I love living in Florida. Plain and simple.

Every now and then after a hurricane affects part of the state, I am asked, “How can you live down there knowing a storm can form and in the matter of a few days destroy your home?”

My stock answer is, “The weather is great.”

If it isn’t the weather, we will get some grief about unique situations like hanging chads, Elián González or the quirky news items we seem to produce regularly. Take for instance, the news story from a few months ago in which a thief hid from police by jumping in a local pond and was killed by an alligator.

And of course we get teased about our retirees, with cracks about how they eat dinner at 3:15 in the afternoon for the “early bird special,” how they can all recommend an excellent dermatologist, or make the slow cars in front of you in the left lane appear to be driven by headless people.

Nonetheless, the weather is indeed great, most of the state is quite affordable and safe, we have a constitutionally mandated balanced budget, and we have no state income tax.

These and other pros make Florida a haven for retirees.

I have been working with retirees in my corner of the Sunshine State, the Space Coast, for over a quarter of a century. I’ve seen clients progress through the go-go, slow-go and no-go stages of retirement and I have attended far too many funerals.

For today, I have a few observations about our Florida retiree clients.

• Not one of our clients ran out of money in their lifetime and it is unlikely any will.

• Not one of our clients was forced to cut back spending because of bear markets in stocks or changes to interest rates.

• Permanent large decreases in net worth have not come from bear markets.

• Most clients love their retirement but most always have a cloud of worry hanging over their heads.

Leaving A Legacy
We certainly believe that our advice was a big part of why all our clients could or should be able to leave something to their heirs, but other factors were also quite significant. For instance, the habits that allowed our clients to accumulate nest eggs they could live off in the first place are the very habits that helped the money last—they live within their means, consider the long-term ramifications of short-term choices and manage debt responsibly.

Don’t get me wrong. Our clients are not inactive or miserly. Quite the contrary. They volunteer. They travel. They spend. They enjoy themselves.

They also tend to keep the same “lifestyle” in retirement they did before retirement, or they choose a simpler, more low-key and less expensive lifestyle once they leave the workforce. Sure, they loved staying at the Waldorf Astoria, but they can enjoy NYC from a Hilton just as well.

They do not view this as settling or some kind of demotion. It comes from experience and an understanding of what is important to them. They know that reasonableness makes the money last longer for them and eventually their heirs. It isn’t sacrifice to them; it is goals-based prudence.

Pay Cuts
I stated earlier, “Not one of our clients was forced to cut back spending because of bear markets in stocks or changes to interest rates.”

From our side of things, we created broadly diversified portfolios and managed them prudently for our clients based on a collaborative financial planning process. This helped foster resilience when markets didn’t cooperate.

Once we got new clients to stop focusing on or limiting themselves to seeking retirement income from interest or dividends and take a more balanced and diversified total return approach, most of the retirees experienced increasing retirement income.

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