Know when to hold 'em, fold 'em: Timing the market for retirement in harsh times

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Updated Nov 10, 2022

With all the worry over 2022's new federal regulatory proposals, diesel prices and availability reaching dire straits, and spot rates a mere shadow of where they were a year ago, it's increasingly common that packing it all in and retiring comes up in conversation with owner-operators. 

But nobody wants to leave the table on a losing hand. With stocks firmly in bear market territory -- the bellwether S&P 500, for example, is down 20% year-to-date -- even successful owners who wisely squirreled away funds for retirement may be in for a shock when checking account balances. 

Recent polling underscored impacts to the negative when comes to retirement investments and plans for Overdrive's mostly owner-operator readers. 

While the wide majority have been hurt by recent swings, some have benefited on the whole. That's what market uncertainty means, you might say, similar people doing similar work making relatively similar investments and finding wildly different outcomes.

If you've recently retired and you're reading this, there's a chance (indeed a hope) that in the midst of the pandemic, you sold your equipment for peak, previously-unheard-of prices, cashed stocks at the top of the COVID recovery phase and maybe even sold your home well above asking price as office workers fled cities for exurbs and rural areas. If you did, you're made in the shade, as they say. 

Yet if you held on just a few months more and saw home and truck prices moderate, and prospective cost of living in retirement balloon under unchecked inflation -- heaven forbid, some health problem pops up. ... You'd be fully justified to be frightfully stressful about the situation looking toward retirement. 

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The old Kenny Rogers song comes to mind, but investing isn't exactly gambling. Owner-operators deserve to feel more secure than you might at a poker table. 

Longtime Overdrive contributor and owner-op coach Gary Buchs, who retired from the road in 2019, cautioned against emotional responses to market forces. Over his four-plus decades of investing, he's been wiped out by market blowouts more times than he cares to remember, but overall has come up resoundingly in the black as a result of his consistent, persistent strategy.

"Close to 20 years ago, we tripped into what's called economic behavioral psychology, or the psychology of how we view money, and how we behave and interact with it," said Buchs. People tend to take wins for granted and losses hard. Buchs gave the hypothetical of an owner having a great week, bringing in $10,000 clear, then the next week losing $10,000 with a significant breakdown or other calamity. Though the owner comes out even, "the emotional response has double the power on the negative versus the gain," said Buchs, citing research. "And that drives poor, reactionary decision-making, instead of planned decision-making."

After a loss like that, anyone might be inclined to "gamble even more and put themselves at risk" to get back on top, he said. "If you're nearing retirement and you find yourself in that situation, it's probably an even bigger emotional impact."  

Instead of doubling down or fretting over account balances, Buchs said to keep eyes on the bigger picture.

"We have trouble imagining what our lifestyle is going to be when we leave full-time work," he said, but "you don't just stop living. It's not that you're all of a sudden going fishing every day. Be realistic about your happiness and health and wellbeing. If you're not going to be happy with what you're doing," no number on an account balance can fix that. 

[Related: Owner-operator of the Year Glen Horack 'in good shape' at the top for a run toward the finish line]

Initially in retirement, Buchs said his wife, Marcia, picked up some work with local churches, and he's still coaching owner-operator clients and hauls a few loads locally. Neither he nor his wife end up making much more than minimum wage, but the "light work keeps you active," he said -- healthy, engaged, with an important income bump, too. Combined, the couple's efforts net them about $24,000 annually, which ends up being something like a 30% bump to their planned fixed income. Soon, they'll go on a big vacation in Australia and leave that work behind for a bit. 

For owners truly facing imminent retirement without the funds to enjoy life, Buchs said there's no shame in getting back into a company driving gig just to sock away some money into social security and retirement plans. 

"Going back to being a company driver isn't admitting failure for an owner-operator," he said. Some might consider it a prudent move that can provide important benefits, like health insurance to ward off mounting expenses. Another Overdrive contributor with long experience, Clifford Peterson, just yesterday detailed his own move in part to shore up finances by coming out of retirement in a lease-purchase program with a carrier after a couple years away from the road.

[Related: Lesson learned finding a new home: How some recruiters blow it bringing on new operators

Bridget Bearden, research and development strategist at the Employee Benefit Research Institute, similarly stressed the importance of focusing on health rather than dollar signs. Bearden's father held a CDL, but couldn't maintain his medical certification due to difficulty controlling high blood pressure. Her organization's research has found that "55% of retirees aged 62-75 retired earlier than expected, and it's much higher among those with a sub-optimal health status."

"I think that’s probably the first thing that I would note is that it's very important to start preparing and taking stock of all that you have and assets and debts and liabilities, and envision what you want your lifestyle to be," she said. "Assets are going to fluctuate with market conditions, so it’s kind of difficult -- you can’t just say 'sell high, buy low.' The market is much broader than that. Housing expenses, medical expenses, where are you going to live, who are you going to live with, how is your health? These are all more important questions" than how well your portfolio performed last quarter. 

"Ensure the physical body is healthy with low blood pressure and not strained," she said. "Absent that, individuals will face unexpected expenses and issues." 

Read next: Retirement vehicles: Don't place your bets just on the physically rolling variety

Find more information and guidance around retirement savings/investment, among a myriad other topics, in the Overdrive/ATBS-coproduced "Partners in Business" manual for new and established owner-operators, a comprehensive guide to running a small trucking business. Click here to download the newly updated 2022 edition of the Partners in Business manual free of charge.