I never imagined myself completely retired. I know this may be a startling admission for a Financial Planner of nearly 30 years. But it is true. I have dearly loved the work I have done since starting this firm. I have enjoyed the technical challenges, the personal relationships, the associations with professional colleagues, the challenge of building a business. The best part of this practice has been being in the meetings with clients, working on their financial matters. I never tired of this. What changed? Beyond the simple answer of "I did", the reality is two things changed: health and relevance.
Fortunately, as a firm, we planned for my departure. This process began over 10 years ago. Matt became a co-owner and then became the majority owner. Beginning some 7 years ago, we completed a series of purposeful steps to transfer all aspects of firm management and client relationships to Matt and ultimately to Juan and Adam. This transfer was not incidental, it was imperative. The only way the firm could be positioned to continue was to make these changes. These transfers are now complete. As I have said many times, there is an irony in any such successful transition. You work hard to make yourself irrelevant, and when your work is complete, you are irrelevant. A successful, and bittersweet result. Not only do I have no regrets, but I am also deeply grateful and profoundly satisfied with the result.
The other change was wholly predictable yet still, frankly, unexpected. At the tender age of mid-seventies, I've been in what is no doubt just the early stages of a confrontation with the ravages of aging. I now find the time and energy required to maintain reasonably good health to be a very large portion of that available. It seems to me that in the earliest stages of physical decline, I just ignored or minimized the signs, sometimes making minor adjustments to accommodate chronic pain or weakness, sometimes making major adjustments. This rather than getting things fixed.
Again, I have no regrets. We all must make decisions and choices based on the knowledge we have at the time and based on the circumstances we perceive at the time. And like so many aspects of human existence it is so easy to look back and see what should have been done some time ago. And like all of those other aspects, it is pointless and self-defeating to pine over decisions that could have been done better with the benefit of hindsight. No, I am grateful to be in this here and now, particularly with respect to the medical care now available. I am in the process of getting those things fixed that can be fixed.
The biggest revelation in all of this for me is the emotional challenge. Having helped many clients through this very territory, I expected it would be easy-peasy for me. Well, it has been, as I said, a challenge. I've experienced a range of everything from joyous anticipation to uneasy dread. Perhaps the biggest dread is finding myself with nothing to do. I really doubt that will happen. I cannot recall hearing a recently retired person telling me that they do not have enough to do to fill their time. I think I'll be as busy as I want to be.
I've resisted the impulse or expectation to plan it all out. In some ways that seems like it's what I should be doing (because I'm a planner, you see). Some planning, yes. But what I'm looking forward to is the freedom. Freedom to do or not do as I wish. By the end of 2023 I'll be off all boards and committees, and I'll be retired from employment. My expectation is that this will be my new blank slate. I'll play more golf and do more flyfishing. My beloved and I will do more travel, both near and far. Beyond that, I'll just see where it goes. That's my plan. I'll let you know how it goes.
Writing this at the end of the third quarter 2022, you might have noticed that the market is down considerably since the beginning of the year. I've noticed too. I'm not immune from the distress of seeing my portfolio value decline at the very moment when I've chosen to retire. Fortunately, from my experience of having counseling conversations with clients in this situation, I have all the necessary talking points to conduct that conversation with myself, and I also know what to do and what not to do in this circumstance.
First some talking points:
- We've known, and always said, that the market will go down. We just didn't know when. It is now. Your portfolio was designed to absorb downturns. This is part of the plan.
- The urge to time the market leads to foolish decisions (see our recent blog on this).
- If you exit the market based on fear, how are you going to purge that fear to reach a sound re-entry decision. If you let fear control the decisions, you will sell low and buy high.
- If you think the market is scary now, wait and see how scary it is (was) when you should re-enter (have re-entered).
- You can be quietly smug that owning assets at the bottom of the downturn gives you a very high expected return from that point. This can also be an opportunity for tax-loss harvesting.
- What is important is not the absolute value of the portfolio. What is important is the soundness of your financial plan given the current circumstances. Your plan is sound.
Now what to not do and what to do:
- Don't just do something,
- Sit there.
The impulse to grab the wheel and just do something can be pretty strong, but the information out there is not actionable, and as mentioned above, fear is probably the most perverse motivator for making financial decisions. Do nothing. Your portfolio is designed and structured to withstand these circumstances. Let it be.
Reminder to get your quarterly Credit Report from: Experian
The table below shows the returns through September 30, 2022, for selected investment asset classes. In most cases, the results below are appropriate benchmarks for the related mutual funds in your investment portfolio.