As I look back at 2024, a few things changed for me. As per my plan with John, I spent less time at the office while John added more tasks to his work portfolio. While I’m still engaged in our financial planning practice, I’ve cut back. Having extra hours each day puts me on the receiving end of a discussion I often initiated with clients over the years. As they (you) approached and entered retirement, I typically asked: “We know what you’re not going to do (i.e., work), but what are you going to do?”
JP Morgan has released it's latest stack of fascinating charts reflecting the current state of the economy and the stock market. We thought we'd share a few of our favorites.
We deal with families, so we understand some of the dynamics between adult children and aging parents. In many households, we know it isn’t easy to talk about money from an intergenerational perspective. In some instances, elderly parents are not likely to want their adult children to know they may not have enough money to last their entire lives. In other instances, adult children may be making (poor) spending decisions because they assume they will be left a bigger inheritance than they’re likely to receive. Suffice it to say that money is a sensitive subject.
It’s staggering when you consider how many people are trying to separate you from your money. Early in the post-Madoff days, I once joked to a colleague at a financial planner’s conference that we should add a fee for our integrity. Imagine the email clients receive at year-end: “I didn’t steal any of your money this year. Attached please find an invoice for my integrity.” Sadly, that gallows humor joke has yet to wear out as the years have passed.
It’s easy to be seduced into going along with the herd when it comes to investments. When the stock market soars, we all get a little more bravado. “There’s nothing like the stock market! It’s so easy to make money! Buy! Buy! Buy!” Similarly, when the stock market is falling, going from downturn to correction to bear, it’s just as easy to switch gears: “The market is falling and is never going to stop! Get me out! Sell! Sell! Sell!” Yes, whiplash is a thing when it comes to investing, but only if you let it be a thing.
I used to teach Economics to evening students. They were mainly adults working full-time jobs and attending college at night. To many of them, the idea of understanding a supply and demand curve, or even a chart of any kind, was terrifying. I always started with the basics, and as we added pieces, I could (almost) literally watch the light bulbs go on. They got it!
When you reach a certain age - and it appears I’ve reached it - you watch your friends age with you to various degrees. Some age remarkably well, while others suffer through serious illnesses. Sadly, some even die. Through it all, I’m constantly reminded of the lessons we share with our clients, who are also aging.
“Sequence of events risk” refers to how markets perform after dollars are invested. The reason why it’s significant is because when a person retires may determine whether their plan is ultimately successful. Unfortunately, you can’t preplan a sequence of events as it relates to investment performance.
If you’re of a certain age, you may recall the famous song by the legendary songwriter Burt Bacharach, titled: “Make it Easy on Yourself.” This isn’t about breaking up (“which is so hard to do”) but about assuming your Social Security number has been hacked. Because there have been so many large-scale hacks, you should assume your Social Security number is on the dark web and available for sale or use by criminals.
The more people I speak to, the more people I find who don’t fully understand the concept of independent living. Considering how much independent living communities spend on advertising, I’m surprised how little is known about their benefits and programs.