Let’s face it, retirement usually comes with a lot of curb appeal. However, those are the public places that we allow other people to see and experience. They are all very real parts of retirement that you can’t just paint or wallpaper over, hoping that those thoughts and feelings just go away. In other words, the thoughts and feelings that hold everything together. As people go through their first few years of retirement they try and rationalize that feeling out of sorts, less relevant, or isolated isn’t a big deal and that those feelings can just be shrugged off. She retired early, had plenty of money and lived in an exclusive subdivision. Therefore, take the time to look for cracks or leaks in the key areas of your life. Find an expert who can help you develop concrete plans for the non-financial aspects of everyday life in retirement. Working through issues of fear, resentment, or regret won’t happen overnight. Retirement can be a beautiful home both inside and out, but it will only happen if all the rooms of our life are open to the planning process.
Everyone knows by now that saving for retirement is incredibly important. What you may not realize is that what you do with the money you save will have a huge impact on how much you need to save. If you can invest your retirement funds in such a way that you get the best possible return, you won’t need to save nearly as much in order to hit your goal. And if you don’t commit any of these retirement investing mistakes, you’re more likely to get the returns you need.
Timing the market
“Buy low, sell high” is probably the best-known investing advice out there. Unfortunately, it doesn’t come with an instruction manual. Investors who try to use this advice by buying at what they think is the bottom of the market and selling at the top inevitably make less money over the long haul than investors who simply buy quality stocks and hold on to them. And many of the people who try timing the market end up losing a lot of money, which could be devastating if you wipe out your retirement savings in the process. Choosing the right buy-and-hold stocks is easiest done by buying shares of an index fund instead of trying to pick out the right individual stocks.
Overly risky investments
When you have decades to go until your planned retirement date, you can indulge in a little risk knowing that you’ll have plenty of time to let your portfolio recover. But once you get within shouting distance of retirement, you’d better start shifting your investments away from highly volatile stocks and into calmer waters. You can figure out how much of your retirement savings should be in stocks versus bonds by subtracting your age from 110. The resulting number is the percentage of your retirement portfolio that should be in stocks. For a 50-year-old, 110 minus 50 gives a result of 60, so he should have 60% of his retirement funds in stocks and the other 40% in bonds or similarly low-risk investments.
This is a slightly more aggressive allocation than some financial experts advise. However, Americans are living longer than ever, which means they’ll have to fund a longer retirement, and they have more time to ride out the stock market’s lows. That said, make sure you gradually move money out of stocks throughout your lifetime; keeping too much money in equities late in the game means…