Comments on: Retirement Planning in Your 20s, 30s, 40s, and 50s

By: muddlehead

muddlehead — Sun, 22 Jul 2007 00:57:49 +0000

in your 20’s – save. 30’s – save. 40’s – save. 50’s – save. 60’s – enjoy.

By: Matt

Matt — Sat, 21 Jul 2007 22:55:30 +0000

This all looks good to me, though I would add getting long-term care insurance in your mid 50s. I was talking with a LTC broker last week for the software I’m developing and it turns out that the way they finance the coverage is by locking your payment amount when you enroll and then increasing it for new enrollees by 20-30% every 18-24 months. So the long-term expense of getting in late (if you want that insurance) is much higher if you plan on living to be in your 80s or 90s.

Also, Kitty, on stocks, I think that at retirement age, you’ll definitely want to be more than 35-40% in stocks, unless you have a substantial nest egg (the average amount working 55 year olds have saved for retirement is $60,000), because bonds and cash just can’t generate the kinds of returns that stocks can over time. Remember, it’s going to be much more common for folks to live into their 80s and 90s.

I recently came across this great list on ways to stay financially motivated:

1. Write a list.
2. Set (specific- time and place) financial goals.
3. Create concrete and personal reasons.
4. Create mini goals.
5. Keep a daily financial journal/blog
6. Don’t keep it a secret and involve the entire family.
7. Keep your goals visible.
8. Chart your progress.
9. Join financial communities.
10. Be patient.
11. Reward yourself

Anything you would add to this?

By: fin_indie

fin_indie — Sat, 21 Jul 2007 16:40:26 +0000

Unfortunately, it doesn’t address people that want to retire early — they should have had a side bar at least that described how to change the path if you want to retire in your 40s or 50s.

By: Kitty

Kitty — Sat, 21 Jul 2007 15:24:14 +0000

I would also say have fun in your early 20s and have children (if you really want them) in your mid-20s and no later than your late 20s. You wouldn’t have as much energy or free time later on for fun later on. If you put off having children until you are in your 30s, you just might not be able to have them at all. I’ve never regretted having fun in my 20s and spending most of my money back then. I still regret not having children in my 20s.

There are important health reasons for women to have children before the age of 30 – both for the mother’s health and child’s health. Health is more important than money. Money can pay for fertility treatments, but they cannot guarantee success. Money can treat a child with Dawn, but wouldn’t it be better to have a healthy child? And why not reduce one’s risk of breast cancer later in life by having children earlier? Even if it is a small reduction in risk (in absolute terms), isn’t it worth it?

In terms of investment, I think the percentage of investments in the stock market should go down with age. I read somewhere that 100-age is the right formula for the percentage of your money you want to have in stocks. The reason is that if you look at historical stock performance you find periods of 20 years or so that had no growth. If such a period starts when you are 50, you want to be protected.

By: JLP

JLP — Fri, 20 Jul 2007 20:13:07 +0000

Moneymonk,

I quit where the Business Week article quit. However, hopefully by your sixties you’re retired and living the high life (notice I didn’t say living on High Life).

By: Moneymonk

Moneymonk — Fri, 20 Jul 2007 20:03:52 +0000

I say have fun in your 20s. Make all the miskaes and learn from them. (This may cut down on mid life crises) Buckle down in your 30s, once you have a career and family no time for stupid mistakes.

I’m glad I had my fun in my 20s. By 28 I started taking personal finance differently. I started buying insurance and investing my money. Sometimes it’s OK to make mistakes other times it’s not.

So JLP, what happens in your 60s?