Harsh But Succinct

Yahoo Finance had an article titled Pandemic Upends Retirement Plans For A Third of Americans citing that some people are delaying retirement due to insecurity about their finances/readiness while others are retiring earlier than expected because the pandemic has caused them to reassess their priorities and retiring earlier because of the forced hand of job loss at an age where finding a new job becomes more difficult. 

The word upend evokes an image of violence to me. Not physical violence but more like a huge disruption that someone is ill prepared for. Using that definition, it seems like no one would want any part of their life upended, I certainly do not.

Barron's took yet another look at the 4% rule, offering ideas on how to adapt to a world of much lower interest rates than existed back in the mid-90's when the 4% rule was devised. Getting your withdrawal process wrong such that you run out of money early would certainly be upending. Years ago I came up with the quip that being 80, healthy and out of money is a bad spot to be in. 

Read the article if you can access it. It's not incorrect but I do think it can be simpler by being flexible and avoiding all of the math that the article avers by simply taking no more than 1% of whatever your balance is every three months. That could lead to inconsistent income which is one way that flexibility comes into the equation. I first wrote about this idea with the tag line "no matter what you've got, 4%" per year. Someone observed that with "no matter what you've got, 4%" you'd never run out of money and that you'd leave a lot on the table when you died. That's technically correct but the nature of life is that we have to pay for one-off, unbudgetable expenses like vet bills, home repairs, new tires, whatever else might be relevant in your life. "No matter what you've got, 4%" can provide flexibility in the face of one-off, unbudgetable expenses.

We've looked at ideas related to monetizing hobbies, downsizing and some other things to enhance this sort of flexibility but yesterday, I may have been exposed to a different way, or at least a modification of finding a post retirement career. Yesterday I went to a small get together, a college buddy was in town visiting/doing work with his boss who lives here in Prescott. Their company seems is a portfolio of small start ups that they invest in but also seem to play varying roles in helping these companies start up...if I understood correctly. Without getting specific, they are involved in tech, consulting, a new use for an existing material and a couple of other things. My buddy is my age and his boss is definitely older than us, not sure how much older but in the realm of normal retirement age. The excitement and energy in telling me about the startups (the ideas were crystal clear, their role in these start ups wasn't) was genuine and purposeful. If you can find something to be that excited and energetic about at 60, or 70 or 80 (no way he was 80 and I can't imagine he was 70 either) then the easier of a time you'll have deriving some sort of post retirement income if you need that flexibility in your financial plan. 

Another aspect of being more flexible is literally being more flexible physically. I say on here a lot that a ground level fall for a person in their 60's or older can be a life altering event, upending everything depending on how serious the injury. The probability of serious injury is tied to habits related to exercise and diet. Building and maintaining muscle mass and preventing bones from getting particularly brittle is a great way to avoid having your life upended from such an accident. 

This will seem harsh but it is succinct, it is crucial for successful long term aging to maintain the ability to pick up heavy things, walk normally, run and jump even if you can't do those things the way you did when you were 25.

Back in October, we took a short trip to Kanab, UT and one of the hikes we did was Buckskin Gulch. There are two ways in, the long way and the short way. We took the long way. Once we got to the end and headed back, we went for a distance on the short way just to see if it was prettier or more interesting. We only went a short distance on the short way before heading back but there were two spots that required very modest scrambling (using all fours) to get up three or three and half foot boulders. Again this will be harsh but succinct, going up these boulders required just a little flexibility and strength and going down required just a little bit of strength and ability to jump. If this sort of thing is a source of fear, you probably have some work to do but the good news is that all of these things can often be built back up. There were people younger than me negotiating these boulders slowly, fearfully and unconfidently and that's unnecessary. Don't be an old 68 where falling down in your kitchen ruins your life.