Butkus, Rivers and Retirement

I understand why poets use rivers as metaphors for the passage of time. Rivers move me to think about life. Perhaps that’s why I found myself evaluating a personal milestone this week as I hiked along the Bitterroot river with my dog, Butkus.

The milestone was the three-year anniversary of the day I left my forty-year bank career.

As I hiked, I came up with some criteria to evaluate my post CEO life. My three interrelated keys to managing retirement: finances, wellness and intentionality about managing time.   

Finances. I watched some of the Berkshire Hathaway annual meeting last Saturday. As usual, Warren Buffett was a master teacher. One of the lessons he taught gave perspective to investors. He showed the top 20 companies in the world in 1989. His point? Not one of those companies are in the top 20 today.

He also showed the top 20 companies today. It’s an impressive list. We might think of them as great companies to own for the next 30 years. But, if history is a lesson here, most, or perhaps all, will lose their dominance.

I personalized his point for my finances. I probably have an actuarial life expectancy of 20 years or so. My wife is a few years younger, so I think we should use a 30-year investment planning time horizon to be conservative. Given the demise of the 20 largest companies over the last 30 years, what is a good plan for managing our exposure to stocks over the next 30 years?

The compelling logic of owning low-cost index funds that invest in all publicly traded stocks was made clear by his examples. As some giant companies fall, others will emerge. As index investors, we will profit by participating in the creative destruction. We will own the next Amazon or Apple.

Buffett has stated his estate plan calls for trustees to invest 90% of his assets in a low-cost S&P 500 index fund when he is gone. My plan has a little more diversity including a total world stock index funds. As innovation and prosperity has spread to other countries, it makes sense to me to find a way to diversify outside the US markets.

One caveat. I don’t want my retirement dependent on stock market performance for day-to-day bill paying. That would be too stressful. I like plans using Social Security and pensions, along with other fixed income like annuities, to pay ongoing bills.

Wellness. I suppose the human race has looked for a fountain of youth since the beginning of aging. But it reached a new frenzy with Baby Boomers like me trying to hold off the effects of getting older.  I’ve certainly been through enough diets, supplements and exercise routines to write a book.

But I think the ultimate symbol of chasing eternal youth is the $1 million prize that will go to the winner of the Palo Alto Longevity Prize. It is called “a science competition dedicated to ending aging.” To my knowledge, no one has collected yet.

My interest in the subject is two-fold. If there is a way to hold off the frailty that comes with aging, I’d like to participate. But, studying how frauds are most effective with those looking for miracles, I know selling anti-aging wares can also be a fertile field for scammers.

My suggestion, treat this subject the same way we do investing. As an investor, I keep an eye on current events, but I seldom act on anything except the advice coming from the people I trust.

In the same way, there are exciting developments in anti-aging that are worth keeping an eye on. I’m intrigued with the emerging science of senolytics that tries to remove harmful cells that afflict the elderly. It shows some promise, but it’s probably years away from anything for you and me to benefit from.

On the other hand, there is a lot of trusted actionable advice we can immediately implement. A pain doctor told me his healthiest patients are hikers. I can do that along with regular visits to the gym. Nutritionists consistently advise eating lots of natural foods for vitamins and minerals. That’s good advice.

But when we’re tempted to buy into a new health craze or an incredible investment opportunity, it’s good to remember the story of Stephen Greenspan. He wrote a book on Gullibility to tell us how to avoid it.

Unfortunately, shortly after it was published in 2008, it was revealed that he was an investor in Bernie Madoff’s Ponzi scheme. If a gullibility expert can be duped, it’s a good sign for us to be on guard.  

A retirement plan for your time. I love no longer going to the office five or six days a week. But I have a need to look forward to something to do each morning besides coffee. Failed retirees I have talked to are usually bored because they don’t have anything to do. That can usually be fixed.

Successful retirees spend some time developing their retirement plans every year. Old interests that you could never pursue in the past are a good place to start searching for ideas. For example, I have some good friends that have found a passion in searching out their family genealogies. I know some who have traveled to Europe to trace lineage. It’s been very rewarding.

My quirky idea is a desire to pursue Western Philosophy. I currently find myself up to my neck trying to understand Thomas Aquinas’ view of Natural Law. I’m sure that sounds weird for most people, but that’s the point of retirement. We can pursue interests unique to who we are.

And, of course, finding your passion in serving others is a time-tested way to connect with others who share your interests. Some of my best friends are in nonprofits I share an interest in.

So, as you plan your post retirement life, I’d suggest spending some time by a river as you evaluate your financial, wellness and retirement plans. Retirement can be the best time of our lives, but only if we manage it right.

Joe Kesler

Smart Money with Purpose