goes down tends to go back up, especially when you zoom out and take in your full financial planning timeline.

5. Your values-based financial plan.

A solid financial plan shouldn’t just build wealth. It should help you to live your best possible life at every stage of your life. And as that vision of a best life changes, your plan should be able to change with it, regardless of what’s going on in the markets.

Rather than worry about what may or may not happen on Wall Street tomorrow, let’s discuss the life transitions you know are coming, the goals you want to achieve, and how our life-centered planning process can help prepare you for the next unexpected blip on your radar.