Welcome back to our much-anticipated May 2024 edition of “Retirement Planning Headlines,” where we save you the hassle of combing through endless financial articles. This month, we’ve even had listeners chime in with topics for our deep-dive discussions.
Articles Discussed in this Episode
How Much Should You Spend on Vacation?
5-10% of take-home pay on VacationsNever go into debt to pay for vacationBeware of luxury creep and entitlement creepDon’t get caught up in Instagram vacationsDon’t be a vacation scroogeIs planning for age 95 longevity overkill?
How long should you plan to live in retirement?The industry practice of planning to 95 but a new report shows most people won’t reach this ageThe report notes that “for the almost 30 percent of the 65-plus population with diabetes, there is less than a one percent chance they will reach 95a typical 65-year-old man with no chronic conditions, there is only a 19.3 percent chance of living to 95. A 65-year-old with high blood pressure has slimmer odds, with a 17.5 percent chance of living for another 30 years.Plan to 95 and live to 86 could potentially spend an additional $447,000How to think about planning to 95Family health historyYour health conditionMaking adjustments along the wayRisk profileLegacy goalsRetiring Early Is Your Dream. 7 Steps to Make It Come True.
Steps to Weigh Early Retirement Decisions
‘What Was I Thinking?’ The Big-Ticket Items People Regret
RolexVacation home on land not ownedRVsClothing salesman with a $1,800 cover-upThe Downside of Delayed Gratification
Research shows that if we decide not to use something (delayed gratification) the possession will feel more specialCan lead to us not using at all or delaying too long instead of embracing the moment.The big takeaway is that delayed gratification isn’t always the answerThe kids with the marshmallows! (shout out to Daniel Kahneman!)All the kids that were able to delay gratification DID SOMETHING to distract themselvesHow Much Happiness Can Your Salary Buy? Researchers Can’t Agree
Money buys happiness. With diminishing returns. And no magic numberMoney buys happinessMoney matters for happiness, but not enormouslyIt isn’t what money buys, but the choices it affordsDiminishing returnsAs income increases, each dollar makes less of a difference in happinessMore about % change than $ amountMagic numberThere is no magic number ($75,000 or $110,000 in today’s dollars)Not a refutation of the underlying premise, but it does bring up nuances to the argument ($75k is an oversimplification)Ugh. Do I Really Need a New Roof Right Now?
Interesting for the topic, but also the philosophyRoofs can last longer than conventional wisdom, but the range is huge and depends on the environment, how it was installed, etc.The columnist had a roof leakPaid a roof inspector -and was told $2500 for a repairAlso got an opinion from a roofing contractor – $18,000Paying for the inspection was well worth it$2 Million Is Nothing’ Suze Orman Warns Don’t Retire If You Don’t Have At Least $5 Million Or $10 Million Saved
What she got wrongDollar amounts apply differently to different peopleWhat she got rightLonger retirements mean more things will change so proceed with cautionHOW MUCH IS A MEMORY WORTH?
How do we value our memories? Can we value them?With the benefit of hindsight, how much would I pay for that same trip knowing how much I value the memories?Memories of experiences tend to increase in value over time – even if the experience doesn’t last long. A concert, for example, may only last a few hours.Physical “Stuff” tends to last longer (gadgets, jewelry, toys), but the value usually decreases over time.EVEN NEGATIVE EXPERIENCES CAN HAVE VALUEExperiences are shared, and things are comparedDan Ariely, a behavioral economist, and Duke University professor, recommends some variety and doing something to make the memory more intense.For example, add adventure into a relaxing beach vacation – KiteboardingThe takeaway: If we want to consciously create a lasting memory, choose a unique (variety), exciting (intense) event that you already have an understanding or interest in.Stock Investors Have Already Won the Election
John Rekenthaler @ Morning StarRegardless of the election outcome, “Stock investors have already won”Notes that neither party nor candidate is inclined to really alter the economic system, which has been good for stocksMuch concern coming out of the financial crisis (anti-capitalist sentiment from both sides, more regulation, Occupy Wall Street) but largely fadedBoth sides talk about changeDemocrats – regulation, redistributionRepublicans – antiregulation, free marketsNeither does much to really alter the landscape“In short, there are plenty of reasons to sweat the upcoming election.”Social issues, immigration, foreign policy, etc.The stock market is not one of themRemember to subscribe and follow our podcast for monthly updates packed with practical advice to guide you through your financial future with clarity and confidence. Stay tuned and stay informed!
