Making A Choice

VI. Finance

financeI don’t want to own a home. That put’s you at the mercy of the local and state governments. Many have serious, long-term problems with overly generous pension promises—not to mention the problems that are just a twinkle in some policy geek’s eye.

I want to have a mortgage in retirement. My wife hates mortgages. Guess who wins? You can find professionals like Corrie Copple who will argue both sides. Read the arguments and decide for yourself.
Is a pension equivalent to a fixed income portfolio? No. If you die, the pension dies. See #2 above. I can envision a fairly limited set of circumstances where they would be roughly equivalent. You can find professionals who will argue both sides. Read the arguments and decide for yourself.

VII. Longevity

Expect to live longer than the predictions. I did a deep dive on the statistics of life expectancies last year. For years the rule of thumb had been, “One extra month of life expectancy for each elapsed year.” Recently, life expectancies have been going up at an increasing rate. There are many factors that affect expected longevity, e.g., sex, race, and education.

Many old economic assumptions are out the window in the global ZIRP era—Zero Interest Rate Policy. Pensions and annuities can’t survive for long at these interest rates.
100 – your age for your stock exposure should have been buried at least a decade ago.

VIII. Travel

We used to travel quite a bit. I’d like to continue to travel, but my wife has become a bit of a curmudgeon. I’ve noticed this tendency in myself also, but I resist it. We’d want to live within about 100 miles of a major airport if only to see relatives a few times a year.

X. Personal

Get divorced. Almost all couples will be better off unmarried under Social Security. The first time that I read about this was decades ago. It’s still true. I’ll probably lose this argument too.

There’s a crapload of stuff out there. Go to the library. Read a few samples. Follow the advisory who make sense to you.