Retirement Expert Voices Today

The 90%-10% rule

Because I have the world's most annoying accountant--the man has absolutely no sense of humor about meeting deadlines and filing accurately; he is in favor of both--I have already started getting my papers together to help prepare my 2008 tax returns. Here is something I have noticed in going through my files. I divided by savings/investings into two buckets: Some 90% went to my retirement. The rest to things like my emergency fund and general savings. I didn't consciously plan it this way, but I think it is a good way to go. Like you, I am not getting any younger. (I am 54.) And like you, I saw my retirement accounts get hammered last year. (Even with making contributions, I was down 30% year to year.) So, my retirement accounts are a priority. More…

A Bad Idea -- Understandable Though It May Be

Bank of America is currently running ads that on the surface sound appealing. They are offering to let you put your retirement savings in things that are guaranteed. Given the recently performance in the market, who wouldn’t want that? The answer should be: You. Guaranteed investments are the not the way to go, if you are saving for a long-time goal (like retirement.) The returns on such things as money market funds, and certificates of deposits, even if they are guaranteed may not be enough to keep up with inflation, let alone produce the long-term growth that you need. More…

Life Is Unfair. Deal With It.

Over the weekend, friends were complaining about the fact that the worth of their retirement accounts have plummeted this year. I told them the following: In a perfect world, the value of our retirement savings would climb every single year from the time we put the money in, until we decided to finally use the funds to pay for the retirement of our dreams. We would never suffer a financial crisis caused by divorce or illness. And we never find ourselves suddenly unemployed or the victim of the plummeting stock market like the one we experienced in 2008. More…

Targeting Retirement

I have been amazed by the number of folks I have talked to in the past week who have had their retirement plans put asunder by the recent market crash. And to be blunt, it is (mostly) their fault. One of the fundamental rules of saving for retirement is to shift your money to ever more conservative investments, as your retirement draws near. And yet I can't tell you how many people in their 60s have told me that they had ALL of their money in stocks, even though they planned -- or, had planned -- to stop working within five years. One way to keep this from happening to you is to use a "target date" mutual fund. They are also called life cycle funds. More…

Are you Rethinking your Retirement? (Drop me a line and you be featured here.)

The stock market has fallen more than 33% since last October. Even more depressing, collectively we have lost something like $2 trillion in the value of our retirement accounts. That has gotten me to start rethinking my retirement plans. I am wondering if it is affecting yours. I am not so much curious about people who are thinking about cutting back. Rather, I am wondering if you—like me—are seeing this as a chance to make lemonade out of lemons. The fact that our retirement accounts are plummeting means we are going to have to work longer. But that doesn’t mean we necessarily have do the same sort of work we are doing now. Are you using the current downturn to rethink what you will do for a living in the future, once you reach “retirement” age? More…

You Must Remember This

Over breakfast this morning, my wife handed me the business section, without even taking a glance. "I can't stand looking at the bad news anymore," she said. I understood completely. I, too, am tired of seeing the value of our retirement accounts fall day after day. But here is what I told her. Things are cyclical. We have seen the kind of stock market before. It is awful. And wearing. But eventually it ends. Until it does, if you are happy with the way your funds are allocated, my wife's approach is a good one. Don't read the bad news. Just keep doing what you are doing: Saving for retirement; making sure you have little or no consumer debt, and making sure you have money squirreled away in an emergency fund, invested in something ultra-safe. More…