An active retirement is often a happy retirement. What are some easy things to add joy to your retirement? Scot Landborg, host of the weekly podcast, Retire Eyes Wide Open, shares his thoughts on joy and travel in retirement.
Welcome to Episode 8 of Retire Eyes Wide Open. I’m Scot Landborg. On today’s episode - Joy in retirement.
What does it look like? How do you have real happiness in retirement and really live the good life? We’ll tackle it and have some fun, too. We’ll also review the week’s news in the Money Rundown. We’ll talk about the best thing I saw this week. And our Scot Strategy Segment and Listener questions are about traveling on a budget in retirement and living your best retirement life.
This is Retire Eyes Eide Open!
Joy in retirement. How do you have real happiness you’re looking for? I’m going to share with you 10 ways to find joy in retirement. Hint…it’s not just about vacations. Hopefully, you’ll grab some ideas and do something about it. Try something. Try something out of your comfort zone. Take a risk. The happiest retirees I work with are ACTIVE retirees.
Here are the 10 ways to find joy in retirement:
Those are 10 tips for having more joy in retirement. And the bottom line is getting out there and trying something. Something to bring you a little extra joy in your retirement. Some of the things that will bring you joy will bring you personal satisfaction. Things that are going to get you out into the world and get you more active. An opportunity to meet other people, meet new friends in retirement. And finally, finding purpose. Finding that purpose, finding that thing you enjoy to do that may also help people and the community around you.
And that’s the Money Monologue for the week.
Our Money Rundown segment is where we cover the week’s news. There are a lot of media sources out there that are going to help give you updated information about the economy and the markets. My job is to help summarize and synthesize – help pick out a few stories that are most important for you, as a retiree or investor.
Story #1 – Former Microsoft founder Paul Allen passed at 65. Owner of the Seattle Seahawks and Portland Trailblazer and well know philanthropist– the personal computer might not exist without him and the world has lost a hero.
Our heart goes out to the Allen family. But I also brought up this story, the reason I think it’s important is to really highlight entrepreneurs and business owners that make a contribution to the world we live in today. How much attention do we give to entertainers? This is the man, Paul, Allen, without him the personal computer wouldn’t exist. The foundation of our modern economy may not exist. Not only was he philanthropic and giving most of his proceeds to charity but he really made a major contribution in a lot of areas.
Story #2 – The federal budget deficit grew as tax cuts take a bite. This from the wall street journal. The US govt ran the largest deficit in 6 years totaling $779 billion. Up 17% from $666 billion in 2017. The White House says more aggressive stances may be coming in government spending next year.
What does that mean for you? I was reading another article this week about how government spending and government debt may be one of the things that help push this economy into recession in the future so it’s something we want to keep an eye on next year and the years ahead. I think Trump and his administration have been hoping that lower tax rates, although they help increase the budget deficit in the short term, their hope is that economic growth helps grow the economy at a rate fast enough to overcome some of these budget deficits. I think the reality is starting to set in and some difficult choices have to be made. I think government debt across the world is a concern. Something to keep an eye on and hopefully not one of the causes of our next recession.
Story #3 – Small cap stocks are down 10% from the previous high as the S&P 500 was down 5.6% and NASDAQ down 7.7%. Rising rates have seemed to impact small cap stocks the most.
What does that mean for you? It may be time to re-evaluate your allocation. No matter what you have, emerging markets down almost 15% on the year, bonds almost down almost 4% on the year, international down almost 9% on the year. It may be worth re-evaluating some of your holdings. Small caps are down more than large caps. It may be time to look at your positions, sell some things and take some new positions. Maybe buy some different stocks that are going to bode better in the future ahead. But definitely take a look at your allocation because we’ve seen some unprecedented decoupling where international markets have had a hard time. U.S. markets have had a better time. And for you to be successful in the years ahead you want to make sure you’re in the right sector to this market.
And that’s our Money Rundown for the week.
Best Thing I Saw This Week:
My wife Shannon and I had a little respite from our little ones. My mother was in town and we were able to get away for a few hours. Our latest adventure? A mid-week whale watching cruise from Davey’s Locker in Newport Beach California. What a great time. What a great little part of the day away from the office. $16 weekly discount. $16 per person for a mid-week cruise about 2 hours long. A great way to get out on the water and enjoy this beautiful weather that we’ve been having. They even have a covered deck so you don’t get sunburned. Now we didn’t see any whales. Although we’ve heard of Orcas in the area which made us excited. No whales, lots and lots of dolphins jumping and leaping and it was just a gorgeous day.
The little adventure got me thinking. What types of mini trips can people take in retirement and take advantage of some real savings? This is one of the wonderful things about retirement. You don’t have to go whale watching on the weekend. Go during the week when there are discounts and no lines. Also take a chance to rediscover your city. Don’t just focus on the big ticket trips. What are the smaller experiences close to home that can sweeten your life? How about lunch at Fisherman’s in San Clemente? One of our favorite little places. During the week not so busy. Make sure you eat on the left side of the restaurant near the rail, near the beach. Great fish right on the beach. What about wine tasting in Temecula? A Groupon for a hot-air balloon ride or a parasail. Start exploring YELP a little bit and try a new highly rated restaurant in the area. Or maybe try a restaurant in a new area that you’re not familiar with. Or try a restaurant at home like Uber Eats or GrubHub. Try a new restaurant at home. Have them deliver something that you haven’t tried before. What about an electric bike ride? Electric bicycles – some people in the office give me crap about this but there’s a location in Huntington Beach called Pedego that rents electric bicycles. Very affordable, puts a new spin on the bicycle. A lot of people think of bike riding as exercise, right? Well electric bikes let you do and see much more than you would do breaking your back on a bicycle so with ease you can ride all the way down to Newport, right up the Santa Ana trail, ride all the way out to Seal Beach. And that’s not the only location in Southern California where you can rent electric bikes. San Diego has some great electrical bicycle locations as well. There are so many fun little adventures to have in Southern California and fun thing to see. Angela Jugon, the producer in our office, recently went on a tour of Orange County and Los Angeles where they toured some little known, off the beaten path locations that are just fantastic to visit to make a little trip inside of retirement. Go like us on Facebook. Visit our Facebook page. We’re going to be posting some cool travel ideas this week for Southern Californian and some more fun ideas. So go like us on Facebook for more information about strategies for enjoying your retirement right here in So Cal.
And that’s the Best Thing I Saw This Week.
Scot Strategy Segment:
Earlier in the show we talked about Joy in retirement. And I often talk about vacationing. That’s not the only thing to do that will make you happy. It might be the only thing, but it, too, can sure be a great time and a great part of retirement. As much crap as I give vacationing of course it’s a fantastic part of retirement and should be an important part of your retirement. We had a travel event recently for some of our clients and although they loved it, some wanted to know if there were any ideas on traveling more on a budget.
Here are my top ideas for doing travel on a budget in retirement:
Those are my top 8 tips for doing travel on a budget. Hope you found it helpful. Again, go to our website RetireEWO.com for more travel ideas and as we talk socially about the coolest, latest and greatest travel tips for 2019.
That’s our Scot Strategy Segment for the week.
If you want some your questions answered on the air, go to our website RetireEWO.com and click “Submit a Question”. We’ll do our best to get your question answered during the show.
Joining us is today our producer, Angela, who has some questions from some of our listeners. Angela, take it away!
[Angela] Thanks so much, Scot, and hi guys! Our first question comes from Kerry in Huntington Beach
Hi Scot, retirement has been an adjustment for me. I’m missing my old job a bit, and not sure how to maximize my time in retirement. I’m considering getting some part-time work. Any negatives by me doing that?
Well, Kerry, thank you so much for your question. And I’m sorry that it has been an adjustment for you. For some people it’s a very easy adjustment, other people it is a lot more challenging. Are there any negatives for you going back to work part-time? Absolutely not. You want to look, if you’re after full retirement age there are absolutely no negatives. If you’re under full retirement age you might want to look at how that might impact your social security. If you’re taking social security and you’re say, 64, you could have some penalties there so be aware of that. But I would say don’t let the tax tail wag the investment dog. If you want to get some part-time work, just make it happen. You can figure out from a tax and investment perspective how to adapt your plan to adjust to it. The most important thing is this retirement stage of your life, you can succeed at it, you can fail at it, or you can just get by and we want to do everything that we can to make sure that you succeed at this stage of your life. Getting a part-time job or doing some part-time consulting could really energize you and give you a chance to kind of restart this phase and allow you to move into retirement or be in retirement—ease into it a little bit more. Some of the happiest people I see in retirement are active. They’re doing things but they also have some sort of purpose. Maybe they’re volunteering at their local church or at their local parish. Maybe they are doing a part-time business on the side. Getting a part-time job in retirement—don’t have any issues at all. I think, Kerry, it might be a very good step for you as you try to find that fulfillment and purpose that you’re looking for and that you’re missing from your old job. Another thing that people are missing too is their social circle. Not only is it their purpose from work but it’s also their social circle. Volunteering. Getting out there in the community. Different things you can do to kind of build up that social circle and having a part-time job or working as a contractor part time helps you build those new connections.
[Angela] Our next question comes from Andrew in Tustin, CA.
I’m considering moving out of California to lower my cost of living, but I’m weighing the cost of being away from my kids and grandkids? Any advice?
[Scot] Well, Andrew, thank you so much. This is a difficult, difficult question to answer. Honestly it’s easier than ever for people to move out of state. The internet, technology, low cost airline tickets make it easier than ever to live in a different state and still feel connected to your family back home, so that’s the good news. Bad news is there are some things that you’re going to miss and you need to make sure that you’re okay with that. If your finances are tight you might not have a choice. You might have to do it. If you have a mortgage in retirement and need to get rid of it and your means are not very significant, you might be forced into that decision and making the most of it. I would encourage you, there are other options in Southern California. You could get a reverse mortgage, you could look at living in a lower cost community, you could look at living more inland or maybe in Carlsbad or maybe an over 55 community. There are other ways to make your income picture work that don’t necessarily mean you moving out of state. If your finances are good, you may still want to move out of state to save money and I would want to understand why someone would want to do that. It’s an expensive state to live in from an income tax perspective, from a property tax perspective. It’s expensive on a number of levels. I understand where you’re coming from. But also understand that sometimes by moving and by saving that extra money, all you’re doing is adding money to your net worth. You’re going to leave an extra $500k to your kids or grandkids at the end. Why? Is that really what you want to do? If moving out of state is going to bring you more of the life that you want in retirement then don’t hesitate. Do it. But if you’re moving out of state because you haven’t embraced the fact that retirement is a different stage and you’re going to have to rebuild your social life, your personal life, your value, your purpose. Understand that’s going to be hard. That’s going to be difficult. Don’t fun away from that. As long as you’re not running from that then moving out of state is not an issue at all. And understand that you may be missing out on some things with your family. You might be missing some of those moments with kids and grandkids and what is that worth to you? How much is that worth from a financial perspective? If it means less money to the kids and grandkids at the end of the day because you stayed in California, I could promise you, they’re not going to worry about that. But, again, if you think retirement is best out of state, you’re going to find the fulfillment that you want, you’re going to live the life that you want, I can promise you that your kids and grandkids are going to be behind you. There’s ways with technology and there’s ways with low cost airline travel that you can still be connected with them. Hopefully that helps.
[Angela] And our final question is from Kevin in Yorba Linda CA.
How do I plan a travel budget in retirement? This seems like an impossible thing to do not knowing where to go with my wife and not knowing the potential itineraries. Any tips on budgeting for travel in retirement?
[Scot] Well, Kevin, you hit the nail right on the head. This is not an easy thing to do. What I would encourage you to do is try your best to set aside a budget for the next 12 months. And then do it for the next 12 months after that and the next 12 months after that! You don’t necessarily have to stick to that budget exactly. You have some flexibility but it’s important that your financial advisor and tax advisor are on the same page. If your travel budget for the next year is $10,000 then there are certain things that you may want to do to withdrawal money from various accounts to come up with the cash. If your travel budget explodes to $50,000, now we would have a totally different situation. Maybe that bumps you into a higher tax bracket. Maybe you want to spread that over two years instead of one. The most important thing is to continue to evaluate your plan. Do it a couple of times a year. Continue to evaluate your spending means, where you can pull from and when. And also, understand something else, Kevin. If you have big, fat retirement accounts, you’re going to be forced to pull from those once you reach 70 ½. You may want to pull from those a little bit early. Spread out that withdrawal rate from the moment you retire until the moment you turn 70 because once you turn 70, you’re going to have less options. You need to start thinking about your retirement income picture as the big picture. How are you pulling money out over the next 10, 20, 30 years. Where is it going to come from and when? How are RMDs going to impact your situation? How are taxes going to impact your situation? And have a plan that’s flexible enough to give you that travel budget for when you need it. You don’t know how much you’re going to travel this year, next year or the year after necessarily, but something else might come along the line that you need more money so you need to make sure you have enough liquidity in your plan to adjust to the reality on the ground.
That’s the end of our listener questions for the week. Angela, thanks so much for joining us. If you want your questions answered during the show, go to our website retireEWO.com and click on the button “Ask a Question”. You can also follow us on Facebook or subscribe to our podcast on iTunes. I want to thank all of you so much for listening. Stay tuned next week as I continue to discuss how to retire with your eyes with open. Don’t go into retirement with your eyes closed, retire with your eyes wide open. I’m Scot Landborg and we’ll see you next week.