Managing your trip in a risky environment
Risk is sometimes the elephant in the investing room, especially for retirees. People understand stocks as ownership and bonds as debt, but risk is hard to grasp and instinctively dangerous.
Later Living has recently published four posts on risk. Risk and high returns go together, so retirees who want high returns must deal with risk. Here are the four earlier posts knit together into one risk story: Continue reading
Afternoon at a long-term care facility
Retirement might be easier if spending needs stayed nearly constant from year-to-year, but they don’t. Long-term care, motor homes, family members in need, and other special plans require lumps of cash at particular times. Continue reading
Investment risk is good in that it accompanies greater long-term wealth but it is bad if investors sell during a downdraft. Stocks are riskier (more volatile) than bonds yet offer more long-term gain.
Should retirees dial back their risk exposure to, say, 30% stocks, as is sometimes recommended, or can they carry much more risk, perhaps up to 70% stocks? The answer follows their goals and plans. Continue reading
Risk in stocks and bonds–Seventeen years of returns
When should someone retire? The answer may be fraught with danger if the retirement portfolio is overly weighted to stocks or other risky investments. There is one small window of time surrounding the retirement date in which sharp declines in stock values can ruin retirement. Continue reading
Risky? These women compete in a roller derby where they skate, block and score on a concrete floor. There is risk—in the sense of loss or injury. “No pain, no gain,” analogizes the SEC, which is almost a sports metaphor: play hard, risk injury and you may win.
There are standard narratives about investing that lead people to particular strategies. Risk, we’re told, infects all investments, and it is often viewed as potential injury or loss. Continue reading
“Take my picture, please, please, take my picture,” said the pretty blond teenager. She was with two friends, a girl and boy, and the threesome was headed into Walmart near Pineville, Kentucky. The two girls stood near one another, and the boy, wearing a baseball cap, jeans, and a light jacket over his lanky frame, drifted a few feet away. I asked him if he wanted to be in the picture, but he said no.
I took two pictures, then she wanted to see them.
“Oh, my eyes are so blue. You have a really good camera,” she said as she continued to look at herself. Continue reading
There are so many news articles about poor retirees that it would be nearly impossible to count them. In opposition to that trend is an opinion article (may be behind a pay wall) in Friday’s (Jan. 24) Wall Street Journal. Sylvester J. Schieber and Andrew G. Biggs, both of whom have deep experience with Social Security, report a serious data problem with many estimates of retirement income.
Here’s the thesis: the common narrative “about the declining income prospects of retirees is not true.” Continue reading
These guys may be on the table next year
Retirees and others are digesting prolonged economic hardships, and like “Old Love,” it can be hard to spot. Two recent reports from Merrill Lynch pin down what many retirees experience in their own families.
In my mid sixties I let a friend talk me into motorcycling, which I had not done since my twenties. I bought a used Honda Nighthawk and got a driving permit from the Georgia Department of Driver Services. We rode around the area for a couple of months, and it seemed as if the old handling skills and road savvy were coming back. So I scheduled and took the necessary driving test, and I thoroughly flunked it.
Under the watchful eye of a test administrator, applicants must ride a set of maneuvers on a closed, tightly laid out course. Limping home with a wounded ego, I had to relate the failure to my family and friends, and more importantly, I had to devise a strategy to overcome the defeat.
Country living for a retired man
Barbara is on vacation. She went exploring along the northern California coast with two friends she has known for decades. She has been having a wonderful time, including taking a close photo of a bear near a cabin. When we talked on the phone, she was as excited about the bear as you might imagine a twelve-year-old girl scout.
I have been alone with Cicero and the rain. Since Barbara has been away, it has rained everyday. The woods, bushes and grass are growing fast enough to watch.