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Two weeks before Christmas

Patricia was 85 years old and approaching her 25th year of retirement.

By every estimation, her senior years had been a terrific success – even a dream come true. In the early 1990s, she and her husband James, a successful executive for a major U.S. corporation, moved to the Eastern Seaboard to begin a long-awaited and well-deserved retirement.

Their retirement home, which had served dual-purpose in the past as an investment property and family vacation destination, was located less than a mile from the Atlantic shore amid a lush, private, and gated resort island. With an open layout and a breathtaking view of local flora and fauna – deer, wild-turkeys, foxes, bobcats, herons, egrets, ospreys, and the occasional bald eagle – the house had become a favorite gathering place for children, grandchildren, and close friends for decades.

As a retiree, Patricia had thrived.

She had grown to become a respected and influential member of her local community. She was a dedicated volunteer for her church and various non-profit causes. Much of her effort went to helping poor families, the elderly, and others in need. Wholeheartedly, she invested “time, talent, and treasure” into these cherished pursuits: raising funds, providing service, offering leadership, and devoting countless hours of personal time.

As a byproduct of this activity, she accumulated many friends and formed many close and lasting relationships. Her life was an abundance of faith, family, community, and service. Truly, she had achieved a retirement filled with joy, meaning, and deep personal fulfillment.

But, on this mid-December day, all of that was about to change.

Patricia’s husband, James, was a few years older than her. In addition to having been a successful executive, he was also a devoted husband, father, and grandfather. Like Patricia, he too had flourished in an almost storybook retirement. Taking a keen interest in golf as an early retiree, he spent many memorable hours with friends and family on the local island’s pine, oak, and palm-lined links. When not enjoying a round of golf followed by lunch at the island club, he was also a steadfast volunteer and faithful contributor to the local community. For decades, he selflessly offered up considerable executive-level management experience to a broad array of civic, religious, and non-profit endeavors.

In the first years of their retirement, James and Patricia felt confident and secure. With excellent health, a soon-to-be-paid-off family home, and well over $1,000,000 in their nest egg, the future looked bright, even sublime.

To keep watch over financial affairs, the couple hired a local investment firm from their original hometown on the recommendation of friends. The firm charged a “fee” to manage a portfolio of stocks and bonds, and to assist with the disbursement of future income. In time, their original adviser retired and passed their account on to a son who had also become a broker. Later, the firm was sold to a much larger financial institution.

Throughout a significant portion of their retirement, James and Patricia managed to have their nest egg produce well. This was true even through the bursting of the dot-com bubble of 2000–2003, and later – or at least so it seemed – through the market crash of 2008–2009.

Post-2009, however, things weren’t quite the same.

The ability to sustain their overall funds, while maintaining the income necessary to support their lifestyle, began to waver.

Growth seemed insufficient to outpace annual withdrawals for income. This anemic state continued throughout the subsequent decade of generally “upward” moving markets. Slowly, though at first almost imperceptibly, their financial foundation began to erode.

The couple did what they could to hold on. They cut back on expenses – dropping club memberships, scaling back charitable giving, holding onto aging vehicles – all the while maintaining the expectation that, someday, things might turn around. But the hoped-for recovery failed to materialize. Regardless of their collective efforts to remain frugal, their nest egg levels were becoming alarmingly low. Since James wrote the checks and handled most of the couple’s financial affairs, he was the first to see the truth head on.

Finally, in late in 2017, their retirement IRA balance fell to a critical level. And so it was, two weeks before Christmas, James was forced to break the news to Patricia.

“We have to sell the house.”

It is probably best to end this story here.

Unfortunately, for millions of people, stories like this one – or versions thereof – seem likely to become more and more common in the future.

As retirement income planning has shifted from “pension-based” models that promised guaranteed income for life to “portfolio-based” income models which offer no such guarantees, the combination of longer retirements and market volatility are putting more and more retirees at risk when it comes to sustaining financial security.

Even more unsettling is that the brunt of the impact of running out of money in retirement generally does its worst damage at later ages. At such times, it is often too late to dust off a resume and rescue oneself by going back to work.

A critical factor is that no one knows for sure how long he or she will live.

This makes it extremely difficult – if not impossible – to precisely budget funds so that your last dollar earmarked for income is spent on your last day.

Due to healthier lifestyles and improvements in medical care, people who reach older ages are now living longer than ever. Because of this, the funds people have managed to save for their retirement must be stretched over longer and longer periods of time. Further, these funds must be positioned to weather the storms destined to occur on the road ahead.

“Ruin” is the term economists use to define running out of money in retirement.

Because women on average tend to live longer than men, they face the highest risk of ruin in their senior years. Concerns about fallout due to life expectancy for women are further compounded by the fact that men often marry women several years younger than themselves.

It’s no secret that dying can be extremely expensive. Medical bills, home care, custodial care, nursing care, and other end-of-life expenses add up. As a result, the first spouse to die in many couples – more frequently, men – will inadvertently take the lion’s share of the couple’s nest egg with them when they go. When this occurs, what happens to the future security of the surviving spouse?

Beyond the physical and psychological impact of experiencing such a difficult loss, many are predicting – accurately, I think – a poverty crisis among women in the coming years.

But it doesn’t have to be this way.

I am glad to tell you that, at least in the case of James and Patricia, there was a happy ending to the story. While they did end up selling their retirement home, fortunately, they were able to do so for a satisfactory price and in a timely manner. The proceeds from the sale afforded them the resources to:

• Secure a source of guaranteed income to safeguard their financial security for life.
• Establish an emergency fund.
• Set aside a portion of funds to remain invested – thereby protecting them from inflation and helping rebuild their financial legacy.

Given the circumstances, James and Patricia were lucky. But not everyone has a resort-island beach home to sell.

What happened to James and Patricia begs two major questions:

    1. What caused their long-term financial security to eventually erode and reach a boiling point at such a delicate and vulnerable time in their lives?
    2. What safeguards could have been put in place in their planning to prevent this from happening?

It turns out, the two biggest fears for people over age 50 are whether they have saved enough for retirement and whether they will run out of money after they retire.

I am writing this blog to tell you that these fears can be overcome.

I am writing to tell you that what happened to James and Patricia can be avoided. I am writing to tell you that the danger of running out of income at a delicate and vulnerable senior age does not have to happen to you or to someone you love – and especially your surviving spouse. There are solutions to these concerns, many of which are uncomplicated, safe, reliable, and based on time-tested principles.

I am also writing to tell you that whatever your current circumstances with regard to retirement, whether you have managed to save well or whether you have found accumulating savings to be a challenge, almost any situation has the possibility of being improved.

Imagine receiving a monthly “paycheck” for life to cover your expenses while simultaneously maintaining your ability to grow wealth throughout your retirement.

Though it may seem difficult to believe, for millions of people, such a reality is within reach.

Of course, achieving success and fulfillment in retirement is about more than just money. It also requires an effort to manage other dynamic elements such as one’s mindset, expectations, and priorities.

As I write this, I am in my mid 50s and have spent the last three decades of my career in the insurance industry – particularly managing healthcare risk for businesses. While I am an active investor in securities, real estate, and various private companies, I am not a stockbroker, wealth manager, or investment “guru.” I can provide no shortcuts to “beating the market,” “hot tips,” or other get-rich-quick investment promises.

Nor would I support offering such advice.

After years of study, personal observation, and reading thousands of pages on the topic of retirement, what follows is a curation of the most important ideas I have discovered. These ideas, expressed as “18 Rules for Retirement Success,” offer solutions to the most pressing concerns for those in and nearing retirement age – especially, how to achieve lasting financial security and peace of mind.

See the sidebar at the top of this page for links to each of the 18 Rules.

If you prefer reading the rules in book form it is now available on Amazon.com.

Click to preview the book on Amazon.com

As you read the rules, be a student and not a follower.

Make sure any direction you choose is built on a foundation of your own conclusions. Only then will you take ownership of your path and obtain the necessary fortitude to see the journey through.

I offer these observations with the sincerest wish that you and those you love – including your spouse, parents, siblings, children, and friends – achieve the most successful, secure, and fulfilling retirement.

Best,

Ted Stevenot
Cincinnati, OH

Questions or comments? 

I can be reached at this link – contact Ted Stevenot.

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Rule 1: Accept You Will Always Have Bills to Pay

Below is an excerpt from the book Downsize Sooner than Later – 18 Rules for Retirement Success available on Amazon.com.

Imagine your monthly bills.

Think of your gas and electric bill, cell phone, Internet, and grocery receipts. Add to that the cost of “your responsibility” for a recent medical office copay, a recent test, x-ray, or lab work. Lastly, throw in your water bill, trash bill, and monthly auto insurance – all due in the coming days. Now, imagine your checkbook. Every bill you pay, online or written out by hand, comes from your checking or other equivalent account. Take a moment, as you surely have countless times in the past, to look at the numbers.

If you’re like most people, when you review your expenses and account balances, it is as much a “feeling” as a rational assessment: “Wow, the grocery bill was higher than usual. Those out-of-town guests we hosted last weekend caused us to buy a bit more food items than we otherwise would – three extra trips to the store. Oh, and there’s that receipt from eating out on Thursday, a gasoline receipt I forgot about, and the re-charge of the Starbucks card. Wait, here’s a receipt from Amazon – no, actually two receipts, one for the leaf-blower we had to replace and the other for that graduation present we bought for our niece.”

As you account for and pay these bills, you keep your eye on your balance.

If no new money comes in to replace what you spend, the balance goes down. Sometimes, watching this happen is gut-wrenching. It causes stress, anxiety, and a sense of loss. Depending on the nature of the bills due, it can even stir up a bit of resentment.

During your working years, the remedy for such feelings is simple, if not always easy. You rely on recurring income from your paycheck to replace and refresh the funds you ultimately spend. Your paycheck is your wellspring. It is your fuel. It is your source of energy and continuing sustenance.

Ever-present at any stage of adult life is the tug-of-war between what comes “in” as income versus what goes “out” as spending.

We may try budgeting in various ways to keep our heads above water. This may take the shape of meticulous planning or the exercise of moderation. Sometimes, guilt helps us stay on track. Other times, perhaps, waves of panic.

Imagine now that you have reached retirement age. All the spending examples given above can just as easily occur in your eighties as they do in your thirties, forties or fifties. Each of these expenses is common and recurring. You may pay off a home, cars, or other expensive personal items, but there will always be certain basic expenses required to maintain your lifestyle – to take care of the things you own, keep yourself warm (or cool, depending on where you live), keep the lights on, pay for food, pay doctor bills, pay for certain types of insurance, etc.

Basic expenses never go away, regardless of your age.

Let’s repeat that…basic expenses never go away, regardless of your age.

The major difference is, as a retiree, you may have little – or substantially less – of a steady paycheck available to refresh and restore your account balances. This begs a critical question: How will you and your spouse – or your surviving spouse – derive a sustainable income stream to pay ongoing bills when you retire?

Simply dividing what you have saved by your life expectancy won’t cut it. This is because no one knows for sure how long he or she will live. What if you live substantially longer? Many imagine that by keeping the money they are not currently spending invested in anticipation of “historical average” market returns, they will be able to grow their way to sustainability. But what if markets take a dive and you end up with less money available for income than you thought?

At younger ages, your paycheck replenished your accounts and replaced the money you were inevitably forced to spend.

Is there a way to make the same thing happen when you retire? Can you secure an “income for life” that is not dependent on what happens in the markets and that promises to keep paying, regardless of how long you live?

We discuss the answers to these questions in the upcoming rules.

For now, the major point to etch into stone is to acknowledge and never forget that throughout retirement, you will always have bills to pay. This is real money that must be spent and that, once spent, will be gone forever. It cannot be re-saved, reinvested, or left to heirs.

The sustained ability to pay ongoing bills regardless of how long you live is the essence of financial security in retirement.

This fact is true for you, your spouse, your parents, and for any other person seeking financial safety and peace of mind in his or her senior years.

Questions or comments? 

I can be reached at this link – contact Ted Stevenot.

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Rule 2: Don’t Spend More Than You Make

Below is an excerpt from the book Downsize Sooner than Later – 18 Rules for Retirement Success available on Amazon.com.

In the first rule, we called out the fact that certain bills will always be with us, regardless of how long we live. It is crucial to take some time and try to think about what your ongoing bills will look like when you retire. Eventually, you must compare your expected expenses in retirement to your expected sources of retirement income.

In the final analysis, your income must consistently exceed your expenses.

Otherwise – and especially in the modern era of multi-decade retirements – spending more than you make is like setting sail in a boat full of holes.

No, wait…it’s worse than that.

This is because it’s not really you in the boat. The “you” you think of today is most likely your current, strong, invincible, ready-to-face-future-challenges self. In the boat, however, is your future self. Your old-age self. And it’s also likely your old-age spouse is in the boat with you. This is a very fragile time and arguably the worst possible moment for your boat to fill with water and capsize.

Understanding the virtue of spending less than you make is easy but implementing a lifestyle that enables it is difficult.

In most financial books, this is the moment when you are given advice to gather your willpower and establish a budget. While strict budgeting is effective for some, for most others, such advice utterly fails. It is human nature that people psychologically resist being limited by a budget. Too much sacrifice. Too much discipline. Too much willpower. Too difficult to stick with over the long haul.

Complicating this fact is the chaotic nature of future expenses. As anyone responsible for managing a household’s finances knows, life throws unexpected bills your way. Anticipating these expenses in advance is extremely difficult and such expenses can kick even the most well-conceived budget into a tailspin.

I would like to suggest an alternative to strict budgeting.

I will be repeating this mechanism as a solution to various challenges presented throughout these rules. Instead of focusing on establishing a hard-and-fast budget, focus on establishing hard-and-fast routines. Some examples:

  • Grandma Jamie used to overspend on Christmas gifts for her grandchildren, but she doesn’t do that now. How? She instituted a practice of sending each grandchild a $50 bill at Christmas. Unless she gets more grandchildren, her expenses don’t go up. Her consistent routine prevents her from overspending, and she knows ahead of time exactly how much money she will need to cover her costs. The grandchildren like it too and look forward to spending their “Grandma money.”

  • Alicia and Tom enjoy eating out together but found they were spending far too much doing so each month. So, rather than go out on Friday evenings to someplace costly, they found a favorite restaurant they like for breakfast on Friday mornings. They split a big-breakfast menu item between the two of them. They enjoy the food, the atmosphere, and the time they spend together. When the bill comes, it is a fraction of what they would otherwise have spent. Their “date morning out” is something they look forward to each week, and it is aligned with their long-term goal not to overspend.

  • Jane and Allen were discussing how, while they enjoyed traveling to out-of-town locations for weekend trips, it was proving rather costly. They observed that they spent little time focusing on fun things they could do together close to home. They began searching for attractions of interest locally. Something that stood out was the community bike trail. For exercise in the evenings, they started taking short walks along the trail. Formerly a railroad line, the trail cuts through some of the most beautiful scenic woods in their area. Eventually, they bought bikes and became regular riders on the trail – biking as often as five times a week! These outings help them stay in shape, afford them quality time together, and provide hours of enjoyment at virtually zero cost.

I could go on for days with examples like these. They embody a big secret that many people fail to understand. Spending less is more about living intentionally and building properly aligned routines than it is about willpower and sacrifice. While willpower does play a small role in the beginning, it is the spark and not the engine. The same goes for other areas we will be discussing such as health, diet, exercise, finding more quality time to spend with loved ones, successful investing, and more.

Expressed as formulas:

• Best intended budget + same old routine = failure.
• New and better routine + time = success!

What are your priorities and how are they reflected in your daily lifestyle?

Do you want to achieve optimal body weight, but your hobby is watching cooking shows and baking sugary cakes and cookies? Do you want to drink less, but spend your weekend nights with friends who always seem to end up at the bourbon and cigar bar? Do you want to improve your professional skills through reading, but spend evenings binge-watching crime shows?

If so, the actions you are taking regularly – your routines – are out of alignment with your long-term goals. Without a change in lifestyle, it will be extremely difficult to get what you want.

If you would like to spend less, you must construct a daily way of living that is in alignment with that goal. The prime movers are not “limits,” “deprivation,” “willpower,” “sacrifice,” or even “discipline.” Instead, success is derived from words such as “deliberate,” “intentional,” “designed,” “aligned,” and “consistent.”

As an exercise, take a moment to list the things on which you spend money.

Highlight the items that make you cringe because either you resent the expense, or you feel they are costing you more than you want to spend. Especially, list ongoing monthly expenses that exceed $300 per month.

Note that every $300 per month in expenses during a 25–30 year retirement will cost you roughly $100,000. Does a regular expense come in at $600 per month? That’s $200,000.

Decide if these expenses are worth the cost. From there, brainstorm lifestyle changes that are consistent with your values and goals that would help you eliminate or substantially reduce such ongoing expenditures.

Questions or comments? 

I can be reached at this link – contact Ted Stevenot.

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Rule 3: Downsize Sooner Than Later

Ted and Jan Stevenot walking on the beach at Seabrook Island in 2018

Below is the third rule and title chapter of the book, Downsize Sooner Than Later – 18 Rules for Retirement Success, available on Amazon.com.

Let’s kick off this rule with a brief story.

Anna is in her early eighties and lost her husband to cancer a few years ago. When she and her husband retired in their mid-60s, the couple decided to continue living in their long-time family home. The house is a five-bedroom two-story in an upper-middle-class neighborhood, bordering one of America’s largest cities.

Anna and her husband paid off their mortgage soon after they retired.

The house, beyond serving as a place to host occasional holiday gatherings, is significantly larger than the two of them needed for retirement. With over 3,000 square feet above ground and a large finished lower level, it requires two central air conditioning systems to keep cool in summer and two gas furnaces to stay warm in winter.

During their retired years, the couple perceived the house to be “outdated.” They embarked on several major and costly renovation projects including replacing windows, residing, re-roofing, and adding a four-season sun-room.

Beyond the renovations, given the home’s upscale location, the house demands constant external maintenance – lawn mowing, fertilizing, weeding, edging, trimming, mulching, planting of annuals, pruning, leaf removal, snow removal, etc.

Amidst her husband’s illness and since his passing, Anna has had to shoulder the responsibility for all the ongoing maintenance and upkeep.

This has added significant physical, emotional, and financial stress to her life as she has felt pressure to hold things together. As a result of being physically unable to do much of the work, Anna is forced to rely on a merry-go-round of outside contractors – many strangers, some ethical, others less so – to help keep things in shape. It seems something is always breaking down. Since her husband’s passing, Anna has had to replace a dishwasher, refrigerator, garage door-opener, fix a roof leak in the garage, and now one of the two air conditioners is acting up.

Trapped between the uncertainty of the future and the desire to remain connected with the past, Anna is stuck and miserable.

The house is far too much to manage, but it is difficult for her to walk away from her family home all by herself. This would mean letting go of many of her valued keepsakes and venturing into the unknown. She is yet to clear out her husband’s things since his passing – ties, suits, shoes, undershirts, socks, etc. But she has not found the will to do so. The added stress of keeping up a large high-maintenance home hasn’t helped.

Had the couple opted for a simpler lifestyle earlier on, Anna would not be facing so many difficult decisions by herself and as a grieving and stressed widow.

I am certain had her husband foreseen the circumstances she was going to be in after he died, he would have opted for an alternative course. They could have arranged as a couple for the inevitable day in which one of them was left to face the future alone. They could have made the tough decisions together about what to keep, what to discard, where to live, and how to simplify.

As Anna’s story demonstrates, the sooner the decision is made to downsize, the sooner one can have fewer worries, less complication, and become accustomed to a lifestyle that is more sustainable in the future. Downsizing also brings the bonus of lower recurring expenses for things like property taxes, utilities, upkeep, furnishings, and more.

For most retirees, lowering expenses sooner rather than later opens the door to additional long-term savings and makes affording a more enjoyable retirement lifestyle easier. In some parts of the country, it may make sense not only to downsize, but to move to a less costly location – even to another state – with a lower cost of living.

Downsizing early means being intentional about where you are headed.

It protects you from allowing inertia from the status quo to cause unnecessary future stress and expense. It avoids leaving a grieving spouse to grapple with heart-wrenching decisions about what to do with a couple’s lifetime of possessions all alone. Given the choice, make these hard decisions together and earlier when you can think clearly and are not under major stress.

Here is a list of potential “downsize-able” expenses that can weigh heavily in retirement.

    • A large home.
    • Multiple homes.
    • High maintenance/expense automobiles.
    • High maintenance/expense possessions (boats, RVs, timeshares, vacation homes, rental properties).
    • Club memberships.
    • Extensive collections and hobby-related items.

Whether you decide to keep an item, let it go now, or make plans to let it go later, is a matter of personal preference.

If you do keep an item, make sure it is a conscious decision rather than driven by inertia. Add to your considerations how you or your surviving spouse will manage high maintenance items should one of you be left facing the future alone.

Questions or comments? 

I can be reached at this link – contact Ted Stevenot.

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Rule 4: Know what to rent and what to own.

Below is an excerpt from the book Downsize Sooner than Later – 18 Rules for Retirement Success available on Amazon.com.

An important subcategory of controlling long-term expenses in retirement relates to the question of whether to rent certain possessions or to own them outright.

It could be you identify certain items you enjoy very much, but that are expensive and high maintenance. These items may not be conducive to long-term ownership during your retirement years.

One potential answer that enables you to still enjoy certain possessions is to “rent versus own.”

Things to Rent Versus Own

Some examples of things that can fit this category are motorboats, sailboats, campers, RVs, racing cars, sports cars, off-road vehicles, golf carts, ATVs, jet-skis, wet-bikes, vacation property (non-income producing), time-shares, sports gear (snow skis, water skis, diving equipment), expensive part-time hobby items and equipment, horses/tack, etc.

Consider the following examples, illustrating the upside of renting versus owning:

    • Alex and his son love to four-wheel drive. Rather than purchase a trailer (and insure, maintain, and license the trailer), store, maintain, and insure ATV equipment of their own, they have found a nearby recreational vehicle park from which they can rent ATVs when they feel the urge to go off-road. This costs them a fraction of the price of ownership and is far less hassle. When they finish a weekend trip, they simply hand the keys back to the park office and say, “Thanks!”

    • Glenda and Bill love to travel the country to visit America’s many national parks and monuments. Rather than own a large RV with its costs for purchase, licensing, depreciation, maintenance, storage, and insurance, the couple deploys a mixed strategy of renting SUVs and using an app which helps them discover surplus hotel rooms at discounts near the attractions they wish to visit. This approach offers them a great deal of variety, lower stress, and they have stayed in many interesting places over the years all for substantially less cost and effort.

    • Edna and George developed a love of boating on America’s ocean inlets connected to the Inter-coastal Waterway. It started on their honeymoon, when they were invited to a day of sailing and became hooked on the gentle breezes and marsh views. They researched owning a boat of their own and were surprised by the accumulated costs of purchasing, trailering, insuring, licensing, maintaining, fueling and storing a modest saltwater-capable boat. Today, when the couple gets the urge to cruise the waterway, they use a rental service. It is just as enjoyable, ends up being a fraction of the cost of owning, and is essentially worry-free.

We see with these examples that success is not about willful deprivation or forgoing the things you love. Instead, it is about objective and design. Of course, there are some things that can be owned affordably, and the point isn’t to purge your life of all possessions. 

Rather, the point is,

Be intentional about what you own and what you are willing to pay.

If it is possible to find equal or greater value without the cost of ownership, renting can offer a win-win over the long haul.

Things to Own Versus Rent

Here we see that the reverse of the above idea can also be true. There are at least two items you should consider owning outright for the long haul. These are:

    1. A smaller, nicer home.
    2. At least one reliable vehicle.

The reason these items are candidates for ownership is that they have the potential to be necessities over the long-term.

If you own these items in an affordable and deliberate way, you can end up saving yourself expense over time, and you can limit your physical and emotional stress.

For many people, a “smaller nicer home” may mean a house, garden home or condominium with no more than two or three bedrooms. This would be a home that is updated – newer roof, windows, HVAC, and appliances – that demands reduced overall operational expense.

There is an upscale community near where I live in which the home values frequently run into the multi-millions. Close by, a developer put in condominiums that meet the criteria of “smaller and nicer.”

Most are two-bedroom units, some with offices and they are gorgeously appointed. There is an association fee, but for most residents, the fee is a fraction of what their prior costs were for maintenance and upkeep of much larger, more elaborate homes.

Imagine: no mortgage, no lawn to mow, no snow to shovel, no mulch to sling, no weeds to pull, no roofs to repair, etc.

When you want to take an out-of-town trip, set the alarm, lock the front door, and hit the road. Simple. Easy. Uncomplicated. Low cost and, for the most part, worry-free.

Of course, this is an ideal example and the people who use it have the means to do so, but the underlying concept can be applied across a broad spectrum of economic circumstances.

For many, an updated one or two-bedroom ranch house with a smaller yard and a single floor of living space may work out well.

The goal is comfortable, paid-for, low-cost, low-maintenance, and sustainable.

When it comes to vehicles, the same strategy applies. Depending on where you live, you may always need at least one reliable car for daily living. As I write this, the workhorse for my family – the vehicle that goes to doctor appointments, the grocery store, the office, for short out-of-town trips, and is our “daily driver” – is a reliable and highly-rated SUV.

While comfortable and nice, it is not a high-cost, high-maintenance, or high-status brand. Being more common, it is less costly to own, less costly to insure, and less costly to maintain.

In some instances, it may make sense to rent (i.e. lease) a vehicle or a home at a late stage of retirement.

This could be to achieve a living environment with virtually no maintenance and worry. However, if you intend to rent such critical items, the income required to pay the rent must be rock-solid.

You want to know for sure that you can keep a worry-free roof over your head for as long as you and your spouse will need it. Going broke paying high rent, only to end up without a home, is the opposite of security.

Depending on your finances, there is room to be creative, but keep the underlying goal of paid-for, low-cost, simple, and sustainable.

A few additional examples:

    • June lost her husband five years ago. The two of them had retired to a smaller home in Florida, in which they spent many enjoyable years before her husband’s passing. June has two sons living in the Midwest, in homes with extra space. June sold her Florida home and now alternates living in the extra bedrooms of her sons’ homes. She is super-easy to get along with and poses the boys no trouble. June recently paid cash for a small, newer, reliable SUV she uses to get around town. She has reinvested the proceeds from the sale of her prior home and these funds continue to compound. Every year, she takes the boys and their wives on a vacation trip, for which she pays. Her life is inexpensive, low-stress, and spent in the company of people she deeply loves. To top it off, every year, her wealth and future legacy continue to grow.

    • Alex and Mara sold their family home in their upper 80s and moved into a garden-home style rental community designed for people over the age of 50. They use a combination of guaranteed lifetime income sources – not dependent on the stock market – to more than meet their monthly rent and expenses. The absence of stairs has made it much easier for Alex to get around than in their prior home. Free from worry about maintenance and upkeep, the couple has more time and energy to focus on reading, volunteering, and enjoying time with their children, grandchildren, and great grandchildren.

    • Jane and Orville sold their family home in early retirement and purchased a comfortable two-bedroom condominium with cash from the proceeds. They have one reliable car that acts as a daily-driver, and they keep their living expenses low. The couple’s combined Social Security income and minimal pensions far exceed their monthly bills. Due to their smart lifestyle choices, the couple has continued to contribute to their long-term savings. This increases their security and adds to their future legacy. Feeling far from limited by their lifestyle, they both love reading biographies – which they check out from the local library – watching tennis via digital stream, and spending quality time with their children and grandchildren.

Questions or comments? 

I can be reached at this link – contact Ted Stevenot.

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Rule 5: Separate Your Income from Your Wealth

Below is an excerpt from the book, Downsize Sooner Than Later – 18 Rules for Retirement Success, available on Amazon.com.

So far, we have discussed the inevitability of ongoing bills and controlling expenses by living intentionally, with an emphasis on lifestyle and routine as keys to retirement success. In this rule, we begin introducing the topics of retirement finances and investing.

I remember, when helping my mother arrange her financial affairs as a senior, she once said to me, “Ted, I just don’t understand financial things.”

I responded in somewhat the same way she used to respond to me when I was frustrated by schoolwork as a child. I said, kindly, but pointedly,

“No. You must not say that. You are a smart and capable person. And you are fully able to learn about and understand the important fundamentals of your finances.”

In the end, she was able to understand, and this deeper knowledge opened the door to a peace of mind which made the effort to acquire the information worthwhile.

Some of what I am about to explain flies in the face of conventional wisdom.

But give it a hearing. I initially struggled to be open to some of these concepts and had to fight with what “everyone else” seemed to be saying, as well.

Conventional wisdom says, “A person should save and invest an entire working career until, one day, he or she can retire and live happily ever after on the funds from an accumulated nest egg.”

The underlying assumption is that income will be withdrawn as needed from the nest egg while, simultaneously, funds not used for current income will be reinvested over time. Following this “portfolio-based” construct, there should be enough funds to afford a happy retirement, along with a generous balance left over for legacy (i.e. money for the next generation and/or for charity).

If you’ve never heard it said before, there are several serious issues with this popular vision.

The biggest issue stems from the fact that because critical underlying funds necessary for future income remain invested, they remain exposed to risk over time. These underlying funds often establish the core of what you will need to achieve long-term security in retirement. If you lose them, you will be in a very difficult situation.

The financial industry is aware of this concern and recommends the remedies of “asset allocation” and “diversification” as mechanisms for safeguarding future nest egg dollars.

    • Asset allocation refers to owning different types or classes of assets as a means of spreading risk. Stocks, bonds, real estate, and commodities are all different asset classes. Theoretically, when one asset class goes down in value, the other asset classes may or may not simultaneously experience similar declines.
    • Diversification is the strategy of spreading risk across investments within the same asset class. For example, owning one company’s stock is considered riskier than owning shares in a fund that owns stock in many companies from a variety of industries.

The fundamental difficulty remains that even after re-balancing a nest egg to allegedly “safer” asset classes, these assets are still investments and often pose very real and unique risks of their own. Bonds, for example, are often considered a haven. However, bonds possess the risk of going down in market value as interest rates go up. This is critically important to know, as interest rates hover near historic lows. Where will rates be in 15, 20, or 30 years? If rates go up substantially, how will this impact the underlying value and availability of such funds as sources for reliable income in the future?

Further, just because nest egg dollars are allocated to different asset classes offers no guarantee they will act independently from one another other during a downturn. It is entirely possible that bonds, stocks, and real estate may all decrease in value at the exact same moment in time.

For now, I want you to imagine a different path forward.

With this path, individuals save and invest their entire working careers as before, but when they retire, they split their nest egg into two baskets. The first basket is used to fund income, and the second is set aside to remain invested and undisturbed.

In the coming rules, we will break down in more detail what happens with each basket. The important goal here is to understand that this separation is key and serves two game-changing purposes.

1. Income: The first basket is used to establish guaranteed income to cover basic living expenses. This is income that never runs out, no matter how long you live, and that is not dependent on what happens in future investment markets.
2. Wealth: The second basket is used to establish a fund that stays invested and undisturbed throughout your retirement. Because the funds in this basket are not required to fund income, they are better positioned to ride out future market storms and can more safely benefit from compounded growth.

This simple foundational shift opens the door to solving several major problems in the modern retirement era. 

In this blog’s opening story, it would have not only kept James and Patricia from running out of income late in retirement, but, based on historical market records, it would have left them a surplus of millions in invested assets.

Of course, everyone’s circumstances are different and what happened in the past is no guarantee of what will happen in the future. However, success – and failure – leave clues.

The fundamental concept of splitting funds into separate income and wealth baskets can be applied successfully across a wide variety of situations. Whether you have saved a little or a lot, there is substantial opportunity for almost anyone to achieve lasting retirement income security, grow invested savings over time, and acquire greater overall peace of mind.

Questions or comments? 

I can be reached at this link – contact Ted Stevenot.

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Rule 6: Turn Your Monthly Bills into Income for Life

Asset based long-term care insurance as an alternative to traditional long-term care policies

Below is an excerpt from the book Downsize Sooner than Later – 18 Rules for Retirement Success available on Amazon.com.

In this rule, we discuss the first of the two baskets introduced in the last rule and how to create a sustainable retirement income for life.

What ultimately devastates those who run low on funds in retirement is the burden of paying ongoing bills.

This means covering the cost of things like housing, healthcare, insurance, transportation, groceries, and utilities, etc. Running out of income in late senior age is like running out of air. This is because there is very little a person can do to fix the problem. It is likely too late to dust off a resume, and even if you did, would you have enough years left to rebuild your financial well-being? Further, would you have the physical and mental horsepower to become substantially employable again? Would your spouse have such an ability?

Almost 2,000 years ago, the Roman Emperor Marcus Aurelius wrote, “The impediment to action advances action. What stands in the way becomes the way.” It is my belief when it comes to retirement, the same sentiment is true.

The first step to overcoming the worry of running out of income to pay bills in retirement begins with accepting the fact that you will always have bills to pay. The second step is realizing that, just as when you were younger, the best remedy for paying your bills is an ongoing and steady paycheck.

This leads us to the critical question: “What is the most cost-effective and sustainable way to establish a lifetime paycheck in retirement?”

The financial industry offers several possible solutions for deriving retirement income. Nearly all are “portfolio-based” in nature. As discussed in the last rule, this means core funds necessary for future income remain invested and exposed to risk over time. Popular portfolio-based income schemes include a mix of stocks and bonds for income, dividend investing, and the “4%” rule. After a review of a variety of these options, I have come to believe the safest, easiest, and most reliable way to create sustainable retirement income, especially for those who are in better-than-average health, is “pooled income.”

What is Pooled Income?

While this term may sound new to you at first, I can predict that you are already familiar with the concept, just under other names. Pooled income has existed in various forms for thousands of years – well before our modern stock and bond markets were ever conceived. It is the foundation upon which retirement income systems such as Social Security, pension plans, and fixed-rate income annuities function.

Structures vary, but in its essential form, participants contribute funds to a collective “pool.”

• Either immediately or later in life, participants withdraw income from the pool based on amount contributed, age, and life expectancy.
• Income from the pool is promised for life, regardless of how long a person lives.
• In exchange for this promise, there is generally no – or very limited – inheritance provisions for heirs. However, income provisions for surviving spouses are common.
• As individuals in the pool pass away – some earlier, some later – unused funds stay in the pool to support income for those who continue to live.

To assure proper function of the pool, funding levels and reserves are determined by precise actuarial formulas. Depending on the pool – and especially for insurance company annuities – funds are subject to strict government regulation and oversight.

Due to its underlying structure, pooled income generally provides more immediate income per dollar allocated, when compared to other similar sources (such as intermediate and long-term bonds). And, uniquely, it can guarantee an income for the lifetime of the participant.

It is likely you already have at least some pooled income with your name on it. This is from either having been sufficiently employed, as a spouse, or as a beneficiary of some kind.

Doing the Math

At this point, we can begin to bring together some of the ideas previously discussed with a simple assignment.

1. Make a list of your anticipated monthly expenses in retirement and add them together.
2. Make a list of the anticipated monthly pooled income you will receive from Social Security, pension plan income, and any annuities and add them together.
3. Subtract your expenses from your income.

Need help? Click here for a FREE retirement income planning worksheet. 

If your pooled income exceeds your total expenses, you have a surplus. Congratulations! You are well on your way to achieving retirement security and success.

If your pooled income is lower than your expenses, you have an income “gap” or deficit.

With an income gap, every month, for an unknown amount of time – potentially decades – you will have to break into your nest egg to pay bills or find some other way to make ends meet. If you pass away first, your surviving spouse will need to keep doing the same to keep his or her head above water.

Returning to the earlier analogy of setting off on a journey with holes in your boat, because certain bills never stop coming regardless of age, every month you will have to bail the excess water in order to stay afloat. This may not seem significant in the short-term, but can you imagine doing so for 20, 25, or 30 years or more?

If constantly feeding your income gap causes you to deplete your funds, it will likely deliver its hardest blow near the end of your journey – in late age. This is a time when you will be least able to protect yourself or your spouse from the resulting consequences.

Closing Your Income Gap

Imagine you discover that at age 70, you still need an additional $15,000 per year in income to cover your basic monthly bills. Mortality tables show your life expectancy to be roughly 15 more years. Let’s say you have $200,000 available to solve for your income needs. Which of the following options for solving your income gap would you choose?*

1. Put the money in a savings or checking account and withdraw what you need each year. At the end of 15 years, you get the income you need plus a little interest. You have total control. If you die early, your heirs get the remaining balance in your account. But, if you continue to live once the 15 years are up, in just three and a half more years, your funds will be depleted.

2. Invest the money. Use any portfolio-based approach you wish – mutual funds, individual holdings, dividend stocks, bond funds, a mix of all of these, etc. – and withdraw the income you need each year. The funds you don’t currently use for income stay invested. Maybe they boom, maybe they bust. Maybe a little of both. At the end of the 15-year ride, you either come out even, have a windfall, or fall short. No one knows for sure. Live longer than 15 years? Who can say where you’ll be? All bets are off.

3. Purchase a simple, fixed-rate immediate life annuity from a large, highly rated, insurance company. Perhaps choose an insurer old enough to have survived both World Wars, the Korean Conflict, the Vietnam War, the Gulf and Middle Eastern Wars and all the market corrections, depressions, recessions, and crashes over the last 100+ years. The annuity pays you the income you need every year. If you die early, your heirs may get little or none of the funds in return. But if you live 20, 25, 30 years, or more, even into your 100s, the $15,000 per year will continue to be paid to you regardless, effectively ensuring you income for the rest of your life.

Before you decide, a few additional facts to keep in mind:

1. Certain bills never stop coming, regardless of age.
2. No one knows for sure how long he or she will live.
3. Projected mortality is only an average. Half will live longer.
4. The long-term trend for those reaching retirement age is toward higher life-expectancy.

So, which would you choose?

One person I met who ran out of funds for income later in retirement told me she was unaware of the details behind option three altogether. At first, she told me she would “never buy an annuity.” Later, coming to understand what the security of a guaranteed income for life would mean for her peace of mind and security, she said, “I didn’t even know you could do this.”

That same person told me I should spend the rest of my career helping people secure their incomes in the same way that had been so helpful to her. I think about her words often, and it is because of her that I decided to write this blog.

Before our discussions together, I’m not sure what she thought or had been persuaded to believe a life income annuity was – a scam, a rip-off, a poor-performing, high-cost investment, a “Ponzi” scheme – but once explained in its proper capacity, a highly-regulated, safe, and time-tested way to insure income for life, she was a changed person. No longer comparing apples to oranges between investments and insurance, she realized that if she had pursued such an option years earlier, she would not be facing the difficult circumstances she found herself in now.

Even for a person with millions, carving out the $200,000 with the annuity in the above example to solve the $15,000 basic income need still makes sense. For a rich person, this is leverage. Why spend $200,000 of your own money on inevitable bills when you can transfer the long-term risk of your expenses to an insurance company? Especially since you are going to spend the money anyway and money spent on paying bills cannot be left to heirs. What’s more, if you live longer, the insurance company picks up the tab for life. For those in senior age, no other retirement income construct offers such a unique and powerful benefit.

Key Terms to Understand

I have tried to avoid financial jargon in the rules, but I think it is OK to introduce a few terms here. Given you have made it this far, you are ready. The following are terms economists use when discussing the inner workings of pooled income devices:

• A mortality credit is money left in the “pool” of a pooled income system by those who die early. This is where the funds come from, in part, to keep paying income for life to the remaining survivors.
• Longevity risk is the risk of running out of money because of living too long (i.e. ruin).
• Longevity yield is the rate of return generated by those who end up living longer.

Economist Moshe Milevsky, PhD. writes regarding the payouts of life income annuities to people living to older ages:

“…to replicate this enhanced yield by using conventional traded instruments (e.g. regular bonds) is virtually impossible. Moreover, for people at older ages, the implied longevity yield is almost impossible to beat.” (Life Annuities: An Optimal Product for Retirement Income, CFA Institute, 2013., pp 113.)

This quote points to the fact that for those who live longer, what they get back from owning the income annuity is an exceedingly favorable return. The same can be said for other pooled income constructs. I include this quote not to appeal to greed, but to highlight that protecting basic income security does not mean you must first agree to a bad deal. In fact, for those who end up living longer, quite the contrary.

At stake, however, is not the inclusion or lack thereof of a windfall. Aspirations for growth, compounding profits, and gains should be left to separate funds – which we will discuss regarding the “wealth basket” in the next rule. At issue here is solving for longevity risk, which is the risk of living too long and running out of income later in life.

To focus the point further, consider the following scenario:

Joey and Albert were the same age. Neither were ever married. Both worked in the same job. Both earned the same income. And both retired at age 70.

Joey and Albert contributed equally to ______. (Plug in interchangeably: Social Security, company pension, simple fixed-rate income annuity).

When they retired, both were given in exchange for their contributions the same size monthly check, and the promise that their monthly checks would continue for life.

Joey died five years later at the age of 75.

Albert lived for thirty more years and finally passed away at the ripe old age of 100.

Which of the two got the better deal?

Superficially, Albert appears to have had the upper hand. Look at all the extra income he received because he lived so long! But, the receipt of this income was indiscernible in advance because neither Joey nor Albert knew how long he was going to live. In reality, they both received the same deal. This is because, in exchange for their equal contributions, they both received the equal promise of income for life.

If you and I pay premiums for homeowners insurance, but only my house burns down, does that mean you should lose sleep thinking that somehow you got a bad deal? No. We both paid premiums to cover an identical and unpredictable future risk. By spreading the risk prudently, everyone receives an equal assurance of protection.

When does an income annuity not make sense?

There are always exceptions to any rule, but here are at least a few reasons – or sets of circumstances in which – either delaying or adding to an individual’s pooled income sources may not be the best solution.

If you have significantly impaired health, it may not make sense to delay the start of a pooled income benefit such as Social Security. If you only have a few years left to live, you may want to begin income payments earlier so that you will receive at least some income.

But even here, it depends. Say you are the major breadwinner in your family but are in deeply troubled health at age 68. If you don’t need the Social Security benefit now, it may make sense to attempt to delay it to age 70 to maximize the benefits for your surviving spouse.

In the case of an individual with significantly impaired health, purchasing a supplemental income annuity from an insurance company would rarely, if ever, make sense. An exception might be the purchase of a hybrid long-term care annuity, assuming he or she can qualify. Such annuities can be structured with a “rider” or policy endorsement to help cover long-term care expenses. If care ends up not being needed and the contract is never turned into an income stream, the unused principal and interest can be left to beneficiaries. For those who qualify, this is a unique and currently tax-favored way to cover long-term care risk and “get your premiums back” if you don’t end up needing the care – more on this in a later rule.

As stated earlier, for most people, it is exceedingly difficult to anticipate one’s mortality with regard to planning. I have seen some people who thought they were in bad health end up living a long time. I have also seen those who appeared to be in excellent health pass away early.

Ironically, some individuals with certain chronic health concerns often gain an unanticipated advantage that works in their favor. If their conditions are not immediately life threatening but require ongoing monitoring through regular visits to a healthcare practitioner, it can be life prolonging.

Take, for example, a man who occasionally sees a doctor to renew a prescription for erectile dysfunction drugs. At such visits, he will usually receive a routine health screen – heart rate, blood pressure, urinalysis, general wellness check, etc. Sometimes, these built-in screenings flag more serious issues that need attention. Does your dentist take your blood pressure? Do you wear glasses and regularly see an optometrist? Do you need minor surgery requiring pre-operative screening? All these instances provide hidden opportunities to bolster overall longevity.

Other times not to purchase an income annuity.

As mentioned above, individuals with serious health concerns should avoid purchasing income annuities and may be better off preserving their short-term capital. It is  possible that some individuals in excellent health should also steer clear of supplemental income annuities.

No one should buy an annuity if it would consume all or nearly all their liquid or nest egg funds. “Experts” will tell you that at least some funds should be kept aside for short-term cash needs and emergencies. Usually, they recommend emergency funds equaling three to six months of income or, in some cases, even a year’s worth.

I find this advice helpful, but I don’t think it goes far enough. In my opinion, a person must have at least two indispensable elements in place before purchasing a supplemental income annuity. These are:

1. A sufficient liquid emergency fund (at least six months to a year).
2. A sufficient wealth fund.

A “wealth fund” is money you set aside to invest undisturbed for the future. It is money that even after retirement, you do not touch or use to pay ongoing bills. It is money that stays invested and benefits from the power of compounding. In time, this money helps protect you from inflation risk, helps establish legacy, and provides you with an added layer of security in older age.

But what if you feel you haven’t saved enough in the first place?

Many who read this may feel they haven’t saved as well as they might have wished for retirement.

To you, I say, take comfort!

The feeling of wishing you had saved more is common. Asking people if they believe they have saved enough for retirement is like asking people if they think they could be in better shape or exercise more often. Most people say they could on both counts.

If you really feel you are behind, you should first focus on reducing your expenses (see Rules 2, 3, and 4) and optimizing your current pooled income – especially from sources like Social Security. If you still experience a shortfall, you may wish to continue working at least part-time. Do not view this as a defeat! As we will discuss in later rules, the virtues of staying economically productive extend even to those who are wealthy.

If you must continue to work, try to begin setting aside savings to begin building or rebuilding your nest egg as soon as possible. This is crucial! Setting aside savings for growth is important at all ages.

This critical topic is the subject of our next rule.

Questions or comments? 

I can be reached at this link – contact Ted Stevenot.

*Estimated rates were determined at the time of original writing in mid-2019.

Posted on

Rule 7: Plant a Money Tree

Below is an excerpt from the book Downsize Sooner than Later – 18 Rules for Retirement Success available on Amazon.com.

If you have done all the things discussed leading up to this rule, you will be in a unique position.

Accepting you will always have bills to pay (Rule 1) dispels any illusion that someday life gets “paid off”. It doesn’t. You may pay off a house or a car or other similar artifact but relentlessly, as the sun rises each morning, the bills keep coming.

So, what’s a person to do?

Walk away from the status quo.

Analyze your life and choose to live deliberately (Rules 2, 3, and 4). Define what matters most and set your sights on it. Clean up and remove costly mental, emotional, and financial clutter from your life. Doing so opens the door to more focused living and frees up space for the things that matter most. Such restructuring also gives you better control of your expenses.

From there, because no one knows how long he or she will live, arrange your affairs so that your most important ongoing bills will be paid with guaranteed income from pooled income sources (Rules 5 and 6). In this way, your fundamental security is protected regardless of how long you live and regardless of what happens in the investment markets.

After all this, then what? Once your core financial security is established, the next objective is growth. Consider the following metaphor that illustrates the power and importance of growth.

The Mighty Oak

People love oak trees. There’s nothing quite like a big sturdy oak in your yard. In the summer, it offers shade; in the fall, its leaves turn to beautiful colors. Oaks are robust, long-lived, and can bestow natural beauty for a lifetime.

If you planted an oak sapling today, how tall do you think it would grow in 25 years?

Assuming you take reasonable care of it – including not cutting it down, pulling it up by its roots, or carelessly trampling it over – it should grow roughly 80 feet tall with a trunk well in excess of two feet in diameter. By anyone’s estimation, a formidable tree.

By following the rules presented earlier in this book, your ability to increase your sense of financial wellbeing and grow your wealth can be just like growing that oak tree.

As mentioned earlier, after attacking your expenses, nest egg funds are separated into two parts. The first part, as discussed in the last rule, is used to solve for lifetime income. The second part is set aside as an investment and wealth fund. Your wealth fund, which henceforth, we’ll call a “money tree,” is planted just like the oak in our example above and left to grow.

Planting the sapling of a money tree at age 65 – 70 and leaving it to grow can allow your wealth to increase substantially even during your senior years.

But this means not recklessly cutting off its branches to pay monthly bills or tearing it up to “trade” for other trees in the hope of promoting faster growth or pulling it out of the ground in fear of future storms.

Left undisturbed, a money tree can be there for you and your spouse in later age:

    • A mature money tree offers protection from inflation. How? By your mid-to-upper-80s, money tree funds will have been positioned to benefit from decades of compounded growth. If you need to boost your income to offset rising prices, liquidating a small portion of funds from your money tree offers a solution. Where suitable, this can be used to purchase supplemental income in the form of a fixed life income annuity. As a bonus, such annuities are less expensive to purchase at older ages.
    • A money tree offers funds for legacy. This is money to leave to children and grandchildren, for education, for charity, and for cherished causes.
    • A money tree offers increased independence, dignity, and peace of mind in later age.
    • A money tree provides the opportunity to grow financially throughout your senior years. As a result, the psychological benefits it bestows are far reaching. Simply knowing that regardless of your age, you remain positioned to accumulate value and grow in wealth will make you feel more confident and secure.

The reality is, you have been working to grow your whole life. This includes growth in knowledge, wisdom, experiences, relationships – and yes, in finances. Just because you retire doesn’t mean this has to stop. If, with relative ease, you could maintain – or even increase – your capacity to grow financially into your late senior years, wouldn’t you want to?

If your answer is yes, the easiest and most reliable way to continue financial growth throughout retirement is to plant and grow a money tree.

How to Plant a Money Tree

The first step to planting a money tree is finding the “sapling” or the initial funds you’ll need for it. Here are a few possibilities:

1. IRA-based/pre-tax funds. It may be possible for you to sequester some portion of your IRA nest egg and allow it to grow. Complicating this are the required minimum distributions or “RMDs” from such accounts, as well as tax implications relating to IRAs that are left for inheritance or legacy. Depending on your circumstances, IRA funds may be better suited for focusing on income planning. Immediate fixed life annuities purchased to provide income with pre-tax IRA dollars are known as “qualified” annuities.
2. Non-IRA/taxable funds. These are dollars outside of an IRA or other pre-tax retirement vehicle. Taxable funds, when invested, generally incur ongoing tax liability due to interest, dividends, realized gains, and/or as a result of internal rebalancing of holdings. However, when structured properly, such expenses can be minimized. Sources for taxable funds may be personal non-IRA savings, severance funds, after-tax proceeds from the sale of a home, property, or business, received life insurance death benefits, and after-tax inherited funds.
3. Future income. If you stay economically productive during retirement – even on a part-time basis – this can be a great way to fund a money tree. For those who have not been able to save as they wished throughout their working years, this may be their primary option. Others may want to “split” the money they continue to earn between funding a money tree and paying for extra expenses, such as travel and recreation.

In my opinion, options 2 and 3 above are the best candidates for funding a money tree. I challenge you to find non-IRA funds to “plant.”* Such funds can be left to grow with minimal disruption and complication. Consider, as well, that while most wealthy people do have IRAs, the lion’s share of what actually makes them wealthy is generally held in other places.

Once you have decided on the funds that make the most sense for funding your money tree, the next consideration is where to plant it.

Countless books have been written about investing, but I’ll keep it extremely simple: For most people, investing money tree funds in “low-cost, broad-market stock index mutual funds” will offer the easiest and most cost-effective option.

    • A broad-market stock index fund is a fund that holds investments mirroring a large segment of the overall stock market. Participating stocks are generally determined by an independent index, such as the S&P 500Ⓡ, Russell 2000Ⓡ, Wilshire 5000Ⓡ, etc.
    • Index investments are available through fund companies like Vanguard, Inc., Charles Schwab, Inc. and Fidelity, Inc. or as stock exchange traded shares called ETFs (i.e. “exchange traded funds”). Two examples of broad-market stock index ETFs are “VOO,” which represents Vanguard’s S&P 500Ⓡ Index Fund and “VTI,” which represents Vanguard’s Total Market Index Fund.
    • Owning such investments does not require expensive management fees or high brokerage commission costs. Fund shares can be purchased and held either directly through a fund provider or as ETF shares through a reputable online broker such as E*TRADE, Inc., TD Ameritrade, Inc., Charles Schwab, Inc., etc.

Disclosure! I am not paid to mention any of the companies named above and, as of this writing, am personally a satisfied E*TRADE customer. My wife and I also own ETF shares of VTI and VOO, as well as direct index fund shares from Vanguard, Inc.

Broad-market index funds are as close to a “set it and forget it” investment as one can find.

They are low cost, easy to access, and incur minimal fees due to management. They are tax efficient because they experience less frequent trading over time. They are also easy to buy and sell, and they are diversified because they spread investment over a broad array of underlying stocks. If all that weren’t enough, low-cost broad-market index funds also have a strong track record of outperforming more costly “managed” mutual funds with much higher fees.

I once heard a former hedge-fund manager on a podcast say, “The only people who make money in the stock market are people who buy and hold forever.” Assuming this is true, if there were ever an ideal “buy and hold forever” investment instrument, broad-market stock index funds are it.

If you need even more proof on the virtues of index fund investing, take a moment to do a search online of “Warren Buffett quotes on index funds.” This search reveals a deluge of articles on the wholesome goodness of long-term, broad-market index fund investing.

Still, with the stock market, there are no guarantees. With any investment, risk is inevitable. Even in the best case, on its long-term trend toward going up, the market goes both up and down. To protect yourself, you must embrace the right mindset. What do you think the chances are that there will be a major market correction or significant downturn over a multi-decade retirement? It seems sure to happen at least once, if not several times.

When these moments occur, your outlook must be that you are an investor and are in it for the long haul. Would you tear a young tree out of the ground due to the threat of a coming storm? Of course not. To grow to its fullest potential, it must stay in place and fully weather future storms. It may survive; it may not. That is the way of life. One thing we know for sure, though, is that an unplanted or uprooted tree will never grow.

So, accept it and let go. Plant wisely and you can take comfort in knowing you have done the best you could.

Separate Income from Growth

By following the earlier rules, you will have separated your income from your wealth. This means that even if the market goes down, you will still get a check in the mail each month regardless. Your basic security remains intact. You can ride out market peaks and valleys with little or no disruption.

Some advisers will shudder at encouraging the continuance of growth-based investing for seniors. They will exclaim: “How can you suggest such ‘risky’ equity ownership for people at later ages? They may not have time to recover from downturns! They must actively manage! They must reallocate! They must fly to safety!”

Warnings such as these are the continued expression of weakness and anxiety embodied in the portfolio-based retirement income model. Downward pressure on either stocks or bonds are an ever-present danger in the portfolio-based income world. Palatable remedies for resolving such concerns – beyond retreating or cashing out – are few and far between.

The central flaw with the portfolio-based income model is that growth and income are incompatibly mixed.

As a result, increased exposure to stocks to achieve future growth – especially when times get tough – has the synchronous effect of increasing one’s overall risk of ruin. If markets crash, the foundation for future income and security crashes along with them.

These difficulties are made even worse, like pouring fuel on a fire, when you are forced to make income withdrawals from your portfolio to pay bills during times of market stress. Such withdrawals amplify a risk known as “Sequence of Returns,” which accelerates the path to catastrophe. 

Far too many retirees find themselves trapped in a portfolio-based income model with no escape when markets are in peril. Monthly bills continue to arrive and must be paid. These bills do not care if the market is up or down. Liquidating assets to pay expenses during a down market makes it more difficult to recover nest egg funds in the future. This is because the more your nest egg shrinks, the higher the returns you will need to get back to normal.

But it doesn’t have to be this way.

If you have ordered your life such that:

    • Your expenses are simplified and under control.
    • Your critical bills are covered by high-quality pooled income.
    • You have a sufficient liquid emergency fund (six months to a year of income in liquid savings).

…you will have built a firm foundation upon which to stand. From such a position, you can afford to put additional funds to work for growth in the form of a money tree which will expose you to far less personal and fundamental risk. It follows that, because you don’t need the funds from your money tree to pay ongoing bills, your investments can weather the ups and downs of future markets without negatively impacting your day-to-day security.

The Secret to Building Wealth

I own a company that invests in commercial real estate. You may be surprised to learn; I have never taken a single dime of spendable income from that business. Investing, reinvesting, and leaving investments to grow undisturbed in this manner, is how people build wealth.

Stated succinctly:

Wealth is created by owning assets that accrue value to you, that you do not simultaneously consume.

Like a snowball rolling down a hill, such investments are free to expand and grow. This is how wealth sparks to life and increases in size over time.

Much has been made in the media about those who have little or no retirement savings and who will be forced by necessity to live on Social Security alone. Implied is that these millions of individuals have lost financial hope and face irrevocably dark and distressing financial futures living on dreaded “fixed incomes.”

To this, I say, “Poppycock!”

For most people – especially Baby Boomers – there is still time to fight!

Given the length of modern retirements, the opportunity to build at least some wealth is open to just about anyone. All things are relative, but even a person with no retirement savings could follow the rules we have discussed so far and still accumulate significant value over time. The key is arranging your affairs such that you can safely invest funds that will be left alone to grow. The surest path to doing so is to control your expenses, cover your ongoing bills with pooled income, and plant a money tree that you do not disturb.

If you will do this, you can build equity and security for yourself and those you love.

Questions or comments? 

I can be reached at this link – contact Ted Stevenot.

Posted on

Rule 8: Leave a Trail of Breadcrumbs

Below is an excerpt from the book Downsize Sooner than Later – 18 Rules for Retirement Success available on Amazon.com.

Some days are surreal.

I never imagined that one day, I could go to the mailbox at the end of my driveway to find an envelope containing “updated certified death certificates” for one of my own children. But while writing the material presented on this blog (i.e. now a book on Amazon.com), it happened.

The day the certificates arrived, I knew they were coming – or, at least, I was expecting them. The first set we received from the funeral home had listed the manner of death as “Pending Investigation.” The new version listed manner of death as “Natural.”

In certain circumstances, such as when an otherwise healthy young person dies unexpectedly, the law requires an autopsy be performed to review the cause of death. This makes sense. It is intended to protect the rights of such individuals, and I am grateful for the professionals who stepped up and did their jobs on my son’s behalf.

Up until the Friday morning of October 5, 2018, my wife and I had led a relatively charmed life.

While we had recently experienced the loss of my wife’s father and older brother, these were the first closely related deaths we had seen in many years. But these losses were incomparable to losing our son. Losing John was a major shock. No advance warning. No indication of any serious problem. It still makes no sense and seems impossible. How could this have happened?

When I started writing the material presented here, it was in the summer of 2018, and John knew all about the project. He and I had both been involved in similar writing pursuits in the past and even co-authored a Kindle book together while working in politics. Separately, John wrote his own manuscript on lifestyle design and the benefits of working remotely. I am planning to publish John’s book around the same time the book based on this blog is released.

I love my son John.

Or is it more grammatically correct to write, “I loved my son John?”

I’ll stick with love, as I still feel the same about him as I always have. Not a day goes by that I do not think about him. What a beautiful and exemplary young man! Spirited and strong willed as a youth – at times, he was a handful to raise. But his color and rich vitality helped shape him into the person he ultimately became.

John was a masterwork chiseled from stone. A serious student of life, he was the archetypal “old soul.” Wise and discerning beyond his years, he possessed an inherent appreciation for life and a drive to live fully and do his best. In recent years, I was fortunate to spend many enjoyable days with him, working on various personal and professional projects.

John grew to become one of my closest friends, and I could not be prouder of him.

On the day he died, he was supposed to stop by the house in the early morning to record what would have been the 47th episode of our weekly podcast, Sales Prospecting School. My wife and I had seen him the prior evening, watching him and his girlfriend, Erika, play in a weekly sand volleyball league. One of the team members had to leave early, which allowed my wife to stand in and play a set with John.

Later that night, after texting “Good night!” to Erika, who was staying with her aunt to leave early the next day for an out-of-state wedding, he went online and played Fortnite with his brother Tom, who was then attending Brainstorm Concept Art School in Los Angeles, CA.

When John didn’t show up at our scheduled 7 a.m. time to meet, I thought, no worries.

Something must have come up, or perhaps he overslept. Unusual for him, but possible. A little after 7 a.m., I texted him, “Podcast today?” But there was no reply. A bit later, I texted, “Everything OK?”

Still no reply. I checked the Find My Friends app on my phone, and it indicated he was at home. I checked it again later, after he should have been at work, and it continued to show him at home.

I thought, this can’t be right.

I texted his girlfriend and discovered that she had not heard from him yet that morning either.

After several calls to his phone with no answer, my wife, who happened to be working from home that day, jumped in the car with me to go and see what was happening in person. After picking up keys from his girlfriend’s uncle, we started the drive to his condo.

On the way, we thought it might be a good idea to call the police. So we did, and an officer was dispatched and arrived ahead of us.

The officer banged on the door, but still there was no answer.

When we finally arrived with the keys, the officer and I went in together. I didn’t know what to think or expect. Would he be there? Should I hope he’d be there, after all the non-replies? If he was there, what could account for his lack of response? Any explanation that might result in a favorable outcome was becoming increasingly difficult to conceive.

His dog, Ares, was there and had been barking the whole time. When we opened the door, things looked normal, but there was no sign of John. We walked down the long central hallway toward his bedroom. I will never forget, for as long as I live, turning the corner and looking in the direction of his bed.

There he was.

Subconsciously, I felt a momentary flash of relief. He’s here. That’s supposed to be a good thing, right? But, how can he still be here and in bed? How can he not have woken up or replied to all the texts, phone calls, barking, and door knocking? A few steps more and the officer and I were by his bed.

When your child sleeps peacefully, you know what it looks like. Each kid is different. John used to curl up on his side into a partial fetal position and pull his arms in toward his chest. As a parent, you may not realize you know what your child looks like in this peaceful state, but you know it intuitively. Here was John. No sign of distress. His phone by his side. Looking completely normal. Blanket up to his shoulders. Partially curled up. Just how he always looked when peacefully and restfully asleep.

I reached to touch his arm, I guess thinking to check for a pulse. But, instead of a pulse, I felt cool temperature from his skin.

He was gone.

Jan had not come in with the officer and me. It was too much. She was sitting on the steps outside waiting. I had to go out and tell her. When I did, I helped her to her feet, held her in my arms and brought her eyes to mine. I said, “I’m sorry. He’s gone.”

After taking Jan to see John at his bedside, we went through the customary – but wholly unfamiliar to us – procedural routines required by the police in such situations. Once the required preliminaries were worked out, we had to call John’s brother and sister to let them know what had happened.

I guess I’ll stop this story here.

I share the background of what happened to John to set the stage for discussing the circumstances that occurred after his death. John was young, in exemplary physical shape, and seemingly healthier than just about everyone around him. Further, he was 28 years old, unmarried, and had no children.

Eventually, it was discovered that he suffered from an asymptomatic heart condition impacting the interior of his heart, which eventually caused it to stop functioning. The condition proved to be so rare, the county coroner said she had not seen anything like it in 10 years of service.

Given John’s circumstances, people might ask what need would he have for estate planning, a will, powers of attorney, or other similar effects? No wife, no kids, what difference does it make?

How complicated could it be?

You’ll note a common theme recurring with many of the rules presented here that orienting your affairs properly is not so much about you, but about the resulting impact that doing so has on those closest to you. In the case of John’s estate, the gauntlet that was required to be run after he died served to add more pain to an already inconceivably painful situation.

I don’t blame him. Neither he nor I had any idea this was coming, and, as I was in the position of wise parent and steward, it was as much my oversight as anyone’s that his estate issues occurred. Had I pressed John to plan for such a possibility, I am certain he would not have hesitated to do so.

After working with an attorney friend to become appointed as John’s executor, the operative element of picking up the pieces of his estate was an avalanche of calls in which I would repeat:

“My name is Ted Stevenot. My son John Stevenot passed away on October 5, 2018. I am the executor of his estate. I am calling to discuss the details of his account with you and to eventually close it in order to resolve his estate.”

Only to hear: “I’m sorry for your loss. Let me transfer you.” Then I would have to say it again, and again, and again. So many calls, so many transfers, so many times repeating those same lines over and over.

Have a customer service snafu occur after administrative fumbles and multiple calls trying to resolve an issue?

No problem. Say it again.

At one point, I needed the 12-31-2018 ending balance on John’s Roth 401(k) retirement account, but the famous investment company involved was such a tangle of administrative short circuits they could not get past their own internal obstacles to answer me directly.

“We don’t know you.”
“We can’t verify who you are.”
“This account is serviced by a third party.”
“The plan year is through November, so the statement doesn’t show the year end balance.”
“An employer match? That’s not Roth.”
“The statement doesn’t show a breakout of the two?”
“Can we get that?”
“Let me put you on hold.”

And on and on.

Finally, weeks later, after apologizing in advance to the unlucky service representative who happened to answer my call for what he was about to hear, I unloaded. F-bombs, shouting, swearing, threats to obtain court orders, legitimate threats of legal action, etc., etc.

“Let me put you on hold.”

This time, after only a five-minute wait, I finally got the answer that no one had been able or willing to give me for weeks.

There are many more stories like this I could tell, but here is the gist:

    • Even when things are arranged properly, dealing with the legal and administrative follow-up to an estate can be very challenging and emotionally costly for loved ones.
    • Arranging your affairs ahead of time prevents those closest to you from suffering needless additional expense and pain.
    • Because of these and other factors, carefully planning your estate is the right and responsible thing to do.
    • What’s more, having your estate plan put together will give you greater peace of mind.

I am as much a do-it-yourself guy as the next person, but in the estate planning realm, I incline toward getting professional help to be sure you cover all your bases correctly. Depending on your circumstances, there may be an upfront cost of anywhere from a few hundred to a few thousand dollars. The good news is, the cost of pre-planning your estate is generally much less than the cost of sorting things out after the fact.

Ten estate planning items to get in order NOW if you haven’t done so already.

1. Have a will. A will is a document prepared before your death to help manage the distribution of your assets after you die. A will is also important for appointing guardians to provide care for minor children. When someone dies, there is a legal process to distribute assets to heirs and pay debts to creditors. This process is called “probate.” Rules for probate are determined by state laws. The legal authority that enforces those rules is called “probate court.” To be valid, your will must follow the rules of the state in which you reside. If you die without a will, or if there are assets in your estate without designated beneficiaries, the probate court initiates a supervised process for distributing those assets and dealing with disputes. This supervised process is what people mean when they speak of “going through probate.” Having a valid will that specifies where assets should be distributed circumvents much of the hand-holding imposed by the court that occurs in the absence of a will. As a result, having a will generally makes settling your estate easier, less costly, and less emotionally stressful for loved ones.

2. Have a living will. Also sometimes called an “advance directive” or a “directive to physicians,” a living will is a document that expresses your wishes for end-of-life care. This is critical in the event you become unable to communicate those wishes yourself due to an accident or illness. Do you want to be sustained indefinitely by life-supporting machines? Or only supported by machines for a certain period? These can be difficult questions to answer. If you do not make your directives known in advance, you may leave loved ones guessing what you would have wanted during an unimaginably difficult and stressful time.

3. Appoint durable powers of attorney for finances and healthcare. A “power of attorney” is a legal document that gives authority to another person – also called an “agent” – to act on your behalf. Powers of attorney can be created for a single transaction, such as closing a real estate sale, or be comprehensive and allow another person to manage all your financial affairs. A power of attorney is “durable” when it remains in effect even if you become incapacitated and are unable to make decisions on your own. Powers of attorney only apply while a person is living. Once someone dies, the executor of the estate becomes the new authority.

A Durable Power of Attorney for Finances is a legal document that allows you to appoint another person to make financial decisions and administer financial transactions on your behalf. This person should be someone you trust who is proven to be reliable and responsible. Such an individual may pay bills for you, deposit checks, oversee investment accounts, file taxes, and help administer finances.

A Durable Power of Attorney for Healthcare is a legal document that allows you to appoint a person to help manage and make healthcare decisions on your behalf. Unless otherwise limited, a durable healthcare power of attorney has authority to make decisions about things like nutrition, hydration, medications, tests, surgeries, choice of doctors, hospitals, rehabilitation centers, and other elements of care.

Often a single person may be appointed to serve as both the financial and healthcare power of attorney. However, it is generally recommended to establish separate and distinct documents authorizing each of these authorities. This is done to provide greater clarity and offer a buffer of privacy between financial and healthcare-related concerns.

4. Have a folder with your passwords and logins. When John died, one of the added complications we had to face was not knowing his passwords or logins for his phone, email, computers, and other login-based accounts. As I write this, the only password we have been able to guess successfully is the login for his Xbox Live account. We had to spend hundreds of dollars to gain access to his principal computers so we could retrieve and preserve cherished writings and photos from him. At the time of writing, we still do not know the password to his phone or email. John and I worked together for years on digital projects. He knew many of my logins, but sadly, I never learned his. I thought I was respecting his privacy. It turns out, that was a ridiculous thing for a trusted family member to think. To solve this problem, establish a folder to be kept in a safe place for loved ones that includes logins and passwords for things like phones, computers, tablets, bank accounts, email, social media, and other password-protected items. A challenge is keeping the file updated over time, as passwords often change. There are online services that may be able to help manage this information for a small fee. Emerging in the category of digital planning is the “Durable Digital Power of Attorney.” This designation is intended to authorize access and control over person’s digital assets should he or she become incapacitated. See your state’s laws to review what options are available.

5. Properly designate beneficiaries on accounts, especially retirement accounts, IRAs, insurance policies, and trusts. Any account you have that can name a beneficiary – especially life insurance, trusts, IRAs, and retirement accounts – should be updated to reflect the current and appropriate beneficiaries. If you have an old will or trust, one of the most important reasons to keep it updated it is to be sure beneficiary designations are current and correct.

6. Where suitable, designate proper joint-ownership status for bank accounts and titled property. When certain assets are owned “jointly,” it can open the door to transferring the value of those assets to a surviving joint-owner upon death. Bank accounts that are owned jointly often include “rights of survivorship.” This means that when a co-owner dies, the remaining survivor becomes the sole owner of the account. Real estate can sometimes be titled jointly, such that a survivor becomes the owner of the deceased person’s share upon death. Check with the laws in your state and with a qualified legal adviser to determine whether designating joint ownership of certain accounts or assets makes sense for your situation.

7. Write down your final wishes. Over and above legal and financial issues, there are many additional questions that arise when someone dies. Any answers you can provide to such questions in advance means loved ones won’t be forced to guess what you want while they are already under stress. For example, do you want to be buried or cremated? If you wish to be cremated, what do you want done with your ashes? Would you prefer a formal church-based funeral or an informal “celebration of life”? Is there a funeral home you can recommend, so loved ones won’t have to scramble at the last minute to find one? Is there music you’d like played or pictures you’d like shown at your memorial service? While no one can anticipate every detail, any answers you provide to such questions in advance helps make things easier.

8. Consider a final-expense life insurance. Conventional wisdom for many decades has been to “buy term and invest the difference.” This idea became popular about the same time companies began to transition from lifetime pensions to personally directed retirement savings plans like the 401(k). The long-term viability of owning only term life insurance has become clouded by the modern reality of millions working and living much longer. The result is that a substantial population are entering their senior years with no life insurance in force. Hindsight is 20/20, but perhaps better advice would have been to buy “mostly” term and invest the difference. Though not as catchy, it would have encouraged individuals to secure at least some permanent life insurance to help protect themselves over the long-term. Today, one of the fastest growing segments of the insurance market is final-expense life insurance. Such policies have lower face amounts, offer affordability, and are generally easier for which to qualify. Even if you have a sizable estate, an extra $25,000 – $250,000 arriving soon after you pass away extends a simple kindness to loved ones.

9. Write your own obituary. This may seem a bit of a stretch to consider, but experience guides me to suggest it. When John died, one of the hardest things my wife and I had to do was write his obituary. It had to be completed within days after his death, while our ears were still ringing from the shock. It was also resentfully expensive. If you didn’t know it, obituaries published in local papers or online news sites generally aren’t free. John’s cost over $700, though it was only a few paragraphs long. If he had written something in advance, would it have really helped? Maybe. Maybe not. It could have at least given us a guideline. Many life planners suggest writing your own obituary as an exercise to help focus the overall direction of your life. It’s something to consider at least. If you do write one, include it in the folder with the rest of the documents we have discussed, so loved ones can find it when needed.

10. Don’t put it off. Don’t want to be a burden? Don’t want to leave a hot mess behind when you go? Don’t want the people who care about you to experience needless additional cost and suffering because you failed to plan? Then get the above list together NOW! The longer you wait, the harder it gets. Don’t wait until you become less capable of making decisions before putting your affairs in order. Waiting too long and failing to act forces others to meet what is your responsibility. Is this how you want to be remembered? Is this how you want to treat the people who love you the most? Because you’ve read the above, you can no longer say you didn’t know. Even if it costs some professional fees to cross the t’s and dot the i’s, so the hell what? Get it done.

Questions or comments? 

I can be reached at this link – contact Ted Stevenot.

Posted on

Rule 9: Get Your Insurance Premiums Back

Below is an excerpt from the book Downsize Sooner than Later – 18 Rules for Retirement Success available on Amazon.com.

One of the biggest risks to security in retirement is the cost of healthcare. Much has been said about this in the media, and projections for the future look daunting. The issue is compounded by the fact that by 2030, roughly one in five Americans will be of senior age. It follows that a surge of demand for healthcare is coming, and the cost to cover these services will be unparalleled.

There are two major categories of healthcare expenses that stand out as serious concerns for seniors. These are “health insurance” and “long-term care.”

    • Health insurance. Health insurance for seniors in the United States is called Medicare. It can be accessed in a variety of ways. Premiums for certain components of Medicare may vary, based on income. For those below certain income levels, states administer a program called Medicaid to provide additional help. An essential resource to learn about health insurance options for seniors is the medicare.gov website. Everyone approaching the age of 65 would benefit from downloading and reading the booklet, Medicare & You. This free resource outlines the basics of how Medicare works, important deadlines for signing up, and how to find help with questions on a state and federal level.
    • Long-term care. Long-term care expenses are costs associated with extended care that are generally not covered by health insurance. Many people hear the words “long-term care” and mistakenly think “nursing home” insurance, but the issue is much further reaching. Examples of long-term care expenses over and above nursing home care include costs associated with assisted living, home care, adult day care, respite care, and Alzheimer’s care. Other related costs include paying for modifications to a home, in home help, custodial services, housekeeping services, therapist visits, private nursing care services, and more.


The ins and outs of Medicare are beyond the scope of this book. Given that there can be penalties for failing to sign up by certain times or under certain circumstances, it is a good idea to visit the medicare.gov website and get to know the basics. Sometimes insurers or other organizations offer Medicare “educational events,” which provide free information about Medicare. Such events are helpful, and, by law, no one is permitted to try to sell you anything at a Medicare educational event.

The issue of long-term care is a separate concern.

Long-term care is a modern-era problem and the unintended consequence of the evolution of societal structures, as well as ongoing improvements in healthcare.

In the past, families often lived their entire lives in the same region of the country. In many instances, extended families even lived together in the same household. When an individual became old or infirm, the family took responsibility for providing needed care. Family-based care, as this is known, was more viable in the past because healthcare was less costly and more limited in scope. Together with this reality, people didn’t live as long, and they did not survive with many of the chronic conditions with which they can survive today.

In modern times, families are more geographically spread out and, in many ways, life has become more complicated. Frequently, in households of adult children, both spouses work and have children of their own to raise. Such demands make the logistics of reliable family-based care more difficult.

The overall cost of providing extended care has also increased dramatically. It used to be that spending hundreds of thousands of dollars caring for an elderly individual wasn’t possible. But those days are gone. It is a wonder and a blessing that people can live longer and more comfortably through many heretofore debilitating health concerns, but doing so comes with a price.

One solution to help defray the costs associated with long-term or “extended” care is insurance.

But there are several challenges with insuring this risk.

A few examples include:

    • Because long-term care expenses can be considerable and have a higher probability to manifest, premiums for long-term care insurance can be costly.
    • You can’t wait until you are already sick and in need of care to purchase long-term care insurance. Individual policies are medically underwritten and must be put in place before debilitating conditions occur.
    • Buying long-term care insurance requires the ability to anticipate far in advance of ever needing benefits. Many people – especially men – feel invincible and avoid such planning, believing, “It won’t happen to me!” Such feelings align well with human nature and survival instincts but are unreliable as a basis for predicting the future need for extended care.
    • A person buying long-term care insurance in their 50s may pay premiums for 30 years or more before ever seeing a benefit. This is a very long haul, and many are tempted to throw in the towel along the way.
    • Some end up shouldering the burden of costly long-term care insurance premiums through the whole of their senior years without ever needing to file a claim.

The good news is there are ways to protect yourself from the risk of extended care and avoid at least some of the above pitfalls. It may even be possible under certain circumstances to “get your premiums back” if you don’t end up needing care.

Before diving into the “how to’s,” one more important point.

The Hidden “Why” for Long-term Care Planning

You’ll note in our discussions of issues ranging from downsizing, to finances, to estate-related concerns, how often the question of planning – or failing to plan – results in a direct impact on the continued wellbeing of the surviving spouse after the first spouse is gone. The reality about extended care planning is similar. It turns out, people who get sick and need extended care generally end up getting the care they need, one way or another. The real concern is, as after a hurricane, the damage that providing such care leaves in its wake.

Take a moment and answer this question:

“Of course, it could never happen to you…but in the unlikely event you can no longer care for yourself, who in your life would be the first to drop everything to make sure that you receive the care you need?”

Well, who would it be? Your spouse? A partner? A sibling? A child? A lifelong friend? Name this person and call the image of him or her to mind.

Whoever the person is, he or she has the most to lose.

This individual – or sometimes, a combination of individuals – clearly cares about you deeply. But without an advance plan for the possibility of extended care, he or she will be the one boxed into figuring out what to do for you – essentially, shouldering a responsibility you have decided to look past or avoid. What’s more, as in many other areas we have discussed, he or she will be forced to deal with these issues under enormous stress, in the face of great cost, and with little time to lose.

You may try to tell this person, “Wait! Don’t do it. Leave me alone. Keep living your life. Don’t feel responsible for taking care of me!” It is wishful thinking to imagine that someone so close to you would abide by such words.

I once spoke to a multi-millionaire who had two adult daughters. In his late 60’s, he lived alone in a high-rise luxury condo. When I asked him about planning for long-term care – an issue he could have easily resolved in about 60 minutes and with a check he wouldn’t even miss – he said, “They can just push me off the balcony.”

As far as I know, that was the extent of his planning. The abdication of his responsibility to formulate a plan places the burden squarely on the shoulders of his daughters, who are living their own lives and surely have their own problems to worry about. If and when extended care is needed, solving for it will be necessarily more reactive, stressful, costly, and emotionally painful – especially for them.

In terms of my own planning, I know my wife would step up, but I also have a daughter who would insist I got the care I needed. When I think about it, the thought of my daughter’s involvement really stands out. I know her. She is a determined individual. Regardless of the personal cost, she would chew through a wall to be sure I was cared for. Denying this fact and the resulting consequences doesn’t help her or my wife. In truth, it only puts them at greater risk.

Consider the following progression of dealing with an extended care event:

    • As a long-term illness or extended impairment unfolds, the level of care required gradually increases. Sometimes it happens quickly, sometimes almost imperceptibly. If you have a surviving spouse, the weight will generally fall first on his or her shoulders.
    • Most spouses are not professional caregivers. Even if they were, a buffer is optimal for emotional and physical protection. This is why surgeons don’t generally operate on family members.
    • Without such a buffer, harmful consequences begin to arise. The physical and psychological stress of observing the slow degradation of the health of a partner, in the midst of increasing demands to provide round-the-clock care, compound. This often leads to unrecoverable damage. For example, a spouse attempts to lift a suffering partner for toileting and suffers a herniated disc of his or her own.
    • Frequently, in families with children, one or more of the children will attempt to step in to assist the struggling spouse, in the exhausting effort of providing ongoing care.
    • Because the need for care can be constant – every day, all day, and even through the night – meeting the demand for care requires great allocations of time and energy.
    • A child forced to step in to help carry the weight can experience fallout, affecting his or her relationships with spouse and children, relationships with friends, career, personal pursuits, avocations, individual health, involvement in the community, and more.
    • Frequently, the extensive financial drain for funding extended care leads to encroachment on nest egg funds earmarked for other purposes, such as future income. This can significantly threaten the financial security of a surviving spouse and extinguish any hope of legacy for heirs.

The key to success in extended care planning is to establish a plan in advance that provides a buffer for those closest to you.

    • Most people prefer to be cared for at home for as long as they can.
    • Ideally, the goal should be to empower loved ones to hire and organize professionals to provide care, rather than forcing them to provide care themselves. This is better for you and safer for them.
    • Finally, where suitable, seek to reduce or eliminate the cost of providing such care through the leverage of long-term care insurance.

How to Get Your Long-term Care Insurance Premiums Back

What if there were a way to secure long-term care insurance, but if you didn’t end up using it, your heirs could get the money you put into the policy back?

Over time, the shape and form of long-term care insurance has continued to evolve. When the first long-term care insurance policies were introduced decades ago, they were new to everyone, including insurers. Companies tested many different plan options and actuarial assumptions for pricing policies adequately. In some cases, insurers overestimated their future ability to meet expenses and ended up having to raise premiums.

On August 17, 2006, the Pension Protection Act (PPA)* went into effect and altered the long-term care insurance landscape even further. Importantly, the PPA opened the door for insurance companies to offer riders to qualifying life and annuity policies to provide tax-free withdrawals for the purpose of funding certain long-term care expenses. This set the stage for the introduction of new hybrid or asset-based long-term care policies. Under the right circumstances, such policies can serve as an alternative to traditional long-term care insurance.

*2006 PPA documentation link: https://www.dol.gov/agencies/ebsa/laws-and-regulations/laws/pension-protection-act

A few characteristics of hybrid or asset-based long-term care insurance:

    • Asset-based long-term care insurance is a life insurance policy or annuity that includes a rider (or riders) which expand coverage to help pay for qualifying long-term care expenses.
    • In general, if you don’t end up using the policy for long-term care services, you won’t “lose” the money you put into it. This is because the underlying policy will still carry out its primary function as either an annuity or a life insurance policy.
    • If benefits are never needed, either the death benefit of a life insurance policy or the accumulated funds of an annuity can be left to heirs (i.e. pre-tax accumulations from annuities are taxable to beneficiaries).
    • Insureds can live a long life with the peace of mind of having long-term care coverage, but without the anxiety of constantly paying premiums which they or their beneficiaries may never recover.
    • Most hybrid policies require a fixed, upfront premium to be paid, though some contracts may allow for ongoing contributions.
    • Internal funds grow on a tax-deferred basis and qualifying long-term care expenses are generally paid on a tax-advantaged basis (i.e. subject to state and federal rules).
    • At the time of writing, at least one insurer offers a policy that can be purchased jointly. This allows both individuals in a couple to benefit from coverage under a single policy.
    • Depending on the contract, additional riders may be available to provide protection for inflation as well as other extended benefits.
    • Asset-based policies are medically underwritten, but some individuals may find it easier to qualify for certain types of these policies.

When to Avoid Long-term Care Insurance

For some people, it doesn’t make economic sense to buy long-term care insurance because premiums will consume too much of their available savings or income. This is a big concern, as many traditional policies expect premiums to be paid for a lifetime. I have heard multiple seniors speak unhappily about bearing the weight of ongoing long-term care insurance premiums, especially in their later years.

Individuals below certain asset and income levels may qualify for state Medicaid programs that assist in paying for long-term care. However, qualifying for such help frequently requires an individual to “spin down” his or her assets to extremely low levels.

Spinning down assets is no fun.

Even after doing so, choices for care can still be limited. Individuals may “get what’s available, where its available,” with limited power to choose. Most will want to avoid this path, especially those with a surviving spouse who must live on after assets are spun down. There are provisions in Medicaid for some funds to remain with a surviving spouse, but the thresholds can be onerous.

Which Is Better, a Traditional or a Hybrid Policy?

As time goes by, I am less and less enamored with traditional long-term care insurance policies that expect premiums to be paid every year for a lifetime. Frequently, it seems, the older people get, the more fatigued they become with maintaining such policies. What a shame to face dropping or downsizing a policy after decades of payments because you became weary of or could no longer afford the premiums.

This will surely ruffle the feathers of a few advisers, but so be it. When suitable, I have come to believe that hybrid policies – either life insurance or annuity based – are the most preferable options for long-term care insurance. When paid for with an upfront single premium, such policies are as close as possible to “paying off” your risk and avoiding a lifetime of unending premiums. Add to this the not-insignificant detail that your heirs can get your money back if you don’t end up needing care, and these policies are hard to beat.

If you feel long-term care risk is something for which you need to solve, at least consider the possibility of assembling the funds – earn them, save them, allocate a portion of the after-tax sale of a home or business, use after-tax inheritance funds, or potentially roll over (i.e. 1035 exchange) unused cash value – only when suitable – from an old life policy or annuity, to help solve the problem.

It’s also worth noting, even if you have substantial assets, the hybrid approach still makes sense versus self-insuring your risk. This is because of the leverage of the insurance and the tax-favored treatment for covering the cost of care should it ever be required.

Saying all this, there is still no “one size fits all” solution for long-term care insurance. You’ll have to study the options, weigh the benefits, and decide what works best in your individual situation. An excellent additional resource is the National Association of Insurance Commissioners: A Shopper’s Guide to Long Term-Care Insurance.

It is available for free online at:

https://www.naic.org/documents/prod_serv_consumer_ltc_lp.pdf

Questions or comments? 

I can be reached at this link – contact Ted Stevenot.

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Rule 10: Set Your Own Retirement Date

Below is an excerpt from the book Downsize Sooner than Later – 18 Rules for Retirement Success available on Amazon.com.

On a bedrock level, retirement begins for anyone the day he or she becomes physically incapable of performing economically productive work. While this represents the far end of the retirement spectrum, it is important to pay attention to this fact. When the time eventually comes that you can no longer work – even if you want to – you must be ready.

Beyond a strict involuntary retirement, as alluded to above, there are several other potential retirement modes:

  • Voluntary Full Retirement: retired with full productive capacity intact.
  • Voluntary Partial Retirement: retired with full productive capacity intact, but only partially deployed (i.e. part-time work).
  • Involuntary Partial Retirement: retired with involuntarily reduced productive capacity (i.e. willing to work full-time but diminished physical ability to do so).
  • Involuntary Full Retirement: productive capacity fully depleted.

One conclusion to draw from this array is that – at least initially – the idea of retirement need not be a complete “on and off” switch. Depending on one’s circumstances, it may be favorable to transition into a partial mode of retirement and remain economically productive. Such a path can offer continued income, while simultaneously providing more time for enjoyable pursuits such as hobbies, travel, and time with grandchildren.

Partial retirement also opens the door to the continued growth of nest egg savings, reduced spending pressure on nest egg assets, increased social connections, and an overall boost in retirement security. We will be revisiting several of these benefits in later rules.

When Should You Retire?

Many people ask about the optimal time to begin retirement. The first part of answering this question is to understand the retirement system in which you are working. For some, the answer may be simply, “Retire on the date in which it no longer benefits you to continue working.” This can occur in certain retirement systems where benefits reach a maximum such that continuing work adds little additional value.

A friend of mine works in a system where, after a certain point, salaries and benefits essentially cap. As a result, he would make roughly as much choosing to retire as he would by continuing to work in his current job. It also happens that his occupation extracts a significant physical toll on his body. For him, retiring soon and switching to a “voluntary partial” work level in a less physically demanding industry may make sense.

Frequently, I recommend that people with above average health consider putting off the decision to begin Social Security benefits until age 70. Despite the political tumult kicked up in the media about the long-term prospects of Social Security, it remains a high-quality source of pooled income for retirees. Funded by beneficiaries, it pays benefits for the lifetime of the recipient, includes survivor benefits, and offers provisions to protect against inflation.

Sometimes, people have a hard time accepting age 70 as a potential retirement age. This stems in part from long-held conventional wisdom pointing to age 65 as the customary and expected time for retirement. Retiring later than 65 is viewed by many as somehow a disappointment, a loss, or a reflection of failure.

As we have already noted, be careful of conventional wisdom. In a simple and rather revealing thought experiment, take a moment to think of any older billionaire you can name. Nearly all are still working at least partially in endeavors they enjoy, regardless of their age and overall level of financial success.

What’s so special about age 65?

Have you ever wondered where the convention to retire at age 65 came from? How was this age chosen over others? How long has age 65 been popularly viewed as an optimal standard for retirement?

The original mass-market appeal for a standard retirement age dates back to the late 1800s.

  • The “Iron Chancellor” of Germany, Otto von Bismarck, is credited with advancing the idea of a social security system to offer benefits to the working class.
  • The target age for benefits adopted in the original German plan established in 1889 was age 70.
  • In 1916, 27 years later, the age was lowered to 65.

The Social Security Act was signed into law in the United States in August 1935. The decision to adopt age 65 as the target for benefits occurred through a combination of actuarial studies and surveys of the average ages used by existing retirement systems. At the time, “…roughly half of the 30 state pension systems used age 65 as the retirement age and half used age 70.”*

*Source: https://www.ssa.gov/history/age65.html

Since the early 1900s, a lot has changed.

Particularly revealing is to examine life expectancy at the time various target retirement ages were adopted. Statistics about life expectancy can be difficult to align with precision because they vary due to demographic factors such as gender, ethnicity, and country of origin. Here, however, are at least are a few ballpark approximations:

  • In 1891–1900, when the German plan began with a retirement age of 70, life expectancy from birth in Germany was roughly age 40.58 for a man and age 43.98 for a woman. (1)
  • In 1935, the Social Security Act specified a retirement age of 65. At the time, life expectancy from birth in the United States for a man was roughly age 59.42 and age 63.32 for a woman. (2)
  • In the United States, the “full benefit” retirement age for those born in 1955 is 66 years and 2 months. Life expectancy from birth in the U.S. today is roughly age 76.1 for a man and age 81.1 for a woman. (3)

Source (1): https://www.lifetable.de/cgi-bin/index.php
Source (2): https://www.cdc.gov/nchs/products/databriefs/db328.htm
Source (3): https://www.cdc.gov/nchs/data/nvsr/nvsr67/nvsr67_07-508.pdf

In the past, social insurance plans did not begin benefits until well after the average life expectancy from birth. 

Today they begin benefits well before the average life expectancy from birth.

Additionally, it is important to observe that life expectancy tends to increase based on higher attained age. This means the older you get, the longer you tend to live. This is so because as you age, you begin to bypass risks impacting mortality that are included in the “life expectancy from birth” averages. For example, when you are older, though you still face mortality risks related to your current age, you no longer face risk of death related to childhood diseases, uniquely youthful accidents, or death related to childbearing, which are included in the life expectancy from birth averages.

For persons reaching age 65 in the United States today, life expectancy now approaches age 83 for men and age 85.5 for women. These numbers are roughly 5–7 years longer than the average life expectancy from birth and 16–18 years longer than full-benefit starting dates for Social Security.

But it doesn’t end there.

Remember that these numbers are only averages – half will live even longer.

So, what does all this tell us?

First, when to retire is an individual choice and many factors are involved, including your health, finances, and your personal perspective. Don’t let conventional wisdom make you feel bad about choosing the retirement date that makes the most sense for you.

Second, retiring at age 65 is not a hard-and-fast rule. You can choose to follow this norm or walk right past it. Sometimes, you just need someone to tell you it’s OK to do so. For what it’s worth, I am happy to serve in that capacity.

For my part, I plan to delay Social Security benefits for as long as possible and to stay economically productive for as long as I can – more on that in the next rule.

For those who qualify, putting off Social Security benefits to age 70 can serve to significantly increase monthly lifetime income and overall financial security.

  • Delaying taking Social Security benefits – even by just a year or two – will increase your monthly benefits for the rest of your life.
  • Once the full benefit age transitions to age 67, a person can increase his or her benefits 24% as a result of delaying just three additional years (i.e. to age 70).
  • If you are the higher income earner in a couple, you have two lives for which to plan. Delaying benefits can mean increased survivor benefits for your spouse if he or she ends up outliving you.
  • In 2018, the maximum benefit for those delaying Social Security to age 70 was $3,698/month.

To learn more about what delaying Social Security benefits might mean for you and to access a retirement benefit estimator based on your actual earnings, visit the United States Social Security Administration website at: https://www.ssa.gov

Questions or comments? 

I can be reached at this link – contact Ted Stevenot.

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Rule 11: Stay Economically Productive

Below is an excerpt from the book Downsize Sooner than Later – 18 Rules for Retirement Success available on Amazon.com.

This rule expands upon the concept introduced in the last rule regarding the varying modes of retirement. – voluntary, partial voluntary, partial involuntary, and involuntary. What we observe from the retirement modes is that retirement is not necessarily a binary “all or nothing” decision.

What do you want most from retirement?

Do you want more freedom? Extra time? More say about what you will do with each day? More opportunity to do the things you truly enjoy? Time to travel? Time to volunteer? More time to spend with friends and family? Time for hobbies, recreation, reading, or other enjoyable pursuits?

You can surely have such things, but they do not necessarily presume or require that your economic productivity must drop to zero.

During working years, the most valuable asset most people have is their ability to earn an income. It is wise to proceed with caution before wholly discarding such a valuable resource in retirement.

Consider the story of Mary. Mary was a stay-at-home mom who relished volunteering at church on a part-time basis during her many years of raising a family. When she and her husband retired, they moved to an upscale area in a warmer climate. In time, she discovered a local church to her liking and resumed her long-enjoyed practice of volunteering.

As one might expect, given that Mary appreciated volunteering and without the demands of children to raise, her volunteer commitment began to expand.

Willingly, she took on many elements of running the church that customarily were the role of paid staff. In her well-to-do community, it would have been no trouble for the church to pay her a reasonable stipend for the performance of these services. However, she never thought to ask for this. Perhaps it seemed ignoble to do so. As such, she continued to offer more and more help for “free” as time went by.

Years later, she and her husband’s portfolio-based retirement income plan ran into trouble. Eventually, they were forced to downsize and move to an area far away from the church she had come to love and support so much as a retiree. As she was leaving, church members – particularly the pastor – were shocked. None had any suspicion of her financial difficulties. Yet, none could make up the lost time, undo the missing years of income, or repair the resulting damage.

Though Mary’s work possessed significant marketable value, it simply did not occur to her to consider being compensated for it. Had Mary made it a priority to more highly value her time and request compensation for that time, she may have been able to ease and perhaps even prevent some of her eventual financial difficulties.

There is no shame in asking to be compensated for doing valuable work.

This fact remains true, regardless of age. Yet, here again, we run up against conventional wisdom. Many say things like, “When I retire, I want to spend time volunteering.” This is a worthy goal. Like the wish to leave a legacy for children and grandchildren or to a favored charity. However, such desires must not supersede the necessity of maintaining one’s own personal and financial wellbeing.

Such circumstances can be likened to a flight attendant’s forewarning to secure your own oxygen mask before assisting children or others. 

If you let yourself pass out, not only will you be unavailable to help others, you may end up needing help yourself.

Consider also the story of Juan Carlos. Juan Carlos was a university professor who received a lifetime pension upon retirement. Many teachers and other public servants are exempt from individual and employer contributions to Social Security. This means they must rely on state or government employee-based pension systems to be their mainstays during retirement.

Juan Carlos, throughout his teaching career, developed a part-time consulting business related to his professorship in engineering. When he eventually retired, he continued this consulting practice. Though he could have devoted full-time attention to the business, he did not choose to do so. Instead, he used the extra time and income to fund travel and spending more time with family.

In the many years since his retirement from teaching, Juan Carlos’ side business has continued to grow. Today, it provides him with significantly more income than even his pension. He still uses this “extra” money for travel and to afford more time with friends and family. He also sets aside funds for a substantial legacy to leave for his children and grandchildren.

Both Mary and Juan Carlos developed marketable skills throughout their lifetimes. One chose to be recompensed for this value during retirement, while the other missed the opportunity.

In truth, just about everyone possesses some number of skills that are of marketable value.

The key to unlocking this value is to look for and become aware of these skills. Think back on your life. Beyond opportunities based on your prior career, consider activities that you love and enjoy, such as hobbies. This may include things like painting, reading, sewing, fishing, golfing, hunting, or restoring old cars. Almost any area of interest, from providing daycare for children – and, increasingly, daycare for adults – to giving folks a lift from time to time, to personal organization, to decorating, to pet sitting, etc. can be conceived of in an economically productive form.

• What if during retirement you could find fulfillment along with financial reward?

• What if you could build relationships while continuing to build your savings?

• What if you could strengthen your mental acuity while helping to ensure your overall security?

Even on a part-time basis, such opportunities are well within reach. The key is to establish a mindset that will reveal those opportunities. With the proper perspective, you can achieve the best of both worlds.

But what if you just don’t want to work?

I know people – whom I care for and respect – who say when they retire, they just want to be done. No more work. No more job. Not even part-time. Not even doing work they might “love.” Complete shutdown. I have even heard this from some planning to retire at younger ages, such as in their early 60s. Sometimes, I hear this said, regardless of my prior and impassioned attempts to eloquently articulate the benefits of the contrary.

I must admit, I have a hard time understanding this perspective.

I know individuals who have chosen the shutdown mode in retirement. I am suspicious of this course. For the most part, I wouldn’t change places with any of those I know who saw it through. It’s almost as if they are sitting around waiting for the end. One has turned her consciousness inward. She frets and complains constantly about her health and financial issues. It as is if her full-time job is rushing back and forth between doctor’s offices, and this has gone on for nearly two decades. Another I know has prematurely lost physical capacity due to too much time sitting in a chair. People say, “Keep your stride!” Well, he has lost his. Yet another suffers from a paralyzing predisposition to expand time. Having all day to do even the smallest things, the smallest things now take him all day to do.

Business philosopher Jim Rohn once postulated that “what most messes with the mind” is doing or being less than all you can become. 

Once, while walking along the beach, I observed a bottle-nosed dolphin swimming through the nearby waves. She was obviously old, and you could see nicks and cuts along her upper back and dorsal fin area. It occurred to me: there are no banks in the world of dolphins. No retirement funds. No pensions. No insurance companies. She must work to earn a living until the day she dies. A noble and majestic creature, yet she is compelled to show up for the fight every day until her last. Are we so different? Just because we may be able to sit aside idly, does it mean we should?

Everyone must decide.

For my part, at least, for as long as I can, I intend to stay engaged and spend at least some ongoing effort to strive, to grow, to achieve goals, and to build. When my capacity eventually depletes, as it someday surely will, I hope I can take some comfort in knowing I continued to fight the good fight.

Questions or comments? 

I can be reached at this link – contact Ted Stevenot.

Posted on

Rule 12: Clean out Your Glove Compartment

Below is an excerpt from the book Downsize Sooner than Later – 18 Rules for Retirement Success available on Amazon.com.

Imagine you go to your car and look in the glove compartment. Beyond a multi-tool, tire pressure gauge, owner’s manual, proof of insurance, first aid kit, and vehicle registration, what else really belongs there? It is a limited space, so you must decide.

But, have you decided?

When we look at what we have allowed to accumulate in this limited space, most of us observe a collection of clutter – gum wrappers, old receipts, obsolete cell phone chargers, barely functioning pens, pencils, expired warranty papers, an empty bottle of ibuprofen, expired sunscreen, and melty lip balm.

The glove compartment is an apt metaphor for life.

Try this exercise:

1. Take a box and remove everything from your primary car’s glove compartment.
2. Bring it inside and lay it all out on a table.
3. Decide what belongs and should go back in, and what doesn’t belong and should be put somewhere else or tossed.
4. If there are things missing – things that should be there but are not – a small first aid kit, multi-tool, proof of insurance, registration papers, etc., assemble these items and add them now. Take all the items you have decided that belong in your glove compartment and put them back in it in an organized fashion.
5. Now – and here’s the purpose of the whole exercise – stop and ask yourself how you feel.

If you’re like most people, the answer is: you feel better, happier, less burdened, more settled, more organized, more together.

If so, why? What difference does it make that clutter had accumulated in your glove compartment, and how does cleaning up that clutter elicit such positive feelings? What is the cause of this? Why are such feelings so common at the end of this exercise?

Some would suggest that the answer is you have reduced the volume of your overall “stuff” and, therefore, the prime lesson to be learned is, “Less stuff makes you feel better.”

Maybe that’s part of the reason, but I’m not so sure. Having less may make you feel better, but the degree of volume does not seem to explain what’s happening entirely. By extension, what if you got rid of everything? An empty glove compartment goes too far. Get pulled over and you will at least want your registration and proof of insurance. It doesn’t make sense that removing such essential items for the pure sake of achieving less will really make you happier.

So, if it’s not a question of the volume of stuff, what’s going on?

Why the good feelings?

In my opinion, the best answer seems to be related to establishing “order over chaos.” It begins with the fact that we are born into a world of difficulty and uncertainty. Most of our lives are spent improving our skills and ability to establish and maintain livable order in the face of preexisting chaos.

A few examples:

  • We raise children to be healthy and well socialized, so they will be stronger and better equipped to face the diverse physical and emotional demands of life. We want them to acquire the ability to endure, learn, adapt, and thrive in the face of whatever the world may throw in their direction. By all accounts, this is an effort to instill order over chaos.
  • As individuals, we sacrifice and save for tomorrow. We attempt to build a buffer to protect ourselves and those we love from the inherent dangers and unknowns that may occur in the future. This, again, is an effort to instill a measure of order over chaos.
  • We utilize norms of culture, society, law, and belief to imprint predictability and order on a constantly changing and frequently dangerous world. These exertions are all efforts to manifest habitable order in the face of preexisting and continuing uncertainty and chaos.

Do find yourself cheering for the underdog when you watch sports?

The innate call to do so seems to stem at least in part from an archetypal human desire for order over chaos. The team that’s behind is in disarray. They face odds that appear beyond their control and will be consumed if they cannot find a way to effectively respond. When they do prevail and win, people love it! This is because it is the underlying hope and desire of all people to do the same as they face existential and unrelenting chaos in their own lives each day.

Unlikely as it may seem, the complete drama of this reality is observable in something as simple as your glove compartment. Before you clean it out, it’s in chaos. You must first notice this state and give it your attention. From there, you must act to reduce the level of chaos and increase the level of order. After acting, you experience the satisfaction of having achieved greater order. Did you end up putting some things “away” in places where they better belong? Likely. Did you end up throwing some stuff out? Probably. But it’s not the summated state of “less” that has the greatest impact. It’s the underlying order.

Widening this concept is the fact that few things exist in a vacuum. As we discussed in earlier rules, a high-maintenance possession can create a domino effect of generating chaos. Things wear out and break down. There are payments, upkeep, and repairs. All this requires time, money, attention, and energy. If, suddenly, a high-maintenance item disappears, a ripple effect occurs. It’s not the reduction of the “stuff” per se. It’s the reduction in chaos that surrounds the stuff.

One of the many memorable quotes my son John shared with me was, “Dad, how you do anything is how you do everything.”

If my glove compartment is a mess, then what are the chances my trunk is a mess, my garage is a mess, underneath my kitchen sink is a mess, my closets are a mess, my cabinets are a mess, my drawers are a mess, my basement is a mess, and so on…?

In general, increased order yields increased feelings of peace and happiness. Of course, nothing stays fixed forever. Things fall apart even with our best efforts, and sometimes, it’s a wonder anything keeps working at all. But since we have limited time and limited space, it makes sense to ask: What are we filling our limited time and space with? Are we accumulating mindless clutter or are we living deliberately and intentionally?

A few “glove compartments” worth cleaning out:

  • What are you doing with your time? Your mornings, your evenings, your weekends? Do you waste them on sub-optimal activities such as watching mindless TV or reading psychologically damaging news?
  • Is your schedule a mess? Have you said “yes” to things that aren’t really a priority? Have you said “no” to things that should be a priority?
  • Is your health a mess? Do you eat right and have a routine for exercise? Do you have a snack drawer full of junk food versus convenient things to eat that are healthy?
  • Do you attend regular check-ups with a primary care physician, dentist, and eye doctor? Or do you wait for something to “break” and react to your health, rather than proactively caring for it?
  • Are your relationships a mess? Do you set aside time for children, spouse, and friends? Or do you only “catch up when you can” and find yourself losing valued connections?
  • Is your stuff a mess? Do you keep a bunch of possessions you don’t use, want, or love? Who will end up sorting through such items when you are gone – a grieving spouse or children? Is putting the burden of cleaning things up on them the most responsible and loving choice?
  • Are your finances a mess? Do you have a plan you can be proud of? Or are your finances a junk drawer filled with random debts, obligations, bills, insurance, old retirement accounts, and unaffiliated IRAs? Do your loved ones even have a list or means to locate your policies and accounts?
  •  Is your estate a mess? Do you have a will? Have you designated appropriate and updated beneficiaries on your insurance and retirement accounts? What about a healthcare power of attorney or a living will? Have you made your wishes known about what to do if something happens to you? Or will you leave loved ones guessing about what you want at an already difficult time?
  • Are your usernames and passwords a mess? If you were gone, would loved ones be able to access your phone, important accounts, computers, email, documents, and pictures?

Without deliberate attention, these things can accumulate disorder just like an ignored glove compartment. Once an area of chaos is identified, simply ask,

  • How can you arrange your affairs in a better way?
  • What belongs?
  • What needs to be removed?
  • What needs to be added?

After taking sensible action to restore and impress order, a surge of positive feelings is the most common and immediate result. Doing so opens the door to increased predictability, increased livability, and increased energy and space for the things that matter most.

Questions or comments? 

I can be reached at this link – contact Ted Stevenot.

Posted on

Rule 13: Eat Less Grass

Below is an excerpt from the book Downsize Sooner than Later – 18 Rules for Retirement Success available on Amazon.com.

Does it seem unusual for someone in their mid-50s to have six-pack abs?

As I write this, that is my current condition. Years ago, I would not have imagined this as likely. I remember thinking, when I first began to get wider around the middle in my 40s, “Well, I guess that’s just the way it is.” Have you ever had someone walk by you and bump into your stomach? That was me. I wasn’t technically overweight, but I was developing a typical middle-aged middle-section.

I have generally always been a person who exercised at least some. Currently, I have a routine that gets me to the gym four to five days a week for roughly 20- 25 minutes of moderate exercise per session. As for the abs, while exercise played a part, it was really a change in diet that made the difference. I know this to be true because for a long while I exercised, but did not have the abs. And my exercise routine was about the same before and after the six-pack so enchantingly appeared. One day, while brushing my teeth and not wearing a shirt, I happened to look in the mirror and noticed: “What the hell?”

The knowledge I acquired to make the change was stumbled upon by accident.

The root cause stemmed from a different approach to eating that was relatively easy to put in place and has been similarly easy to maintain. I stay on track about 85–90% of the time and don’t feel significantly restricted. This means I still have ice cream and cheesecake on occasion. But for the rest of the time – roughly 17 out of 20 meals in an average week – I have a routine and an “environment” for eating that keeps me on track.

Dispensing information about dieting is difficult because there have been so many fad diets over the years. Most seem great at the time but eventually fade from view. Compounding this challenge is the fact that people are different, and different approaches work better for some than they do for others. Additionally, sometimes people have legitimate medical issues such as autoimmune disorders or allergies that can affect how and what they can eat healthfully.

Understanding that diet is a tough space and can be bewildering, I would like to share with you one small idea related to dieting that I have found to be most useful. This idea has worked well for me and my wife for several years. Feel free to take it or leave it. If it works for you, great. If not, perhaps it will inspire you to seek out a diet that would work for you, if desired.

It started a few years ago when my wife came across a book in a dollar store called, Your Personal Paleo Code, by Chris Kresser. The title has since been changed to, The Paleo Cure. I had not heard of Chris before, but flipping through the pages, my first impression was, “Wow! Whoever this guy is, he worked his tail off to write this book!” So, I thought, for a dollar, I’d give it a whirl.

It’s funny how some of the most valuable things we discover in life are often stumbled upon. More than once, I have, by accident or luck, found something that later proved to be life changing. I suppose the lesson here is to always remain curious and on the lookout for hidden value.

I brought the book home and started reading it. Perhaps it was an example of the “teacher appears when the student is ready,” but it made a huge impact on me. I had heard of ancestral or “Paleo” dieting before in passing, but this was the first time I heard it presented as an evidence-based force-multiplier for improving diet and general health. One of the biggest takeaways I got from the book was the concept of “nutrient density” as relates to food.

The Magic of Nutrient Density

We hear endlessly about “junk food” and “empty calories,” but I never stopped to think what those words really mean. In the modern era of low sugar diets and “counting carbs,” it seemed all that mattered about most food was the “macro” or total calorie count. “Junk food” meant high sugar and/or high fat which, in turn, meant high calories. Conventional wisdom said that for a better diet, avoid such foods or consume them in moderation.

It turns out there is more to the story.

It begins with the fact that our bodies and digestive systems are monumentally complex. The digestive system consists of a vast universe of “microbiota” with an almost immeasurable number of agents working in concert to sustain our lives. Humans evolved these systems over millions of years, living as hunter gatherers and eating a diverse array of naturally occurring foods.

With the onset of the agricultural revolution, an unintended consequence was diets becoming substantially less diverse. This happened because only a relatively small number of plants and animals proved to be domesticable and cultivation friendly.* Some of these foods worked out well for our diets, while others were not always the best in terms of nutrient quality or digestibility.

*An excellent and fascinating resource that discusses the story of food domestication is Jared Diamond’s landmark book, Guns, Germs and Steel.

We arrive at today, dependent on diets with comparatively fewer food choices and with the widespread adoption of many foods – such as those that are grass-based like corn, rice, wheat, and refined sugar – that often conflict with our anciently evolved digestive systems.

So, what does it all mean?

Eat Food Your Body Will Recognize

Feeling hungry? This is your amazing body – literally developed over millions and millions of years – telling you it needs something. The question is: what? I know people who get very focused cravings for particular food items. Maybe it’s just me, but I have never experienced hunger with such focus. Instead, I seem to just get broadly hungry without much tilt toward specific foods.

Being “hungry” is, as it turns out, a generalized condition. Your body could be looking for some specific nutrient or fuel that you may not even be aware of (e.g. like sailors suffering from scurvy and having no clue what’s going on). One way to think of it is to imagine the body as having a limited vocabulary. It might need calcium, vitamin B12, citric acid, or some other nutrient, but because your body can’t directly ask for it, it just says, “I’m hungry!”

In the modern world, the cycle goes something like this:

1. Needing some combination of calories and nutrients, the body says, “I’m hungry!”
2. In response, I feed it high-calorie, low-nutrient junk food.
3. My stomach, now filled with calories but limited nutrients, provides me temporary relief. But it is a false summit.
4. Soon, my body, still lacking the nutrients it wanted in the first place and despite the fact it recently got a load of extra calories, repeats, “I’m hungry!”
5. Return to “2” above and repeat.

In such a cycle, I end up with an excess of calories and a deficiency in nutrients (i.e. overweight and less healthy). In truth, the body’s vocabulary is much more expansive. Yearning for what it wants, it may “speak” by saying things like: headaches, joint aches, depression, sleeplessness, digestive issues, cramping, pain, gas, various types of inflammation, and more.

Selecting a diet with diverse and nutrient-dense foods can alter the steps above to look more like this:

1. Needing some combination of calories and nutrients, the body says, “I’m hungry!”
2. Instead of giving it junk, I feed it nutrient-dense, real, whole, actual foods.
3. I get the calories I need and more of the nutrients my body wants. This gives me improved nourishment, greater energy, and relief from feeling hungry as often.
4. In time, I average toward a more stable diet, better nutrition, optimal body weight, and improved overall health.

Again, the body and digestive system are exceedingly complex. Knowing or attempting to predict what micronutrient the body might want at any time would be extremely difficult. By selecting in favor of more diverse and nutrient dense foods – as our ancient ancestors did – I increase the odds of giving my body the fuel it needs.

Below are some examples of foods I regularly eat.

  • Fruits (mandarins, grapes, strawberries, blueberries, kiwis, bananas, blackberries, plums, grapes, apples, cherries, occasionally melon).
  • Nuts (walnuts, pistachios, almonds).
  • Legit dark chocolate (60%+ cacao – small wrapped 3–4 per day, 8–12 dark chocolate chips).
  • Eggs, beef, chicken, pork, salmon, trout, tilapia, sardines, occasionally tuna.
  • Vegetables (avocados, artichokes, brussels sprouts, asparagus, cauliflower, broccoli).
  • Sweet potatoes (a mainstay and prime source of “good carbs”).
  • Carrots and celery with homemade ranch dip.
  • Cheese (occasionally, dairy for those who can tolerate it).
  • Coffee.
  • Almond milk.
  • Ice water with lemon.
  • Red wine (one glass per day, when indulged).

Note the commonality in the list above that just about any ancient ancestors would recognize most of these foods (i.e. less the almond milk, chocolate, coffee, and red wine). However, they would not recognize a loaf of bread, a bag of corn chips, candy bar, or a can of soda. Hence the epithets “ancestral” or “Paleo” (i.e. stone-age) eating.

Below are some examples of foods I try to avoid.

Note the two important commonalities of many of the foods avoided: grass-based and legume-based.

  1. Grass-based foods. Wheat, corn, rice, and sugar cane are all grass plants. It seems hard to imagine today, but for millions of years before the agricultural revolution – only around 10,000 years ago to the present – our ancient ancestors didn’t really eat much grass or foods derived from grass plants. For perspective, “humans” separated from chimpanzees around 7,000,000 years ago. Our more direct relatives, like homo erectus (upright man), first appeared about 2.5 million years ago. Our specific species, homo sapiens (wise man), has been around roughly 250,000 years. Animals that thrive on grass are called “ruminants” and have special digestive systems evolved to accommodate such eating. Humans are not ruminants. Grass-based foods, as we know them today, take on a variety of forms which are sweet, flavorful, and calorie dense. They are also inexpensive to produce and easy to ship and store. Unfortunately, however, they are light on nutrients and frequently misalign with our ancient digestive systems.

  2. Legumes and legume-based oils. Legumes are plants like beans, peas, peanuts, and lentils. Many of the cooking oils common today are derived from oils extracted from legumes. Again, wonderfully flavorful, cheap to produce, easy to store, and filled with calories, such foods and their derivatives often run afoul of our long-evolved digestive systems.

While I do eat many of the food items listed below on occasion, I try not to subsist on them as a major part of my diet. They are OK for the three meals a week or as an occasional side, but these are not foods I rely on to provide a significant source of nutrition.

Bread. (Wheat is a type of grass. Baked flour, while delicious and mouthwatering, is still essentially processed grass. If you must eat bread, bread made from almond flour or other nut flour may be much more recognizable to the body.)

  • Peas, beans, string beans, cut beans, lentils, baked beans (legumes).
  • Cereal (wheat-based, processed grass).
  • Soda (high-fructose corn syrup is highly refined corn – another type of grass), cane sugar (saccharum officinarum is perennial grass).
  • Cookies made with wheat flour and refined sugar (grass and grass).
  • Pasta (better than many other kinds of breads, but still bread).
  • Chips, cookies, pretzels, convenient “bagged” snacks (grass, grass, and more grass).
  • Fruit juice (fruit juices can be squeezed or juiced from a real fruit – but even then, you’re probably better off just eating the fruit).

It has been said: “People are hard to change, but environments are easy to change.”

When my wife and I wanted to change our eating habits, one of the biggest areas of impact we discovered was changing our food environment at home. We started with snacks. We got rid of all the snack foods we wanted to avoid and replaced them with fruits, nuts, and easy-to-grab veggies. From there, we did the same with bigger meals. Eventually, we solved for breakfasts, lunches, and dinners. We did not calorie count or starve ourselves through portion control. When hungry, if it was on the “good” list, we ate as much as we wanted.

In time, our bodies picked up on the micronutrients we had been missing and our appetites began to curb. No more ten o’clock at night, “OMG, I’m freaking starving!” followed by crushing two bowls of cereal before bed. It wasn’t a question of willpower; the intense crashes of hunger just stopped happening. Personally, I began to feel better physically with fewer aches and pains. Additionally, my general level of anxiety and propensity for over-worrying and stress dropped like a rock.

From there, we continued to look for more interesting ways to prepare the “real” food we were eating more of. We collected cookbooks and expanded our list of recipes. Now that we know what to eat and how to prepare it well, staying on track is easy.

Can you imagine?

  • Baked wild salmon with garlic and herbs, served with asparagus, diced sweet potatoes, and a glass of red wine followed by a dessert of strawberries smothered in dark chocolate.
  • Grilled filet mignon with sautéed mushrooms, steamed artichoke, baked sweet potato, Mediterranean side-salad sprinkled with feta cheese, followed by a small bowl of ice cream.
  • Chicken fajita with caramelized onions and green peppers served over steamed cauliflower rice and dark chocolate-covered almonds for dessert.

Does this really seem restrictive?

You be the judge.

But wait, didn’t our ancient ancestors live comparatively short lives?

Some people point to reduced life expectancy among our long-ago ancestors as a reason to avoid eating more in alignment with the way they ate. But this is a misreading of the facts. People had lower “average” life expectancy, due to the combination of untreatable infections, unrecoverable diseases, and extremely high infant mortality. Such factors pulled the overall numbers down drastically. By contrast, coupling modern medicine with ancestral eating opens the door to the best of both worlds.

As with any major life alteration, making positive changes in something as important as diet requires ongoing study and diligence. For my part, I am glad to be on the path. As with any system for healthful eating, no one size fits all. Consult with your physician or qualified health practitioner to be sure any diet you choose makes sense for your individual situation.

Questions or comments? 

I can be reached at this link – contact Ted Stevenot.

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Rule 14: Move Your Whole Body

Below is an excerpt from the book Downsize Sooner than Later – 18 Rules for Retirement Success available on Amazon.com.

With this rule, we enter a second challenging topical space like diet, due to its shifting, diverse, and volatile nature. This is the subject of exercise. Here again, my goal is to offer you the highest and most concentrated value possible. While, admittedly, I am an amateur on this subject, my reflections are based on years of study, experience, and observation. Just like with diets – no one size fits all. As always, consult with a physician or other qualified health professional before beginning any new exercise plan to be sure it is safe for you.

Here, I want to suggest a methodology for exercise that is both convenient and enduring. The goal is to accomplish:

  • More results with less time and effort.
  • The best version of you – whatever that is – not some conventional stereotype that may be a mismatch.
  • To exercise in a way that is sustainable. This means not hurting yourself and being forced to stop exercising.
  • To promote range of motion so that for as long as possible you can maintain your capacity to move and physically engage in life.

As mentioned in the last rule, I am a person who has exercised most of my life. I remember I used to do sit-ups while watching TV after middle-school in the late afternoons. At one point in my early teens, I could readily do a thousand sit-ups in a single session and over 130 sit-ups in under two minutes.

Those were the days…

Over the decades, just like with diets, I have seen exercise fads come and go. In recent years, my son John became deeply involved with an exercise system called CrossFitⓇ. John was an enthusiast and a serious student of health and exercise. I think he wanted me to get involved with CrossFitⓇ, but it never really came about. He joined me at my gym several times, though, and tweaked my usual routine with techniques he had learned.

One important addition he suggested was a movement known as a “thruster.” This is a type of squat exercise accompanied by light dumbbells held in each hand. In the motion, you bend your knees into squatting position with the dumbbells held at chest height. From there, the motion completes in a standing position and with arms fully extended overhead.

It is a simple exercise and moves the whole body. He added a twist by pairing this activity with another exercise. The second exercise was a series of machine assisted pull-ups. Altogether, and against the clock, the sets of exercises unfolded like this:

  1. 21 thrusters.
  2. 21 pull-ups.
  3. 15 thrusters.
  4. 15 pull-ups.
  5. 9 thrusters.
  6. 9 pull-ups.

CrossFitⓇ devotees will recognize this group of motions as like a workout called “Fran.” It is an old-fashioned butt-whooping to get through without stopping the first few times.

So, why tell this story?

It turns out, hidden in all this are two secrets to effective exercise that make a huge difference in the efficiency and overall value extracted from exercise.

Many types of exercise employ these secrets in one way or another. A few examples are burpees, aerobic-boxing, parkours, dance and ballet based exercise programs, and as mentioned, CrossFitⓇ.

The two secrets are:

1. Move your whole body – or most of it.

“Whole” or full-body exercise is any activity that requires coordinated motion from the knees to the shoulders. Such exercise requires diverse muscle groups to work together and, when done properly, can provide increased beneficial impact in reduced time. Whole body exercise promotes a healthy range of motion, muscle and tendon strength, and engages the lymph system, which acts as a type of pumpless filter for the body.

2. Where possible, “pair” or “weave” different exercises together in the same set.

In the example above, pull-ups – which engage lats, biceps, and back – are paired with thrusters – which engage legs, core, and shoulders. While there is some muscle overlap, these are very different exercises. It turns out, our bodies seem to like movements that occur in a successive, diverse, and coordinated range. Exercise “pairing” helps facilitate this diversity of motion. Some simple examples of pairing include push-ups with sit-ups, pull-ups with burpees, leg lifts with air squats, jumping rope and punching a heavy bag, etc.

I have searched for an origin story behind the rise of exercise systems that combine whole body motions with varying degrees of pairing. The closest I can find is in the forerunning history of parkour. Parkour originates from the French phrase parcours du combattant which translates to “obstacle course.”

French naval officer Georges Hebert, before World War I, conceived a system to promote athletic skill based on tribes he had observed in Africa. Hebert noted, “Their bodies were splendid, flexible, nimble, skillful, enduring, and resistant but yet they had no other tutor in gymnastics but their lives in nature.”(1)

The obstacle course training Hebert and subsequent others developed under the umbrella of parcours brings together a combined series of full body motion (e.g. running, vaulting, jumping, climbing, etc.) and pits these movements against the clock.

(1) https://en.wikipedia.org/wiki/Parkour

One could view many of the popular modern exercise systems as “parkour in place.” Sans the obstacle course.

Many such systems are enhanced by the addition of resistance equipment such as barbells, kettle bells, bungee cords, heavy ropes, pull-up bars, and other free weights. If you have ever run a traditional parkour trail (not the over-the-top acrobatic borderline insane viral video forms of parkour), you will know exactly what I am talking about. It is the mix of motions that hit you. All those body parts being called upon to respond make for a phenomenal overall workout.

I can remember years ago doing traditional workouts with weights at the gym, before adding the mix of full-body routines. The weekend would come, and I would have to do some demanding chores like heavy yard work or splitting wood. Afterward, I’d be sore for days. I remember thinking, “I thought I was supposed to be in good shape. What’s going on?” But since adding the mix of whole-body motions to my routine, I am now much better prepared to engage in such weekend activity without feeling like I have been thrown off a building in subsequent days.

If this all sounds difficult or extreme, it doesn’t have to be.

Consider the following list of motions that use either most or a substantial degree of full body engagement. Many are not traditional bodybuilding exercises. The point isn’t to build beach muscles – though you can still do that if you want – but rather to maintain range of motion and sustain general health. When weights are involved, these exercises favor lower, safer weight loads with higher repetitions (for example, 8–12 movements per set x 3 sets).

  • Walking, jogging, running.
  • Seated row.
  • Elliptical machine.
  • Stair machine.
  • Bike riding.
  • Sit-ups.
  • Crunches.
  • Leg-lifts.
  • Push-ups (more than just a chest workout, also a planking exercise).
  • Chin-ups (machine assisted).
  • Pull-ups (machine assisted).
  • Squat.
  • Deadlift.
  • Burpees. 
  • Jump rope.
  • Wall balls.
  • Air squats.
  • Thrusters.

In my experience, a variation of three to four of these motions in every workout session at moderate levels does the trick. This equates to four to five workouts per week of approximately 20–25 minutes in duration. No big deal. Supplementing these workouts by increasing the number of times you stand daily and by achieving manageable goal for tracking “daily steps” adds icing to the cake.

The hardest thing.

When John and I used to do our podcast together, one of the things we said all the time was that the hardest thing about doing anything was starting. From there, the key is to establish a routine. Do a little each day. Celebrate that you completed your routine. Simple. Light. Systematic. Take your time. This is where enduring results come from. Not from massive exhausting bursts (often injurious and dangerous, when it comes to exercise), but in steady consistent steps.

On days when I don’t feel like going to the gym, I think, “Just get there and do one thruster.” Of course, when I get there, I never do just one. All I really needed was the motivation to get through the door. Former Navy SEAL commander, author, business, and life coach Jocko Willink once commented on the importance of simply getting to the gym: “When you get there, what are you going to do? Lay on the floor?”

He is exactly right. Get there. Take the first step, and the subsequent steps will follow.
One thing I also do that helps is listen to podcasts and audiobooks while at the gym. In this way, I accomplish two major objectives at once – a workout for my body and a workout for my mind. Just like the body, the mind takes routine care and maintenance to stay in shape.

Caring for your mind is the topic of our next rule.

Questions or comments? 

I can be reached at this link – contact Ted Stevenot.