Enjoyment of everyday activities increases after retirement, a study from Australia has found.“

The heightened level of enjoyment lasts at least a year after a retiree stops working full time, researchers report in the journal Age and Ageing.

There is conflicting evidence about changes in enjoyment and happiness when people retire, coauthor Tim Olds of the University of South Australia told Reuters Health by email.

On the one hand, people may lose social connections and their sense of purpose in life when they retire, he said. On the other hand, retirement offers a chance to do the things you’ve always wanted to do. 

“We found that you’re likely to be happier when you retire,” he told Reuters Health in an email. 

That’s not because retirees spend more time doing things they like and less time doing things they don’t like, Olds noted.Rather, it could be that retirees get more pleasure from even mundane daily activities “because they have more autonomy and time-flexibility,” Olds said.

The 124 study participants all intended to retire within three to six months. The group was roughly half men and half women, with an average age of 62.

At the start of the study and again three, six and 12 months afterward, Olds and his colleagues asked participants to recall their activities in the last 24 hours. They grouped activities into eight categories: physical activity, social, self-care, sleep, screen time, quiet time, transport, work and chores.

Participants also completed surveys about their health, wellbeing, sleep quality and loneliness.

Compared to pre-retirement levels, average enjoyment ratings were significantly higher throughout the study.

“Changes were partly due to shifts towards more enjoyable activities . . . but were mainly due to retirees getting more enjoyment out of doing the same activities post-retirement,” the authors found.

Overall, enjoyment ratings were associated with wellbeing and better sleep quality.

Physical activity and social activity had the highest enjoyment ratings while work and chores had the lowest, according to the report.

Still, participants who continued to work part-time after retirement reported that their enjoyment of it increased substantially, the authors noted.

“People have a different experience when working after retirement,” said Kenneth Shultz, a social gerontologist and professor of psychology at California State University in San Bernardino.

“You don’t have to deal with the pressure of a career job, and people tend to not be emotionally invested in it,” said Shultz, who was not part of the study.

For those on the edge of retirement, however, work appears to be an unpleasurable drag, according to Olds and colleagues.

During those last few months before retirement, they write, “enjoyment decreased when the trip to work began, was momentarily elevated during work breaks, and rose again at the end of the working day.”

The study participants, they conclude, “were . . . working for the ‘eternal weekend’ of retirement.”

SOURCE: Age and Ageing, online June 7, 2016.

Copyright (2016) Thomson Reuters. Click for restrictions

This article was written by Linda Thrasybule from Reuters and was legally licensed by AdvisorStream through the NewsCred publisher network. 

• February 15, 2025

Relative return strategies measure performance relative to the movement of an unmanaged index of securities,  the S&P 500, the Russell 2000, etc…

In the world of relative returns, you “succeed” if you meet or beat your benchmark index; you “fail” if you trail your benchmark index. The consequences of failure – i.e., being fired – are quite drastic. To avoid that fate, a relative return manager must at least match the index returns (on a risk-adjusted basis). As a result, many relative return managers simply “hug” the index, i.e., they construct portfolios that essentially mirror the index. In effect, they tie their fates to mimicking a benchmark. What does this mean?

• Relative return strategies are great during bull markets when indexes rise.
• Relative return strategies stink during bear markets – they offer limited, if any, protection when target indexes decline.
• Alice in Wonderland: relative return strategies can be “successful” even when they lose money! For example, if your index is down by 20% but your holdings are down by “only” 17%, you have beaten your benchmark – and you have “succeeded” even though you are down 17%. Conversely, if the index is up 20% and you are up “only” 17%, you have lagged your index by a substantial margin – and you have “failed” even though you are up 17%.

So, when considering a relative return strategy, we ask the following questions:

• Why limit yourself to a world that can define a down year of 17% as “good” and an up year of 17% as “bad”?
• Why tether yourself to something as unpredictable and uncontrollable as an unmanaged index of publicly traded stocks?
• Why play only in a world where the goal is to be a mimic, where creativity to go your own way is discouraged?

Absolute return investing answers each of those questions with “there is a different way.” In the world of absolute returns, investors do not concern themselves with benchmark indices over which they have no control. Rather, they seek to generate positive returns independent of market movements, i.e., whether the market indexes move up or down.

Absolute return managers employ various techniques designed to take the market out of the equation. These techniques include:

• Investing in stocks, and going to cash when market indicators dictate.
• Using high probability of success options strategies, to manage risk.
• Employing rotational sector strategies that rotate based on market conditions into equities, bonds, commodities, sectors, and international.
• Bond mangers that can rotate between cash, investment grade and high yield bond as indictors dictate.

These strategies can have a profound impact on the risk/reward characteristics of a portfolio, and they are increasingly available to individual investors.

Source: Investment CPR, Investing for Consistent Positive Returns

• February 15, 2025

A Revocable Living Trust also known as a Grantor Trust, is commonly used in the estate planning process and has a number of benefits over a will.

1. Avoids Probate. The probate process can be very expensive, often with a cost of 1 to 3% of the estate value.  Also time delays can be between 6 months to over a year in some cases before the assets are finally distributed.  In some cases if the deceased person owned property in more than one sate there can be multiple probates in each state, further complicating matters.
2. Keeps the Estate Private. With or without a will, an estate is public record, and most people if they understood this would not want their estate information available to anyone.  With a trust this is not the case, so a person’s entire estate is private.
3. Provides for Conservatorship. By naming a successor trustee, it is very easy for that person to act in behalf of the Grantor for financial affairs.  In some cases with just a Durable Power of Attorney document, some financial institutions will not always accept it.  Also with the DPOA there may be some limitations that do not allow the agent to be able to do the things that the incapacitated person wants to do such as gifting. With a trust any financial institution generally always accepts the trust document naming the successor trustee position, and all of the activities the Grantor was doing before, can be performed by the appointed person.
4. A Trust is Very Difficult to Contest. With a will it is very easy for a disgruntled beneficiary to contest the distribution, which can create unnecessary headaches for the remaining beneficiaries.  There are no costs to do so and it is heard in probate court.  With a trust for a beneficiary to challenge the distribution, they have to actually file a suit against the trust in a civil court of law, and there are substantial costs that are incurred.      
5. Protects Property for Remaining Beneficiaries. A very important feature that a trust can provide, is to hold assets in trust in the case of minor beneficiaries, or if one wishes to protect assets for spendthrift children, or to simply create a trust for a beneficiaries assets to remain within to provide creditor protection as well as sheltering assets in the case of a divorce.

As you can see the benefits of a revocable living trust are numerous and for most people it is the best choice for your estate planning options.  If you haven’t set up a trust, or need to update your current trust, let us know as we have estate planning attorneys that we work with that can help you.

• February 15, 2025

Many states today are known as Community Property States. They include Arizona, California, Washington, Idaho, New Mexico, Louisiana, Wisconsin, Nevada and Texas. 

What is interesting is this type of ownership actually derived from Spanish Civil Law, from the early influence of Spanish settlements in  America. So if you’re a resident of one of these states then community property laws will apply.

1. Money earned by either spouse during marriage and all property bought with those earnings.

2. All debts incurred during marriage are generally debts of the couple. Under community property, spouses own – and owe – everything equally, regardless of who earns or spends the income.

Some property is also considered separate in Community Property which includes:

1. All property owned by a spouse prior to marriage.
2. Property obtained by a spouse after a legal separation.
3. Any property received as a gift or inheritance during the marriage from a third party (as long as this property remains separate from community property, such as joint banking accounts).

Also, pre-marriage debts remain separate property. For example, educational loans acquired before a marriage wouldn’t become community property.

But separate property can transform into community property. For example, if a spouse who owns property before the marriage adds the new spouse’s name to the deed, that home becomes community property.

So what is the main benefit of holding assets in Community Property? 

It has to do with how property steps up at death.  Normally in a non-community property state, if one spouse passes away and there is an appreciated asset such as real estate or stock, the cost basis, or what you originally paid for it, would get a 50% step up when the first spouse passes away. Not with Community property, the asset would get a 100% step or double step up at the first passing.

This can have huge tax ramifications for clients that have farm property, real estate, stock, or business holdings that have appreciated significantly over time. The surviving spouse can sell the asset and avoid paying tax on all of the gains that had built up prior to the decedent’s spouses passing.

This can open up additional planning opportunities, such as repositioning assets that may be necessary for the surviving spouse, capturing gains in appreciated assets as well as an opportunity to better position an estate to pass on to the remaining beneficiaries.

What if I don’t live in a community property state?

For those of you in states that are not community property states you can set up a Community Property Trust in Alaska or Tennessee even if you are not a resident of those states.  Once this trust is set up and property is transferred into the trust, it will have all of the benefits of community Property.

Important Details of Community Property

Are you holding title to real estate as joint tenancy in a community property state?

What if you live in a community property state but hold real estate as joint tenancy with right of survivorship? Generally if it is a home you would lose the step up of the entire amount and only half would step up on the first death.  Now remember a primary residence will still have the $250,000 step up without capital gains tax per person, but in some cases there can still be capital gains tax if the surviving spouse sells the residence if the gain exceeds $250,000. If instead the property was titled as community property then there would be a full step in value no matter how large the gain.

For other real estate assets such as rentals or commercial property, there would be a loss of the 50% step up by holding the asset as joint tenancy instead of community property. 

The only way that real estate titled as joint tenancy to receive the community property full step up would be it there was a document you had in writing that all property is to be considered community property.

What if only one spouse is listed on a brokerage account that had a large appreciation?

For this to receive the community property step-up, then there would need to be some proof that the stock shares were purchased within the community property marriage and that community property funds were used.  Without this proof there is a good chance that the 100% step-up would not be recognized.

The Power of the Community Property Agreement within a Revocable Living Trust.

With this document all property is deemed to be community property even if the title doesn’t reflect community ownershipand there is only one spouse listed on an account.  Most living trusts drawn up in community property states will have this but make sure your does!

As you can see there are some very good benefits to community property ownership so make sure you take advantage of this even if your not in a community property state.  If your not sure if your set up correctly reach out to your attorney or let us know and we can help you with details and also have attorney available who can draft and correct your documents.

• February 15, 2025

Here’s an interesting part of investing that most investors get wrong. In fact, if most investors understood this they probably would fire their broker. It has to do with how much it takes in percentage terms for a portfolio to recoup losses after a market correction.

So let’s look at this.  If you claim to be a conservative investor, and can handle a 10% loss, then I would agree that is very tolerable for a market investment, as it only takes a gain of 11% to get back to even. No problem. This happens all the time, the market may drop for a bit with a 10% or less loss just to quickly recover.

If you claim to be a moderate investor and think that you can withstand a 25% loss, it will take a little more to get back to even.  This is starting to get a bit more ominous as it now would take a 33% recovery to get back the 25% loss.  This could take quite a bit longer because as a moderate investor you’re normally only getting about half of what the market returns as it recovers.

So what if you’re an aggressive investor and say, “I want all of the market returns and invest in a S&P 500 index fund,” as most financial experts will tell you to do. Let’s say you experience a 50% market correction. Guess what? You now have to make 100% to get your money back.  “Wait a minute I don’t like this game”, you might say.  Well this is the stark reality of gains and losses. The more you lose the more you have to make to get your money back!

Here’s where it really gets ugly.  

Let’s say your broker recommends an individual stock with the hope of a large gain.  Unfortunately, the stock goes the other way and losses 70% of its values. I hate to say it but this happens a lot. Now, you have to make 233% just to get back to even.  “Wow I never would have done that if I would have known!” many would say.

You see, large losses are killers to growing a market portfolio over time.  Large endowments such as Yale and Harvard and high net worth investors know this and invest very differently than the retail investor.

Here’s the bottom line, if you want to be a successful investor you need to find out “How to limit your losses and still capture gains”.  If you want to find out how to do this, click our contact information below and take control of your portfolio!

• February 15, 2025