What If Your Retirement Home Was a Cruise Ship?

What If Your Retirement Home Was a Cruise Ship?

I’m writing this from a cruise ship, and it got me thinking about retirement.

We spend so much time planning where we’re going to live in retirement, how big our house will be, what state we’ll move to, and how much money we’ll need to support our lifestyle.

But what if retirement didn’t have to look like that?

What if, instead of owning a large home with a mortgage, property taxes, insurance, utilities, maintenance, landscaping and everything else that comes with it, you could live on a cruise ship for part—or even most—of the year?

Depending on the cruise, the math can actually be surprisingly interesting.

Your cruise fare can bundle your housing, food, entertainment, transportation between destinations and a long list of activities into one expense. Obviously, cruises aren’t automatically cheaper than owning a home, and there are plenty of additional costs to consider. But for someone who doesn’t need a permanent home base, it’s an interesting retirement-planning exercise.

And that’s really the point.

Retirement planning isn’t just about figuring out how much money you need. It’s about figuring out what you want your life to look like.

Don’t Retire Into a Vacuum

One of the biggest mistakes I see people make is treating retirement as the finish line.

They spend 30 or 40 years working toward retirement, only to reach it and realize they never actually figured out what they were retiring to.

Work provides structure.

It gives you somewhere to go, people to interact with, goals to accomplish and a reason to get out of bed in the morning.

When that disappears, you need to replace it.

That’s why I think retirement planning should include more than investment accounts, Social Security and tax planning.

It should include life planning.

What are you going to do on a Tuesday morning?

Who are you going to spend time with?

What hobbies will you pursue?

Where will you travel?

What new things will you learn?

What experiences have you been putting off?

Don’t Wait Until You’re 75 to Start Living

There’s another important lesson I’ve been thinking about while on this cruise:

Don’t assume you’ll have unlimited time later.

It’s easy to tell yourself, “We’ll travel when we retire.”

But retirement isn’t a guarantee of unlimited energy, mobility or health.

You don’t know exactly how you’ll feel at 65, 70 or 80.

That’s why I think people should start building the retirement lifestyle they want before they retire.

Take the trip.

Try the hobby.

Learn to play golf.

Take the cooking class.

Buy the camper.

Go on the cruise.

Visit the places you’ve always talked about visiting.

You don’t have to wait until you have absolutely nothing else to do.

Your Retirement Plan Should Evolve

Maybe you retire at 62 and spend several years traveling.

Then you decide you want a home base.

Maybe you spend winters somewhere warm and summers somewhere else.

Maybe you sell your house and downsize.

Maybe you live abroad for a few months every year.

Maybe you discover that you love cruising and decide to spend several months a year at sea.

The important thing is having the financial flexibility to make those decisions.

That’s where good financial planning comes in.

Instead of asking, “How much money do I need to retire?”, I think a better question is:

“What do I want my retirement to look like, and what will it cost to live that life?”

Those are two very different questions.

Retirement Is About More Than Money

A successful retirement isn’t necessarily the person with the biggest investment account.

It’s the person who uses their resources to create a life they actually enjoy.

Money is a tool.

The goal isn’t to die with the most money possible. The goal is to use your money wisely enough that you can enjoy your life while still protecting your future.

So while I’m sitting here on a cruise ship, watching the ocean go by, I’m reminded of something I tell clients all the time:

Don’t just plan for retirement. Plan for what you’re going to do with it.

Because someday, you may discover that the best retirement plan isn’t the house you’ve spent 30 years paying for.

It might be a cruise ship.

Click here to schedule a meeting — I’m here to help you take the next step toward financial freedom.

Colin Symons, CIO Lloyd Financial Group

It always comes up-- why does the stock market celebrate bad news? For instance, the jobs report on Friday showed negative job growth and the market saw stocks and bonds both have a great day. Why does the stock market hate you?

Au contarire, the market doesn’t care about you, pathetic mortal. It does, however, care a great deal about interest rates. A weak jobs report signals that the Federal Reserve is less likely to hike, going forward. Thus, the odds of a hike in September went from 67% to 44%. That means interest rates are less likely to be a brake on the economy, so companies and individuals can keep transacting relatively more freely.

It’s worth noting that markets want “goldilocks” numbers, not too bad and not too good. The negative 23K number was still within the range of expectations. If we’d seen something like negative 100K jobs, the reaction may have been quite different, because the narrative would have shifted from the Fed remaining accommodative to recession fear, where corporate earnings are coming down. That could have been negative.

You also have the current nuance of the immigration situation. Like it or not, we have people leaving the country. This is a depressant on payrolls, and that makes lower job numbers more acceptable. While normally, a negative payroll number could cause some alarm, it’s less surprising, here. For instance, the unemployment rate went down from 4.2% to 4.1% despite the negative number, as the workforce shrank.

From here, we’d just like to see more Goldilocks numbers, not too hot, not too cold. Recession risk is largely seen as pretty low, but if we continue to see soft numbers, that will be more of a concern. Overall, the picture still looks pretty good. For instance, the admittedly volatile Atlanta Fed GDPNow estimate for the third quarter is 5.8%. That’s far from a recession, so weak numbers can likely be tolerated for a while.

We do need to continually keep track of economic data, however. For instance, Wednesday’s CPI report will be watched closely. The last report was very friendly, with negative growth, but what if inflation surges back? That could raise stagflation fears, hot inflation with good economic growth. We could also see more negative inflation, which could raise recession fears. Again, Goldilocks is what we want. As it currently stands, the Cleveland Fed expects Goldilocks, at 0.1% m/m growth.

So, no, the market doesn’t wish you poorly, it just wants the Fed to stay friendly and not hike rates. It also wants the economy to hold up reasonably well, so profit growth remains likely. That’s why the market loves Goldilocks data and why sometimes the market reacts strongly to very good or very bad data.

Right now, the Iran war and rate fear have caused some damage. Goldilocks numbers like we saw on Friday can heal some of that damage. The friendly jobs numbers sunk the dollar and rates, two areas that have been hurting the most. To the extent we can keep Goldilocks going, the market party can continue.

In particular, rate fears have hit growth and low-quality areas. Friday’s benign numbers up the odds that money can return to those areas, which is what we saw on Friday. I’d like to think that can continue, but we’ll see what happens. I don’t expect much excitement in rates, but that’s the place to watch to see if we need to get worried.

Nonfarm payrolls were -23K vs. exp. 80K, with the Unemployment Rate at 4.1% from 4.2%. Average Hourly Earnings growth also shrunk to 0.1% m/m vs. prev. 0.3%. That sharply sunk rates and the dollar. Seems like a lot of the losses were government jobs.

The yen is weakening fairly aggressively as the intervention effect fades.

Critical minerals stocks such as MP are up as the White House announced over $2B in investments.

Berkshire Hathaway (BRK.B) engaged in stock buybacks and net-bought stock last quarter as Geico weakness was offset by BNSF and the services business. The stock is fat on the news.

Bottom line: Quiet start to the morning as we wait for CPI and Iran clarity.

Click here to schedule a meeting — I’m here to help you take the next step toward financial freedom.

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