by Joe Hearn | Nov 10, 2011 | Pursuits, Travel
Travel is at the top of many retirement “to-do” lists, so it’s a topic I’ll cover from time to time here at IR. One interesting development these last few years has been the explosion of new tools available for travel bugs on their cell phones and iPads. Below are ten apps that I use all the time to help me plan, navigate, and enjoy my travels.
FlightBoard I love this app! The best way to explain it is to have you imagine the arrivals and departure boards at your local airport. Now imagine that you could have them on your cell phone (or iPad) with the most up-to-date information for almost every airport in the world. Picking someone up from the airport and need to know if their flight is still on time? Check FlightBoard. Need to know what gate your connecting flight leaves from? Check FlightBoard. Need to email your flight info to Grandma Jan so she knows when you’ll be arriving for Thanksgiving? You can do it directly from FlightBoard. As an added bonus the app has a beautiful design interface that was inspired by the arrival/departure boards at Charles de Gaulle Airport inParis.
TripAdvisor If you’ve ever been planning a trip somewhere and wondered what other travelers thought of the hotels, restaurants, or attractions you’re considering, then TripAdvisor is for you. This app (and www.TripAdvisor.com) gives you access to over 50 million reviews and opinions posted by your fellow travelers. It also has cool tools like “Near Me Now” which pegs your current location and then gives you options for nearby restaurants or attractions.
Dropbox The Dropbox motto is “Your files, anywhere.” That pretty much sums it up. Anything you save to Dropbox is automatically saved to your other computers, phones, mobile devices and at dropbox.com. That means you can access those files (even without an internet connection) while you’re on the road. It’s a great tool for those who need access to certain work or other documents while traveling. I’ve also used it to store back-up copies of my passport, driver’s license and travel itineraries. Go to dropbox.com to get a free 2 GB account and then download the Dropbox mobile app from the app store.
Big World This app does a lot of things, but I use it primarily as a trip-planning guide. Creating a new guide displays a map (similar to Google maps) of the area that you’re visiting and then you can drop pins at key locations (e.g. your hotel, restaurants you want to visit, sites you want to see, etc.). It gives you a good visual representation of the places on your itinerary and helps you pack as much as possible into each day by scheduling things based on their proximity to each other. It’s also a helpful navigator as its GPS locator constantly tracks your position and displays it on the map.
Subway Apps If you’re visiting a big city and plan on taking public transportation, be sure to download that city’s subway app. Having the route map in your pocket is useful, but where these apps really shine is with their route planning features. Here’s an example. On a recent trip to Washington, DC I could see on Big World that the closest metro stop to our hotel was the Foggy Bottom station. As we’d head out each day I’d pull up my DCRider app and click on the Trip Planner feature. In the “from” field I’d choose “Foggy Bottom” and in the “to” field I’d choose wherever we wanted to go. If we were heading to Arlington Cemetery, I’d choose that and click “Get Route.” The app would then give me the best route. In this case it told me to board the blue line towards Franconia-Springfield and then get off at the second stop. These apps are a great way to take the stress out of subterranean travel in strange cities.
Where To Go This app is kind of like having a concierge in your pocket. In a strange city and want to know all the French restaurants within a ten block radius? Trying to find the closest grocery story? Have a toothache and need to find a dentist? These are just a few of the hundreds of preset searches you can do on Where To Go. The interface is simple to use and gives you twelve key categories like restaurants, entertainment, retail stores and medical. Click on restaurants, for example, and it gives you a comprehensive list from Afghan to Vietnamese. Then click on the type of food you want and your options are highlighted on the map with your current location represented by a blinking blue dot.
The World Clock Thanks to the magic of jetlag, it’s not unusual to wake up at odd hours at the beginning of a trip not remembering if you’re in Baltimore or Bangkok. The World Clock won’t cure jetlag, but it will at least keep you oriented to the correct time zone. It has a really cool day/night display that moves with the sun and below that you can put clocks for six different cities, which is helpful if you’re having lunch in London and wondering if it’s too early to call the kids at grandma’s house back in Omaha. The simple alarm feature is also a welcome addition if you’ve ever struggled to figure out the nightstand alarm at your hotel.
Kindle This is a great app for those who love to read when they travel, but hate to lug around their library. It gives you access to the million plus books at Amazon as well as hundreds newspapers and magazines.
TripIt TripIt is a great travel organizer that allows you to put all of your plans in one place. Just forward your booking confirmation emails to plans@tripit.com and they will be added to your trip itinerary in the app. Then when you need your rental car reservation number or flight information, you know exactly where to go to find it.
AirportAce This app gives you access to terminal maps, wifi availability, transportation options, parking information, weather, and amenities at an ever increasing number of airports worldwide. Trying to make a tight connection at LAX and need to find the closest Cinnabon? This is the app for that.
Games A game can be a great diversion if you’re suffering through a particularly long layover or flight delay. Your options here are pretty much unlimited, but some that I enjoy are Chess with friends, Words with friends, Cut the Rope, Bike Baron, and RealRacing2HD.
Whether you’re heading to Kansas or Cameroon, these apps will be a welcome companion. It’s a big world out there. Get exploring!
Joe
by Joe Hearn | Nov 7, 2011 | Pursuits, Retirement
In the recent media coverage surrounding the death of Steve Jobs I read a quote from Walter Isaacson (Jobs’ biographer) about how mortality motivated Jobs:
“He talked a lot to me about what happened when he got sick and how it focused him. He said he no longer wanted to go out, no longer wanted to travel the world. He would focus on the products. He knew the couple of things he wanted to do, which was the iPhone and then the iPad.”
My question for you is this:
Why wait?
Why does it so often take a terrible tragedy, a frightening diagnosis or a certain life stage (e.g. retirement) before we begin to take our dreams and plans seriously? Shouldn’t all of our years be devoted to doing the things that we really care about?
In all fairness, Steve Jobs was a pretty focused person even before his illness, but facing death seems to have resulted in an even more drastic re-ordering of his priorities. We all know our days are limited, so why not be more intentional with the time we have?
Jobs alluded to this idea in his 2005 commencement address to Stanford University students:
“For the past 33 years, I have looked in the mirror every morning and asked myself: ‘If today were the last day of my life, would I want to do what I am about to do today?’ And whenever the answer has been ‘No’ for too many days in a row, I know I need to change something.”
As you start your day today, think about that quote. Think about what you really want out of life. What will fill you with a sense of purpose? What will make you happy and provide meaning? Whatever your dreams (retirement or otherwise), start taking them seriously. As Jobs so eloquently said:
“Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma, which is living with the results of other people’s thinking. Don’t let the noise of others’ opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.”
Thanks for reading. Have a great week.
Joe
by Joe Hearn | Oct 31, 2011 | Estate Planning, Income, Retirement
I spent a lot of time traveling in October, which was good for my tan, but bad for my writing schedule. There’s quite a bit on the editorial calendar for November though, so stay tuned. In the meantime, below is a list of articles published at Intentional Retirement during October.
Thanks for reading!
Joe
by Joe Hearn | Oct 21, 2011 | Estate Planning
October 17-23 is officially National Estate Planning Awareness Week. As in years past, my procrastination got the better of me and I didn’t get you a gift, so I’m sending out this handy little estate planning primer instead. Enjoy.
What is estate planning?
It’s pretty simple really. Someday we’re all going to die. Our estate plan spells out things like how we want our property distributed, who we want to take care of our minor children, and who we want to handle our affairs. It also spells out who we want to make medical and financial decisions for us if we become incapacitated.
Who needs an estate plan?
Short answer: You. Regardless of how much or little you have, you should have a plan for both death and incapacity.
How do I go about setting up a plan?
Estate planning laws are complex, always changing, and often very rigid. As unpleasant as it can sometimes be, you need to work within that complex framework if you want to accomplish your goals. Working with your financial adviser and a competent estate planning attorney will ensure that you have a plan that not only accomplishes your wishes, but saves you time, frustration, and a lot of money.
What should a good estate plan accomplish?
A good estate plan should accomplish three things: It should pass your property to the correct people, designate the correct people to take charge, and minimizes expense, hassle and taxes.
What are the key estate planning documents?
Most estate plans have a will, living trust, durable power of attorney for finance, durable power of attorney for health care, advanced medical directives, and a letter of instruction.
What is a will?
A will is simply a legal document with formal signing requirements which spells out your intentions for the division and distribution of your property to heirs at death. If you die without a will (also known as intestacy), the laws of your state of residence, or the laws of the states in which you own real estate, may control who inherits your property. You need a will even if your assets are owned in joint tenancy, a revocable living trust, or in a manner where you designated a beneficiary (e.g. life insurance) to guard against intestacy for property titled in your own name or in the event your joint tenant or beneficiary dies before you do.
What is a revocable living trust?
A living trust is a legal entity that owns your assets. You typically act as trustee of those assets during your life and then name someone to take over for you after you die. Your trust document gives instructions for how you want your property handled and distributed after death. A living trust is often used as a will substitute because it avoids the costly and time consuming process of probate. You will typically title your assets in the name of your trust while alive and also have a “pour over will” that will transfer any assets not properly titled into the trust after you die.
What is a durable power of attorney for finance?
A durable power of attorney for finance is a simple and inexpensive legal document that authorizes a person you have chosen to step in and manage your day-to-day financial decisions if you become incapacitated. Everyone needs this document to provide for the ongoing management of their financial affairs if they cannot make decisions for themselves.
What is a durable power of attorney for health care?
Similar to the power of attorney for finance, the health care power of attorney is a legal document that authorizes a person you have chosen to step in and make health care decisions for you if you become incapacitated and can no longer speak for yourself.
What is an advanced medical directive?
An advanced medical directive (sometimes called a living will) provides written instructions to your agent that communicate your wishes regarding the withholding or withdrawal of certain life support equipment or medical procedures. Without these instructions, medical providers are typically required to use artificial means like life support to prolong your life.
What is a letter of instruction?
A letter of instruction is a non-legal document that you can choose to include with your planning to give any personal thoughts, feelings or directions to your heirs. It can include things like burial wishes or even final words of wisdom and encouragement. Unlike the will, the letter of instruction remains private. Keep in mind, however, that anything in the letter is not legally binding.
As always, thanks for reading! Touch base if I can ever help.
Joe
by Joe Hearn | Oct 18, 2011 | Income, Retirement, Social Security
Here it is:
Every year during retirement, everything you buy will cost more than it did the year before.
Such is the nature of inflation. In 1990 a stamp was 25 cents. Today it has almost doubled to 44 cents. A gallon of gas was $1.16. Today you can expect to pay triple that. A new home in 1990 was $149,800. Today it is…well, let’s just say housing has hit a bit of a soft patch.
Multiply those increases across all the goods and services you buy during retirement—dinner out, a new car, a vacation—and over a 20-year retirement, you can expect prices to more than double (assuming 4 percent annual inflation). That means you’ll need twice as much income later in retirement to buy the same goods and services you bought at the beginning of retirement.
How can you combat this nemesis of inflation? Most people’s retirement income comes from two different sources: Social Security and personal savings. Let’s look at ways to overcome inflation in each.
Social Security
Social Security has a built in annual cost of living adjustment, so most people assume that it will keep pace with inflation. Unfortunately, that may not be the case. Social Security adjustments are based on the Consumer Price Index or CPI. For decades, the Bureau of Labor Statistics (BLS) calculated the CPI in a fairly straightforward manner. They looked at a basket of goods, and determined how much it would cost. The following year they would price out that same basket of goods and the CPI would go up or down based on the new price.
In the 90s, some in government began to argue that inflation was overstated. They argued that as prices increased people would substitute less expensive alternatives, so the “basket of goods” should be adjusted each year. If steak got too expensive, they assumed that consumers would substitute something cheaper like hamburger. So why not remove steak from the basket, put hamburger in and voila, inflation is under control. Rather than implementing this “variable basket”, the Clinton administration implemented a different process that essentially achieved the same results. The BLS began to weight items in the basket differently. Basically, items that were increasing in price were given less weight than items that were decreasing in price.
To make matters worse, the BLS went on to make another change based on what they called “hedonics.” In short, hedonics doesn’t simply consider the price of an item, but the value that you get from that item. So if the price of a new car increases 10 percent, but there are new features on the car like airbags or heated seats that increase the “value” to the consumer by 15 percent, then the BLS would essentially say that the price of that car had decreased by 5 percent even though you’re paying more for it.
Applying this to your Social Security check, you can see that the annual cost of living increase built into the program won’t necessarily help you to keep pace with inflation if it is based on the fuzzy math of the CPI. A case in point: there were no cost of living adjustments in either 2010 or 2011, even though prices for things like food, fuel, and medical care undoubtedly increased over that period.
The solution:
The best way to overcome this hurdle is to build your own inflation factor into your Social Security benefits. How do you do that? Rather than waiting until full retirement age or later, the average person retires at 62 and takes a roughly 20 percent permanent reduction in benefits. Rather than following their lead, if you wait a few years you can retire on full benefits. Even better, retire a few years “late” and you can add as much as a third to your annual benefit (8 percent per year for those born after 1943 to a maximum age of 70). The annual cost of living adjustment will still be understated, but it will be based on a much higher benefit amount.
Personal Savings
In the same way that inflation eats away at the value of your Social Security income, the purchasing power of your savings and investments are also constantly being eroded. Failure to keep pace will result in your money becoming worth less until it is eventually worthless. As we saw earlier, even a modest rate of inflation of 4 percent can wipe out nearly all of the purchasing power of your nest egg during a 20-year retirement.
To overcome this problem, you need to invest in things that have the possibility of outpacing inflation. Understandably, however, the volatility and uncertainty of the last few years has caused many to shift their investments into things like money markets, certificates of deposit (CDs) and other “safe” investments.
Unfortunately, safe can be risky.
Consider a day in the hospital. In 1980, a day in the hospital cost $344. Today that same day costs around $5,310 (according to statistics published by the Wall Street Journal). For the sake of our example, let’s assume that 30 years ago you wanted to start planning ahead for your retirement. You thought that someday you might end up in the hospital for an illness and you wanted to set aside enough money to pay for a two-week hospital stay. You didn’t want to risk losing the money however, so you just put the cash into your safe-deposit box.
Fast forward three decades and you’re hospitalized with pneumonia for two weeks. When the bill arrives, you remember the cash that you stashed away so many years ago. You make a trip to the bank, open the box, and find exactly $4,816. Looking at the bill, you realize you’re about $70,000 short. By not outpacing inflation, your money lost almost all of its purchasing power.
Now let’s assume that instead you invested that $4,816 into the S&P 500 back in 1980. Even with all the ups and downs, it would have grown to nearly $135,000 by 2011. That’s enough to pay your entire hospital bill with plenty to spare.
The solution:
So what are some ways to preserve the purchasing power of your nest egg? First, as we just saw, you should resist the temptation to be too conservative. You aren’t doing yourself any favors by having a portfolio dominated by “safe” investments like cash, government bonds and CDs. These investments are less likely to outpace inflation and could even lose a significant amount of their value during high inflationary periods. Most investors should keep at least a portion of their investments in quality stocks.
Second, consider investments in real estate, commodities or precious metals. These types of “intrinsic value” investments tend to do well during inflationary times. As we have seen with the current downturn, however, they can also be more volatile and less liquid than stocks and bonds, so keep that in mind.
Finally, consider investing in a real return mutual fund. These funds invest in a wide range of investments that are designed to battle inflation, such as inflation protected treasury bonds, real estate investment trusts, floating rate bonds, non-U.S. debt, natural resource stocks, high yield bonds, currencies and commodities.
Clearly, a fixed income retirement strategy in a rising cost world is a recipe for running out of money. By investing in a well balanced portfolio that is designed to keep pace with inflation, you can help ensure that your money not only lasts for your lifetime, but also provides you with the income necessary for security and independence during retirement.
Thanks for reading. Touch base if I can ever help.
Joe
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