One of our many serendipitous social encounters; an impromptu concert at our RV site this week!
Hard to believe it has been 2 years since I last updated my recipe for a happy retirement. And 2 years before that I had the original post. Every 2 years seems like a nice interval to revisit my thoughts in this area. We are now getting close to completing 5 years on the road living in our RV and 9 years since we left the daily 9-5 grind and started on this great new life adventure. It’s been an amazing adventure that continues to improve. I can’t recommend it enough.
I’ll also add that in the past 2 years we have met many couples and individuals that are making the same lifestyle choices Nina and I have made without being ‘retired’. That word has less and less meaning these days for many including us. These people work on the road and have found ways to have mobile or seasonal sources of income and to keep their costs of living low. I truly admire these folk and having listened to many of their stories I often think we should have done this sooner. OK, but this post is about my thoughts on retirement so let’s get to it.
Below I reproduced the original recipe for a happy retirement post, along with my comments from 2012 and have then added my most recent observations for 2014.
I’ve come up with four areas that I think every retiree needs to think about and have a plan for;
1. Financial – this one is the most obvious. You can’t retire unless you have the financial means to do so. It may just be social security, or a pension. It could be 100% savings. What I think is important is to have a plan that you can mark your progress against. And more importantly a plan that is flexible, that takes account some big what-ifs. This is one major reason I think retirees get ‘scared’ back into the workforce and in the worst case have no choice but going back to work. This is one of the major reasons I started this blog – to help people with this part of their retirement.
I now recommend that that ‘plan’ I mentioned should be the IVY timing portfolio or timing the Permanent Portfolio for the majority of retirees (see my latest post on the subject here). The standard retirement models, e.g. 60/40 stocks bonds, are not the best solution in particular during retirement when you’re in withdrawal mode, not wealth building mode, and capital preservation is key. For those so inclined I think its possible to do even better with a dividend/income approach I outline here, although right now I outright trade equities versus options.
 This has been the biggest change since 2012. I have personally gone almost exclusively to quantitative investing methods (I still do some active bond management). That includes the different versions of the IVY portfolios. My latest update on all the portfolios I track is here. I personally now use the GTAA aggressive portfolios. I also use several of the quantitative stock portfolios I’ve discussed in the last year on the blog. I do no manual stock picking or trading anymore. What I have found is that even if you are one of the less than 5% of individuals who has the behavioral capacity to be a very active investor it is simply not worth the investment in time and emotional ups and downs. The bang for the buck is simply not there. I’d rather be doing something else. The majority of investors can’t even stick with simple buy and hold strategies.
As far as progress to a successful retirement, things have gone pretty well over the last 9 years since I first started withdrawing from my retirement portfolio. I will do a detailed analysis at the end of next year for the 10 year mark but so far my CWR is below my SWR when I started and the total portfolio value is higher as well. The RV life has been a big contributor to this outcome as it allows us to be very flexible in retirement spending and keep our costs down as well.
2. Social – work provides a lot of the social interactions we have in our lives. Many people’s friends are made through the workplace. When you retire you lose this unless you retire at the same time as your friends and in the same area. If you retire early most of your friends are still working. Without these social connections you can easily get bored, lonely, etc… Faced with a loss of these social connections you need to actively work at this in retirement. Do you join a social club? a golf club? volunteer for certain organizations? How are you going to fulfill this part of your life? This was a huge loss for my grandfather who was the social center of his small immigrant community. He has not been the same since. In our full-time RV lifestyle this has been our biggest challenge. We’re still working on it.
 Well, all I can say is challenge conquered! Full-time RV’ing has turned out to be maybe the most social thing we have ever done. Our social life is a lot more full than it ever was while we were both working. And because of this new found socialness we are enjoying our lives even more. Many of our new connections have come from Nina’s RV blog, our volunteer experiences, serendipitous meetings at campgrounds, and even social media. So, I would even put more emphasis on the importance of having social connections in retirement. Not too long ago Nina posted about this unexpected surprise for us.
 And the party continues! We’re even more social now than 2 years ago. We have formed some amazing friendships on the road and continue to do so. These relationships and interactions vary from brief visits and happy hours over campfires to week long rendezvous or caravans to spend quality time together. Now we even have to be careful not to have too much socializing. I still need to give my introverted side some alone time every once in a while.
3. Mental – work usually provides much of the mental/intellectual stimulation we get in our daily lives. What do you do when this goes away? Do you have a hobby to keep your mind active? Just relaxing, watching TV or surfing the internet is probably not going to be enough. Even if your work was very physical, and not mental, what do you do as you age and your ability to engage in physical activities goes away? Often this can be combined with #2. There are many ways to fulfill this need like volunteering and in today’s tech world many remote possibilities enabled by the internet. For me, my interest in investing fulfills this role. And I try to parlay this intellectual interest into helping me with my social and financial areas. On-line forums, blogs, social networks all help in this regard. I have seen many retirees struggle in this area. They find it hard to engage in new areas. It takes courage to leap into new things and a lot of experimentation.
 Only a couple of things I would add here. As an astute blog reader pointed out in my first post, sometimes you need to de-program before you can start enjoying retirement. Societal programming is a very powerful force and sometimes you need time to adapt to a slower more leisurely pace of life. Then you can start taking up new hobbies, or old ones, to keep that old nogging rocking. Investing still fulfills this role for me, even more so than 2 years ago. One thing that helped me was to go completely cold turkey from TV news, talking heads, etc…and that goes for most financial news media especially CNBC. Unlug, you’ll be happier. Surprisingly, technology has helped me stay informed, yet unplugged. My iPad, blogs, and twitter have been a huge boon in this regard.
 Well, 9 years after leaving the 9-5 grind and 5 years on the road I can confidently say that I am fully de-programmed. I guess the only change for me here has been that the move to more quantitative investing has given me more time to do other things like cook more, do more long term investment research and macro-economics study (yes, I like these things), read more literature, etc…All good.
4. Physical/Health – I think being physically active helps in all areas of life but it certainly does impact your health. Also, in this age of expensive health care and insurance it is a key aspect of retirement especially as one ages. The healthier you are the less financial impact it will have on your retirement. The healthier you are the more you can do in retirement. So, I think its critical to have at least one physical activity/hobby that you love and engage in all the time. For my wife and I, its is hiking. We hike/walk 3-6 miles a day with our dog, without fail. We also are active in yoga, we run a bit, and do some strength training. Nutrition is a also big part of this for us.
 No changed here except maybe I think its even more important than I first thought. I would also add to beware of conventional wisdom in particular standard medical, pharmaceutical treatments and nutritional advice. My wife and I are happy and healthier than ever following primal/paleo lifestyle for the last 4 years.
 It’s just as important now as it was 2 years ago and it’s a big part of our life.
Retirement is not unlike any major transition in life. It takes time, patience, flexibility, and a little bit of effort. Pour all ingredients into a bowl, add an optimistic bright frame of mind and you have yourself a recipe for a happy and fulfilling retirement.