Bill Losey, author of Retire in a Weekend! The Baby Boomer's Guide to Making Work Optional, says retirement doesn't have to be a stressful, daunting task. All it takes is a little planning.
How can one retire in a bad economy?
Control your emotions. Take a deep breath. During every volatile period there is always a cycle of greed and fear. Those are the two things that move the market. We have periods where the markets get ahead of themselves, and investors become too optimistic, and other periods where investors begin to panic and become overly pessimistic. We are obviously in the throes or very close to the latter scenario. This volatile period will pass like all the others have.
What are some financial and retirement resolutions for people in their 50s and 60s?
First, if you haven't maxed out your 401k/403b contributions at work and your age is 50 or over, you are eligible to take advantage of what is known as the catch-up provision. In essence, if you haven't saved as much as legally possible every year you've been working, you are able to contribute an extra $5,500 per year (over and above the legal limit of $16,500) into your retirement plan in 2010. Next, if you have a spouse, family and assets to protect, Investigate long-term care insurance that protects you and your family from the emotional, physical and financial pain from a health issue. Third, start paying down nondeductible debt such as credit cards and auto loans. Try to be debt free, perhaps with your mortgage being the only exception, by the time you retire. Review your investments and asset allocation. Make sure you're not too heavily invested in equities (no more than 50 to 60 percent) or your own company stock (no more than 10 percent). Finally, consider accumulating up to three years of income in savings, CDs, money markets or treasury bills. This is where you should start taking money when you retire.
Give some tips to starting the new year debt free.
First, make a budget to control frivolous expenses and redirect the money you save to pay down debt. Next, get another job. Having more money will help you reduce debt more quickly. Third, sell stuff. The Internet has proved that everything is worth something. Don't be surprised if you have a few hundred dollars or more worth of stuff sitting around Building wealth, not reducing debt, should be your ultimate objective.
What are the top money mistakes?
Not getting in the habit of saving money at an early age. When I talk with people in their 50s and 60s, they wish they had saved more money and started saving earlier. Another big mistake is people retiring from work when what they really want is a break. A free 30-page report, "The 10 Biggest Mistakes People Make When Retiring & How You Can Avoid Them," is available for download at www.MyRetirementSuccess.com.
Dawn House
