Exercising Caution

I TOOK MY REQUIRED minimum distribution, or RMD, at the end of July. I was planning on taking it at the end of the year, but my allocation to stocks was more than five percentage points above my target of 40%. I thought selling some of my stocks would be a good way to rebalance my portfolio and fund my RMD, so I sold a portion of my overweight in Vanguard Total Stock Market ETF (symbol: VTI).

I’d been thinking about increasing my stock position from 40% to 45%, but I decided against it. I recalled the saying, “Bulls make money, bears make money, pigs get slaughtered.” Although I have a fairly conservative portfolio, I thought greed was the real reason I wanted to change my asset allocation.

The stock market had been posting solid gains up to that point. I’m not saying my desire to own more stocks was some type of sentiment indicator predicting a market correction—though it did turn out that way. I would, however, suggest you periodically look at your asset allocation to make sure it hasn’t strayed too far from your target.

Our current portfolio of 40% stocks, 55% bonds and 5% cash investments has served us well. It’s given us enough growth and income to fund our six-figure living expenses, which includes $45,000 for travel this year. I know to some that might sound like a ridiculous amount, and I wouldn’t disagree. I never would have thought we’d be spending this much in retirement. But I also know, at age 73, that I don’t have much time left to do the things I want to do while I’m still healthy.

Our income from our Social Security benefits and my RMD is enough to cover our expenses. In addition, my wife will start taking her RMD in six years. If we can live off our Social Security and RMD, we should never run out of money. According to Vanguard Group’s Personal Advisor Select, our portfolio should continue to grow over time.

I realize we'll probably have to rely more on our investments as we grow older, because there are major potholes you sometimes can’t avoid and which can derail your retirement. Failing health is one of them. I was reminded the other day of how fragile my health is.

I was walking down the street to my car when I tripped over the uneven surface between the sidewalk and the curb. It felt like someone grabbed my right foot. I instinctively put out my arms and hands to break my fall. I was able to keep most of my body and face from hitting the pavement. I ended up with a cut lower lip, a small scratch on my right knee, a bruised right hand—and my pride wounded.

My wife said I was lucky. “You could have lost some of your teeth or broken a bone.” She’s right. I was very fortunate. Still, I’d like to think exercising played a major role in keeping me from getting seriously injured. All the weight-bearing exercises, including pushups, gave me the upper-body strength to keep myself from hitting the pavement harder.

I often wondered how much exercising can improve your health. I hadn’t really seen the true benefits until I took that spill. Now, I know.

It goes to show that all our good work doesn’t always produce significant results right away. You sometimes can’t see the benefits even when it does. It reminds me of one of my visits to see my primary care physician.

Many years ago, I saw Dr. Riley about my arm, which was bothering me. He wanted to give me a shot. He said it was the same shot he took when he had a problem with his shoulder. After he received the injection, he was immediately able to lift his arm above his head.

“I believe this shot can help you, too,” he said. He could see I wasn’t convinced. Then he sat down and looked me in the eye. “I want to level with you. Very rarely do I get a chance to see a patient walk out of my office feeling remarkably better than when they walked in. I know I help my patients, but I often don’t get a chance to see it.”

I took the shot thinking it might not only make me feel better, but also Dr. Riley.  Unfortunately, I didn’t feel any different when I left his office. My arm did start feeling better that evening and I believe it sped up my recovery. Dr. Riley just didn’t get a chance to see it.

We all yearn to see the results of our hard work and good deeds. I remember when I was working, while driving home, I’d think of all the things I accomplished that day and how my work made a difference. It made me feel good. I miss that part of my job, more than the paycheck. We can feel we have enough money, but I don’t think we can ever get enough of the pleasure that comes from achieving our goals.

Nowadays, I still take a mental inventory each day of the things I accomplished. Those accomplishments might not be as important as when I was working, but it still makes me feel good about myself. Maybe that’s because—deep down inside—I have a desire to show that, as an elderly person, I still have something to offer.

Dennis Friedman retired from Boeing Satellite Systems after a 30-year career in manufacturing. Born in Ohio, Dennis is a California transplant with a bachelor's degree in history and an MBA. A self-described "humble investor," he likes reading historical novels and about personal finance. Follow Dennis on X @DMFrie and check out his earlier articles.

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