Retirees are increasingly keeping pets, especially smaller dogs and cats. Many retirees find pets help reduce loneliness and stress, and provide companionship. While some research suggests pets can improve health, other studies have not proven health benefits or shown risks like falls. However, attitudes are changing as more retirees want pets, and more retirement communities now allow pets. Retirees are also highly devoted pet owners, spending over $1,000 annually on pets, and considering pets in their financial planning.

1. MANAGING YOUR MONEY,
WORK AND SUCCESS
SUNDAY, MAY 31, 2015
Copyright © 2015 The New York Times
SpendingWell
BRIAN SNYDER/REUTERS
PHOTOGRAPHS BY GRETCHEN ERTL FOR THE NEW YORK TIMES
PRINCESS Linda and Gary Childs of Massachusetts call Chino, their Chihuahua-pug, “little girl.” They also dress her up and put her in a stroller for walks.
For years, the trope in retirement
planning was to reduce the stock
holdings in your portfolio and add
bonds as you neared or entered
retirement. That advice is being
challenged.
It goes against the grain to sug-
gest that a retirement portfolio
might need more stocks. Doesn’t
that mean more risk? It does,
but weighed against inflation and
bond-market risk, it could mean
the difference in having enough
money in one’s 80s or 90s or older.
The key to this relatively new
thinking is that stocks can deliver
better inflation-adjusted returns
than bonds most of the time, and
they may offer sustainable retire-
ment financing over several de-
cades. If you know how much risk
you can take, you need to keep this
growth-oriented “glide path” in
mind to cover your future needs.
Wade Pfau, professor of retire-
ment income at the American
College in Bryn Mawr, Pa., wrote
a paper with Michael Kitces of
the Pinnacle Advisory Group, a
wealth management firm in Co-
lumbia, Md., about a “rising glide
path.” This approach dictates that
a greater percentage of stocks in a
retirement plan “is often the best
shot at making your money last.”
Mr. Pfau and Mr. Kitces ran sim-
ulations using various mixes of
stocks and bonds over time. Since
stock valuations go up and down
every year, in some years they
may be a better buy than in others.
“With U.S. historical data,” the
authors say, “it is difficult to beat
a strategy which maintains a con-
sistently high allocation to stocks
to the extent that a retiree’s risk
tolerance allows for this, and sub-
ject to the caveat that high stock
allocations cannot always be ex-
pected to do as well in the future.”
While bolstering the stock mix
in your retirement portfolio looks
good on paper, Mr. Pfau admits
“it’s not for everyone.”
You run the risk of timing the
market. Managers can often guess
wrong on the best times to buy.
And most investors tend to buy
stocks on the upswing and not
when they are bargains.
It’s worth asking how much you
will need in your nest egg. What
will your cash flow needs be, given
medical expenses, long-term care
and discretionary expenses?
Your adviser should be able to
run some simulations based on the
amount of money you have, your
projected retirement withdrawals,
how much you will spend and vari-
ous portfolio mixes and rates of re-
turn. Of course, that’s a lot for any-
one to digest. Most planners have
software that can generate multi-
ple “what if” situations. They can
show you the benefits of adding or
scaling back on stocks. If you are
guarded about stocks, you need to
understand how diversifying can
improve returns over time.
Craig Israelsen, a developer of
7Twelveportfolio.com and prin-
cipal with Target Date Analytics,
has found that a “moderately ag-
gressive” portfolio employing 12
different types of investments not
only can outperform an all-stock
portfolio, but also beats all-cash
and traditional “60 percent/40 per-
cent” stock-bond portfolios.
In a study of portfolios covering
1998 through 2014, Mr. Israelsen’s
12-asset mix returned an annual-
ized 7.6 percent, compared with
6.4 percent for all stocks and 6.5
percent for the 60/40 combination.
A certified financial planner, char-
tered financial analyst or invest-
ment adviser should be able to
give a “present value” calculation.
This figure shows the value today
of an amount of money in the fu-
ture given a certain rate of return.
One thing is certain: You’ll need
to open your mind to different pos-
sibilities on how various invest-
ments perform over time. “To me,”
Mr. Israelsen notes, “there are two
major financial issues pertaining
to retirement planning: adequate
savings rate and an adequately di-
versified portfolio. It’s kind of like
medicine. What is needed by one
59-year-old may not be appropri-
ate for another 59-year-old.”
INVESTING
JOHN F. WASIK
For the Love of Animals
41%of Americans 65 and older have pets;
for those 45-54, it’s 68 percent.
60-40Younger people are more likely to
have dogs. Those 65 and older, cats.
$1,600Americans spend more than this a
year on a dog; for cats, it’s $1,100.
$60.5 BillionWhat Americans are expected to
spend on pet items this year.
Talking Points
Snapchat, Twitter and Video
While Behind the Wheel
A survey commissioned by AT&T
shows many drivers have expand-
ed beyond texting to Facebook,
Snapchat and Twitter, taking selfies
and even shooting videos. AT&T
has tried to discourage distracted
driving through its “It Can Wait”
public service campaign but the
findings released in mid-May were
startling: 27 percent of drivers age
16 to 65 report using Facebook, and
14 percent report using Twitter, and
3 percent who post to Twitter while
driving do it “all the time.”
Record Sales on Broadway
The Broadway League said that
New York’s 40 Broadway theaters
had sold a record $1.365 billion
worth of tickets in the year that
ended on May 24. Broadway also
broke a record for attendance. It
drew more than 13 million people
last year and attendance has risen
13.3 percent over the last two years.
Buses Powered by Propane
A growing number of cities across
the country are turning to propane
to power their school bus fleets.
Of the top 25 school bus markets,
19 have propane-fueled vehicles,
including New York, Chicago,
Houston, Los Angeles, Miami, Phil-
adelphia and Phoenix. Boston just
bought 86 for the fall. With tougher
emissions standards looming
and the pressure to save money,
propane is an attractive alternative
since it reduces greenhouse gas
emissions by 22 percent compared
to gasoline-powered buses.
Amazon Paying More Taxes
Amazon said that as of May 1 it had
started reporting revenue from its
operations in Britain, Germany, It-
aly and Spain and will start paying
taxes in Euro-
pean countries
instead of fun-
neling nearly all
its sales through
Luxembourg, a
low-tax haven
that serves as
its home base.
The move could
put pressure
on other American tech giants, like
Google and Apple, to follow suit,
since their tax strategies to sharply
reduce the amount of tax they pay
in Europe has been criticized.
Bonds can protect
against market risk, but
returns are lacking.
Linda and Gary Childs go almost
everywhere with their “little girl.”
The retirees, from West Boyl-
ston, Mass., love to parade 3-year-
old Chino down busy streets in her
stroller. They take her to restau-
rants dressed in her fur-lined vest
or polo hoodie where “she sits in
her own chair, very polite.”
But their favorite place may be
the seashore, where Chino wears
sunglasses and one of her four
beach dresses while lounging in a
chair embroidered with her name.
“Chino gives us so many laughs
and so much love,” Ms. Childs, a
67-year-old retired schoolteach-
er, said of the 12-pound Chihua-
hua-pug mix. “She just makes ev-
erything better.”
The Childs are unusual in some
respects. Retirement remains a
time when many Americans move
away from things they have to
paint, feed or nurture. Only 41
percent of Americans 65 and older
live in households with pets, com-
pared with 68 percent of those 45
to 54 and 76 percent of 18- to 24-
year olds, according to a 2014 sur-
vey by Mintel, a research agency.
The golden years may have less
bark, bite and meow, but in the
last decade new scientific stud-
ies, evolving attitudes about pets
and changing family structures
have reshaped the relationship be-
tween retirees and animals, even
if much of the new research is not
universally accepted.
Erika Ribaudo, an adviser at A
Place for Mom, which helps about
200,000 families a year find ar-
rangements for retirees, noted a
growing demand for pets by retir-
ees and the willingness of senior
communities to accept them. “As
recently as 2005 there were very
few communities that accepted
pets,” Ms. Ribaudo said. “Now,
probably 40 percent of them are
pet friendly, and that number is
growing. Science tells us that pets
make people feel so much better,
and more clients just don’t want to
give up their beloved family mem-
ber. Today, they don’t have to.”
From 2010 to 2015, pet owner-
ship in the United States increased
about 3 percent; 65 percent of
households own a pet, usually a
dog or cat. During that same time,
according to the American Pet
Products Association, spending
on pet items increased about 25
percent, to what is expected to be
$60.5 billion this year.
For retirees, smaller is better.
Younger pet owners are more like-
ly to own dogs than cats — by a
roughly 60-40 split, Mintel found.
This gap narrows with age, so that
the 65 and older crowd is slightly
more likely to own cats than dogs.
As more Americans live alone
and families have fewer chil-
dren, “their attachment to pets
is deepening,” said Hal Herzog, a
psychology professor at Western
Carolina University and author of
“Some We Love, Some We Hate,
Some We Eat: Why It’s So Hard
to Think Straight About Animals.”
Helicopter pet owners primp
and pamper their cosseted com-
panions. Pet shops become super-
stores with clothes and jewelry.
High-end pet foods — including
organic, holistic, grain-free, non-
G.M.O. offerings with meat, poul-
try and fish — account for more
than 40 percent of sales. Veteri-
narians report a rise in pet obesity.
Retiree pet owners seem es-
pecially devoted. “As boomers
become empty nesters, they look
for other things to nurture,” said
Richard Rosso, a certified finan-
cial planner in Houston. “During
the last seven to 10 years I have
noticed that the retirement dream
for many clients is still drinking a
piña colada on the beach, but now
they see a Lab next to them.”
Since the average American pet
owner spends more than $1,600
per year on a dog and $1,100 on
a cat, Mr. Rosso said, he now in-
cludes pet budget lines in his fi-
nancial plans for retirees.
The change is apparent at R.V.
parks and campgrounds. “They
have always accommodated pets,
but in the last five years or so they
have started investing capital in
dog parks, agility courses, sticks
and tubes and doggy washing sta-
tions,” said Debbie Sipe of the Cal-
ifornia Association of R.V. Parks
and Campgrounds.
Kampgrounds of America is ex-
panding such pet-friendly features
through its Kamp K-9 program,
according to Mike Gast, vice pres-
ident of communications. He said
that about 55 percent of its camp-
ers — the vast majority of whom
travel by R.V. — own pets.
The growing belief that pets are
good for you may make ownership
more appealing to retirees. Some
studies find that pet ownership
can help reduce blood pressure,
triglycerides and cholesterol while
increasing one-year survival rates
after a heart attack, according to
Alan Beck, a researcher who is the
director of the Center for the Hu-
man-Animal Bond at Purdue Uni-
versity. Other studies show that
pets reduce loneliness and stress,
promote interaction between peo-
ple and encourage exercise.
Mr. Herzog is less convinced.
“We don’t hear much about the
compelling research finding that
pets do not improve our health,
reduce our loneliness or make us
happier,” Mr. Herzog said. “Or
about the 85,000 or so people a
year, many of them older, who go
to emergency rooms with broken
bones each year because of their
pets. Pets may be good for us, but,
right now, I think it is more of a hy-
pothesis than a proven fact.”
Such debates are an after-
thought at places like Brighton
Gardens of Raleigh, an assist-
ed-living and memory care com-
munity in Raleigh, N.C.
Blair Patterson, 79, a Brigh-
ton Gardens resident who uses a
wheelchair, said his Shih Tzu is a
constant source of joy.
“She is so good for my ego,” Mr.
Patterson, a retired investment
broker, said. “She thinks my wife
and I are the most. Sometimes I
think, ‘Dear God, please help me
be the man my dog thinks I am.’ ”
RETIREMENT
J. PEDER ZANE
As more Americans live
alone, ‘their attachment
to pets is deepening.’
SPENCER PLATT/GETTY IMAGES
ASTRID STAWIARZ/GETTY IMAGES
Tip on Who
Pays the Tab
Balancing Advice for Retirees
“Don’t even bother,” my big-shot
executive pal warned me as I
reached for my college-era Visa.
We hadn’t seen each other since
my undergrad days. “You never
pay for the meal of someone who’s
better off than you.”
“That’s crazy,” I said.
“Who’s the millionaire between
us?” he shot back. “Who’s the one
who’s been to more business din-
ners than you’ll ever dream of?
Who’s the one who has the black
American Express card? Do not
pay for this meal.”
“But, but ...”
“When I started out,” he ex-
plained, “I was invited by the
founder of our company for drinks
and steak. And I tried to pay for
our dinner, which ended up about
$200 — and this was in the ’70s,
when $200 meant something. He
yanked my wallet from me and
said, ‘John, I invited you to dinner;
that means you’re my guest. And
if you’re my guest, that means I’m
supposed to take care of you.’ ”
He continued. “And my boss
said, ‘What kind of boss would I be
— what kind of man would I be —
if I made my worker or guest, who
I know makes far less money than
me, pay for the meal? That’s just
a pathetic move that shows I have
no empathy. That’s not a good phi-
losophy to live by. So I pay. The
good person always offers to pay;
and the wealthier of the two al-
ways does.’ ”
“Whenever I went out with peo-
ple more successful than me, I al-
ways judged them by the words of
my boss. The people I wanted to
do business with or start a friend-
ship with were those who offered
to pick up the bill; the shady char-
acters were those who just sat
back and waited for someone to
pay. And when I started picking up
the tab for my friends and on busi-
ness meals as I became wealthier,
everyone’s view of me changed.”
He won.
The lesson I learned that day is a
mantra I’ve repeated. My pal also
clued me in as we left the restau-
rant: “Besides, every single meal I
have gets reimbursed. So not only
does the other person get a free
meal, so do I. Isn’t picking up the
tab awesome?”
LESSONS
GUSTAVO ARELLANO
ONLINE: MONEY GETS PERSONAL
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CLASSY TOUCH If you are doing well,
paying for the meal is good form.