We continue our journey, by examining investment time horizon. Clearly, it is better to begin planning for retirement at age twenty, rather than at sixty. But, in the end, a ‘late plan’ trumps a ‘no plan’.
Since the 50-70 year old demographic, represents a major slice of our population and has the least time to ‘get it right’, we will first study this group.
Apart from your age, you should keep in mind a few other factors:
• Financial profile: can you afford to pay-off your mortgage, credit card and other major debt, or, fund a longer than expected life-expectancy (having been blessed with good genes and/or a healthy lifestyle)? How much do you have in investment assets after paying-off these?[*Alarming statistics: (1) About 80 million Americans will retire in the next ten years, most of whom will be unprepared to meet their retirement needs, let alone their wants. (2) Today, the average re-tiring American has less than $50,000 accumulated for retirement.]
• Social Security dependence: you can only truly maximize your SSI retirement income, by waiting until you turn 70. Before then, you will be penalized proportionately, with reduced benefits, although full benefits will begin at 66/67. How dependent are you on these benefits just to survive? For some, it may be a long way to 70. And for those close to 70, they may find these benefits insufficient to support their lifestyle. Do you have supplemental income sources?
• Health insurance coverage: remember, you only qualify for Medicare at age 65. Attaining this milestone may finally allow you to leave your job, if your primary reason for remaining employed was to benefit from employer-sponsored health insurance. What is your current status?
• Post-retirement goals: if you still work and enjoy your job, surely you should continue and add to your nest-egg. But, retiring will provide time for hobbies, community/charity work, family and dear friends. Only you know how these rank in your life. Can your current finances serve your desires?
• Unforeseen events: you may be prematurely forced into retirement, through retrenchment, being fired, or health issues (yourself, your spouse, a parent, a child).
Are any of these possibly looming up? Do you have a contingency plan, or might you be ruined financially if any occurs?
Hope for the assumed ‘hopeless’
For those 60+ and late to retirement planning, there is hope. You might:
– Obtain a reverse mortgage if your primary residence is not mortgaged. (This is a loan offered by financial institutions with repayment of interest and principal due when you sell your house, when the remaining spouse occupying the house also dies, or when you both move out of the house.)
– Return to the workforce.
– Drastically slash your spending habits and lifestyle.
So, where are you in your journey? Life consists of a series of choices made each day. “Vigilet, carpe diem, tempus fugit immitis vel a probus amicus”: “Stay alert and maximize each day, because time can be a heartless thief or a generous friend” (Kurt F Matthew, Jr)
• The Last Chance Millionaire (Douglas R. Andrew)
• Late Bloomer Millionaire (Steve Schullo, Dan Robertson)
• Money Master the Game (Anthony Robbins)
*Statistical source: The Last Chance Millionaire (Douglas R. Andrew)
Fortune Favors The Prepared Mind, an Article by Kurt Matthews Jr, Examining the Investment Time Horizon. Find factors That Will Help You Plan for Retirement