great shape for it. His employer made near-term retirees attend
a "Retirement Prep" program to think about their Retirement in
terms of costs and activities; Retirement can be a long time.
Critical mistakes are easy to make even with detailed planning.
How will he and his wife fill their time with activities to stay well
and mentally sharp or handle the unexpected costly illnesses.
Little did he think of factoring in on-going complex decisions for a wife who developed a terminal illness without a cure. Even with
government programs, personal costs exceed $100,000 per year
for care plus other expenses including medications and daily trips
to a facility to keep her focused and in good spirits as her health continues to degrade.
Some view retirement as crossing the "FINISH" line, and from one perspective it is ...
but it is also the "START" line for transitioning into your new life until you leave us.
With programs declining from government and employers, the question turns quickly
to "how are you going to live your last 20 to 40 years along with any dependants and
what can you leave to your children to help build their needed nest egg." Will your
employer permit extended employment beyond 65? How far would you need to
continue working and how strong and healthy will you be? Accidents? Diseases?
There will be no clear answers or universal solutions here. The hope is to provide
"seeds" to be planted for the planning and budgeting to achieve whatever you may
set for your goals to yourself, any spouse and children for survival and beyond.
There are many answers out there. The challenge is "which ones are the right ones?"
Some of these will carry a certain bias as it is written by those who want to sell to you.
As a good friend once told me, "All brokerages are the same until you look at them."
One of the quickest ways to lose money is by not paying attention to it no matter
who you are paying to pay attention to your money. There are many "costs" you will
see and maybe NOT see in your agreement and both can hurt you.
Risks include those of normal market fluctuation and change from the value of stocks
and other "instruments" rise and fall with the economy and business conditions. This
is the "wild card" for retirement as you can only guess what will happen. When you
know for certain it is either Insider Trading or other activity most likely punishable by
There are others you can see and be told. These are the "costs" that you pay for in a
direct and indirect manner. Often, when you buy or sell securities there is a "fee" that
is added to your transaction costs for the brokerage to perform the transaction. Do
not assume all fees are the same. Look at what the expenses are for the investments
you make as that comes out of your profits without showing up on your statements.
Some funds are less than 0.5% while others are 3% or more which diminishes what you
would have received as profits to your account. The more complex the management
if the higher the fund costs should be expected to be, but not always. Some funds
charge comparatively high fees yet do not require close management. There are many
times when the ability to earn 2.5% is challenging yet you can lose 2.5% just from the
management fees. Multiply that by a few decades and consider your diminished gains.
Some companies offer a professionally managed portfolio for a percentage of your
investments in that month, quarter or year. Shop around as some will charge up to
7% NOT including transaction fees while others charge below 1%.
Articles and other information is available at: Retirement