Keen On Retirement™

Feeling happy? That could be because spring has finally sprung here in the Midwest. Or, more specifically, it could be because you're part of the Keen Wealth audience right here in Overland Park! A recent report by WalletHub ranked the 182 "Happiest Cities in America." The researchers evaluated 29 “key indicators of happiness, including depression rates, income growth, and average daily leisure time.” Fremont, California topped the list, and half of the top ten were cities in sunny California and Arizona. But the Midwest had a strong showing, too. Bismarck and Fargo, North Dakota both made the top five. And coming in at number six was ... Overland Park, Kansas! While it's certainly gratifying to see well-deserved recognition for our city, I've always felt grateful to be living and working here. Yes, the reasonable cost of living, centrality for travel to other parts of the country, and variety of outdoor activities are all wonderful. But the sense of community here is really special. My team at Keen Wealth experienced that firsthand recently when the Keen Wealth Foundation and Charitable Impact Committee, led by my wife Carissa, had the honor of serving as the entertainment sponsor for "Kids Night Out," a massive gala that raised $3.5 million for the Boys and Girls Clubs of Greater Kansas City. Taking care of each other, in our communities and in our homes, is one of the most direct ways that a financial plan can boost your spirits. On today's show, we answer questions from two listeners who are thinking about how different generations of Americans can help each other enjoy more security and happiness in retirement.

In a way, my four previous blog posts about coping with volatility in retirement were about prework: The choices you and your advisor make that don’t always show up on a spreadsheet. Why maintaining flexibility can be more important than optimizing your numbers. How to make high-consequence decisions when there is no one right answer. And some of the nuts and bolts mechanics that prepare a retirement plan to absorb life’s inevitable shocks. But once you do retire, your plan is only half of the equation. The other half is you. And that's because, with a comprehensive financial plan in place, the real risk to your long-term security in retirement usually isn’t market volatility. It's how you respond to that volatility in the moment.

It's "a tradition unlike any other." The $1.50 pimento cheese sandwich. Every year at the Masters, you'll hear TV commentators wax nostalgic about what makes the world's most famous golf tournament unique: the course, the history, the cell phone ban. And those sandwiches, which, at the very first Masters in 1934, cost just $0.30. If the pimento and cheese had kept pace with the rate of inflation since then, today it would cost $7.50. But the $1.50 price tag has stuck since 2003. Other than Costco hot dogs ($1.50) and Arizona Iced Tea ($0.99), there aren't many other examples of products whose prices have stayed flat over time. In the past couple of years, we've all had to cope with costs that have risen a little faster than we're used to, not just at the grocery store but at the pump and on our utility bills. As we discuss on today's show, protecting your nest egg against inflation and other variable costs is an important part of a comprehensive financial plan, especially once you retire.

In my recent blog posts, I've tried to broaden the retirement conversation beyond running the numbers and optimizing projections. I want seniors to keep their lives at the center of their financial planning and let their goals guide more of their decision-making. But even the most carefully considered decisions, and the best-laid plans, eventually run into real life. And that's the true test of a financial plan. You don't have to do a lot of math and projecting to figure that you'll be OK in retirement if the markets are roaring, your health is good, and your house is sturdy. But are you prepared for market volatility? An unexpected diagnosis? A major home repair? Will you be able to handle disruptions without being forced into bad decisions? To answer "Yes" at these critical moments, your financial plan doesn't need to be "perfect." It needs to be resilient.

When I think about the start of spring, I think about spending the Easter holiday with my family, the colors returning to our green spaces, a little more sunshine, and maybe a shower or two. Hail the size of baseballs? Not a part of my vision! But that’s what a massive storm brought to Kansas City a few weeks ago. Like so many folks, I'm still fixing broken windshields and dents on my family's cars and having my roof checked out. Of course, none of us can control the weather. But we can prepare for the unexpected by buying insurance, keeping some emergency cash in our savings, and making home upgrades that protect our most valuable assets. And, as we discuss on today's show while answering three timely listener questions, the same principle applies to financial planning. We can't control what's happening in the world or how the markets react to the news of the day. But we can be proactive about how we weather the storms of inflation and volatility.

The most critical decisions you'll make about retirement are never just about accounts, amounts, and calculations. And if you do try to create a "perfect" plan just by optimizing your numbers, you'll probably sacrifice the flexibility most seniors need to succeed in retirement. So ... If there are no “perfect” mathematical answers to major life and money decisions ... And over-optimization can backfire ... How does anyone actually make these important choices? Unfortunately, many folks don't. The multiple branching pathways we all face at major life transitions can look so daunting that the choices and implications might paralyze your thinking. Rather than game out those options and, potentially, make the "wrong" choice, too many seniors head into retirement with a back-of-the-napkin retirement plan and hope for the best. Of course, as we often discuss in our blog posts and podcasts, retirement planning is never as binary as "right" or "wrong." It's about analyzing competing trade-offs and choosing the ones that move you toward your retirement goals. And to make those choices, you need a framework.