Your Golden Years: When Planning Becomes Reality

Your Golden Years: When Retirement Planning Becomes Reality

Bringing, as I do, a contrarian point of view to wealth management helps me encourage my clients to have a clear-eyed approach to investing. It is that kind of unbiased, honest assessment that holds the key to remaining committed, long-term, to market-driven investment strategies—which, if you see them through, can help fuel purpose-driven retirement planning.

So what is a purpose-driven retirement, anyway?

The answer will be as different as each person you ask, but among the majority of clients

I serve, three objectives underlie their retirement planning:

  • Never running out of money during their lifetimes
  • Providing for survivors after they’ve passed
  • Preserving and expanding their contributions (both monetary and physical) to philanthropic pursuits aimed at making the world a better place.

Don’t assume that only the last of those serves the “purpose” part of “purpose-driven retirement.” In fact, all three do.

After all, you must first be secure yourself in order to extend a hand to others.

Providing for your survivors, meanwhile, sets an important example: That caring for others begins at home. If you couple that example with encouragement that your beneficiaries too help others, you’ll be pursuing one of the most important indirect forms of philanthropy, passing the ethic along.

With these first two objectives satisfied, philanthropic retirees can then turn their attention directly helping those in need. I believe that the cause(s) one chooses to assist is no less important a decision than the form their help takes. No single need is more pressing than any other; the question is, what touches your heart?

I’ve opted to put my philanthropic efforts into a school for orphaned children in India, a hospital in my neighborhood, and a homeless shelter in the inner city. Does throwing your weight behind efforts to help addicts speak loudest to you? Or is it the battle against workplace bullying? Perhaps you’ll join the Peace Corps, or collect clothing to spur micro-enterprise in poor communities abroad, or start a brand-new effort addressing an issue you believe is being largely ignored at society’s peril.

Where you choose to do good is a highly personal decision. That you choose to do good, and preserving your ability to do so, I believe, is the greatest gift of our golden years, both to those who receive what we give, and of all the gifts we give ourselves.

The Power of Dispassion: Trusting the Markets’ Cycles

The Power of Dispassion: Trusting the Markets’ Cycles

Nothing is more challenging for a wealth manager who works with her clients’ best interests at heart than talking them off the ledge when the market is tanking.

        When you’ve been doing this as long as I have, you get to a point where, frankly, you’re somewhat bemused to find that investors panic at all. Does that make me sound jaded? I hope not; “experienced” has a much nicer ring!

        Still, I get it. I really do.

        Here you are, having worked for and planned for and saved for the retirement of your dreams—and now that you’re closing in on it (or already in it) it’s like every zoo in America decided its bears could use a walking (or worse, running) tour of Wall Street! What response but panic is appropriate?

        Well, education.

        Because once you understand the market’s cycles, you realize that even the darkest day on Wall Street, in the bigger scheme of things, is fleeting. So are long-term bear markets. When you combine an understanding of the market’s cycles with years of experience in managing portfolios through them, you know panic isn’t just pointless, it’s unnecessary. You’ve already planned in a way that can accommodate tough markets and can even leverage them to a client’s advantage.

        Still, when any day is especially dark, I get phone calls. Take 2011, for example.

        I was at a remote location in India where you can’t really get the internet. But when we went into the city I hit up my smartphone and saw that the equity markets were in a tailspin: A key rating agency had downgraded U.S. Treasury bonds from AAA to AA, thanks to a Congressional harangue in Washington. The news media drew up worst-case scenarios, including people going without their social security checks.

        I pictured the phones lighting up back in Boston—where, fortunately, it was the middle of the night; the trading day had not yet begun. I sent my staff this e-mail:

        “When people call, tell them not to sell their equity positions, this is craziness. Downgrade of Treasuries should affect the Treasury market, not the stock market.”

        That’s because when a bond is downgraded, the issuer must usually pay more in interest to attract buyers. In short, this “crisis” was no crisis at all. If anything, it was an opportunity to buy in to equities—not sell out of them.

        Thanks to an understanding of market cycles born out by years of actually seeing how events in one market impact other markets, I was able to abide by an axiom that is often heard but too infrequently applied: Buy low.

        That axiom’s other half, of course, is “sell high”—and sending a sell order on a bad day for the market is doing quite the opposite.

        I discuss market cycles in great detail—and share what I was up to in a remote corner of India—in my book, You’re Retired… Now What? – coming soon!. I hope you’ll read it.