The Ultimate Retirement Guide for 50+ summary

Like all sound financial decisions, retiring is all about using your head, not your heart. That’s easier said than done. By the time you retire, you’ll likely be a parent and possibly a grandparent. That means you’ll be used to putting others’ interests ahead of your own and providing for loved ones. But if you want to retire in comfort, you need to start looking out for yourself.

The key message here is: Retirees with financially dependent children need to set ground rules to guarantee their financial security.  

If you’re still working, you’re in a strong position to boost your retirement package. This makes saving a top priority, but lots of future retirees struggle to come up with the money they feel they’ll need later on. If this sounds familiar, don’t worry, there’s an easy fix. All you need to know is what to cut. 

The key message here is: You can save a lot of money by making smart decisions about the car you drive.

Old age was once synonymous with failing powers and dependency. Today’s pensioners are different, and nothing reflects this better than the ideal of aging in place – remaining in your home for as long as possible. Who, given the choice, wouldn’t want to continue living in the house associated with their most cherished memories!

No wonder, then, that so many retirees are adamant about staying put. But here’s the catch: as attractive as this ideal is, you might be better off moving to a smaller home. 

The year you quit work is a big deal for you, but it’s business as usual for your investment portfolio. Just because you’re retiring doesn’t mean your stocks are – they have another 25 or 30 years of work ahead of them! But here’s the issue. As you get older, you naturally become more risk-averse, and that means it’s more tempting to pull the plug and sell when your stocks take a nosedive. This, however, is a temptation you should resist. 

The key message here is: Patience pays in turbulent markets even when you’re retired, but you need an emergency fund to cover this strategy. 

How long will you live? Well, if you’re in good shape in your early 60s, you should assume you’ll make it into your 90s. If that sounds crazy, take a look at the odds. A 65-year-old woman in average health has a 44 percent probability of living to 90. A couple, both 65 and in average health, meanwhile, has a 62 percent probability of one spouse being alive at 90. 

In other words, if you don’t have a medical condition that is likely to limit your life span, it’s important to take the long view when you’re planning your retirement. 

Longevity statistics suggest you should plan for a multi-decade retirement, and this means that you’ll have to take inflation into account. As we’ve learned, that’s an argument for owning stocks, which have a higher chance of generating inflation-beating gains. Bear markets, however, can cause sudden falls in the value of your stocks, so you can’t draw a steady income from this kind of investment. Quite a quandary, right? 

But what if there was a way of combining the best of both worlds – stability and the managed risk of stock market investments? Well, there is! 

OK, now that we’ve gotten a handle on planning for retirement, it’s time to tackle a thornier subject –  illness and death. These are difficult topics, of course, and it’s easy to put them off for another day. But if you aren’t proactive now, you’re going to leave your loved ones with a lot of heartache and a financial mess to boot. To avoid this, you need to get your documents in order. 

The key message here is: You can protect yourself and those you love by creating two vital documents – a will and a living revocable trust.