Retirement 101

From time to time our Community Homeowner Association has a speaker come in to give a seminar or workshop on various subjects. Today I attended a two hour workshop by a Financial Planner called “Retirement 101“.

Honestly I was afraid it was going to be one of those annuity sales jobs like you get when you take up those offers to get a free meal at the local steakhouse, for sitting through a sales pitch.

This speaker was really good at not making it feel like it was, but he was laying out the case for using a “fee only” financial planner, like himself. You couldn’t blame him for that. As with any presentation, you always get some good ideas and reminded on some things that maybe you forgot. If you need a financial planner, the speaker did seem to be a good choice to consult with.

Have A Financial Plan

The speaker started off with the point that most people don’t have a financial plan and you really need one. Here we are sitting in a Del Webb community where the average age is over 70 and I am thinking if you don’t have one by now, you probably never will!

He makes a good point that having a financial plan gives you “piece of mind”. Even if part of your portfolio is not doing well, it may serve it’s purpose in your overall plan.

I read somewhere and it makes sense to me, that the reason most people fall short is that they don’t stay with their plan.  They jump around.  Having a financial plan and sticking with it, would payoff.

Fear Of Running Out of Money

The financial industry really plays on our fear that we are going to run out of money. We want to maintain our lifestyle to the end of our lives. It’s a real fear most people have. Securing our financial well being is important. We know this by now, that no matter if you use a financial advisor or not, you need to educate yourself about financial matters. If you are married, keeping your spouse informed is a must.

As we get older, most of us become more conservative with our investments, maybe allocating more to fixed income and bonds which we can have mature when we need the money. Fixed income is less volatile also.  A bond ladder works for me and others as well.

Create a Reliable Stream of Income

The goal is to create a reliable stream of income that would fulfill our needs when we need the money, with as little risk as possible.  Whether it’s from stocks, bonds, REITs, annuities, social security, pensions, real estate, or a combination of these, it’s up to each person to decide what is best for them and their risk tolerance.

AARP says Social Security benefits provides 39% of people’s retirement income on average.

The speaker points out as we start taking on more risk than we are comfortable with, that is a source of stress, something we don’t need in our retirement years.

Who Can You Trust With Your Retirement Investments

It was pointed out that a fee-only financial advising firm work as independent fiduciaries. This type of arrangement seems to be structured so that the advisor works in the best interest of the client and fully disclose conflicts of interest that could bias their recommendations.

He laid out a pretty impressive list of services advisors provide like portfolio construction, tax planning with the new tax reform changes, estate planning including what legal document you should have, when to take social security, understanding fees, and providing for long term care.

Executing a financial plan can be overwhelming  and having someone on your side may help. This did appeal to many in the audience including those needing help because they have lost a spouse who took care of the finances. There were also  people who were very knowledgeable about self managing their financial matters in the audience.

Whether you go with a Financial Advisor or go it alone, monitoring and staying on top of your investments in retirement is a time consuming job. But it’s one job you can’t retire from, if you want your retirement savings to last.

No one can guarantee that you’ll make money from
investments you make. But if you get the facts about saving and investing and follow through with an intelligent plan, you should be able to gain financial security over the years and enjoy the benefits of managing your money. – U.S. Security and Exchange Commission
As with any seminar I always learn something or at least get reinforced on principals that I don’t need to forget. Having outside speakers come to talk with us on relevant subjects is another benefit of living in an 55+ Retirement Community.
Thanks to Brad Malia, Malia Financial Group for today’s workshop.
Robert Fowler
Del Webb Communities

Can 55 Retirement Communities Make You Happy?

John wanted to have a happy and full-filling retirement.

John considered what would be needed to have a happy retirement.

Thinking of things that would be beneficial to a happy retirement and that was under his control,  would help John find a happy retirement.

John remembered hearing Financial Security would help, at least according to all the financial advisors. He had been working for nearly 40 years and invested in his company’s 401K from the start and owned some stocks, bonds and a little real estate. Being financially secure alone would not make a happy retirement for John but would help.  Thankfully, he had that covered.

  1. John knows having a happy retirement could only be truly enjoyed if he had good health, living free of chronic disease. He knew healthy people are generally happy people. He also knows that to be healthy, one needs to be active.

John had a friend who was happy living at an Active Adult Living 55+ Community and was very active with walking and use of the gym at the clubhouse. His friend  had really gotten into a game called pickleball and played for one and a half hours two or three times a week, or whenever he wanted as a game was usually going 6 or 7 days a week.

John’s friend also said there was a hospital and plenty of medical office buildings nearby where his Active Adult Community was.

John considered these as some of the things that could lead to happy retirement.

  1. Having just retired, John was missing the social activity with friends from work. The people in the subdivision where he has lived for 20 years are still working and young couples are moving in. John pondered how to make new friends at his age. He was not meeting that many new people.

John’s friends living in the 55+ Community are always talking about the new friends they have made. With all the activities they are sharing with people, this introduces them to people they like and which share their interests. They go to lunch or dinner with them, even sometimes travel with them.  But mostly just share activities like going to trivia, playing bocce,  putt golf  or playing cards.

John considers that this may be the way he can make new friends and be more active.

  1. John has a 4 bedroom, three level home with the bedroom upstairs. Last year, John’s wife had a medical procedure and it was difficult even bringing her into the house with the steps, then she had to sleep on a day bed in the living room for a week,  with only a half bath on the main level. This is a problem which needs to be addressed.  His home is no longer ideal for their needs.

Home repairs were also getting expensive with aging and not very efficient appliances. Tree limbs always seeming to be falling down from the now mature trees.  Not to speak of the high property taxes he was now paying on his suburban home in an area that was becoming more urbanized and expensive.  Traffic was a nightmare and the road warriors were always in a hurry and would run you over.

John had visited his friend at his 55 Community on the outskirts of the metro area.  It was close enough to restaurants and shopping but the traffic had not gotten bad yet.  There were community theaters, putt golf, and movie theaters and really anything you would want nearby.

The residents really have a good social lifestyle and seemed to enjoy the people, even more than they did the amenities.

His friend just turned 70 years old and now gets a senior exemption and will not have to pay school tax, which saves a lot of money.

The homes are ranch style and come in different model sizes ranging from 1450 square feet to over 3,000 square feet. Some have basements and some have lofts. John’s friend has a Cumberland Hall model with 2,777 square feet including a nice sun room.

John considered how having a one level ranch house with no steps, more energy efficient newer appliances and HVAC, and livable floor plans with a universal design would accommodate his needs.

Lower property taxes and landscaping included in his HOA fee would save some money.

    1. Since John is no longer working,  he figures it would be nice waking up with a purpose and passion again. With so many things to do at an Active Adult Community, there would always be something to look forward to and people to do it with.
  1. John knows he and his wife are entering his 70’s and with the life expectancy of the average American only 78, well he is concerned about a death of a spouse and what would happen to the survivor.  He hears good things about the social support from neighbors living in an Active Adult Community and the “we are in this together” feeling.

John wants a happy retirement and realizes that moving to an 55 plus Community will make their retirement living easier and happier.

John’s plan is to get an hour of physical exercise a day, make new friends and enjoy being social while being active in learning and traveling as much as he can. He believes living in an Active Adult Community will help him and his wife do that.

Next blog post, we explore how John approaches finding a home in 55 Communities.

Robert Fowler