If you’re worried that your retirement investment plan is adrift, these rules can help steer you in the right direction.
Rule 1: Pay yourself first.
Many investment professionals start their preretirement pep talk with the same three words: “Pay yourself first.” This includes contributing the maximum amount possible to your 401(k) plan and investing additional amounts in IRAs and mutual funds through automatic payroll deductions.
We’d like to think that our parents are invincible. After all, they are part of a generation that continues to push longevity expectations higher. More likely to see their 80th birthday than their parents, they approach turning 65 as just another milestone (65 is the new 50, right?).
Despite the trend toward longevity, you and your siblings should talk with your parents about their financial future, even if they are only in their sixties. These discussions should cover, at minimum, long-range housing options, long-term care insurance, and wills and living wills. “Frequently, the first conversation happens when there’s a crisis,” says Elinor Ginzler, author of Caring for Your Parents: The Complete Family Guide. “By then, people are tired, physically and emotionally—and possibly financially,” she emphasizes.
Never give out personal information over the phone, on the Internet, or in the mail unless you originated the contact.
Would you buy a criminal an HDTV or a house? My guess is no. Unfortunately, last year 8.4 million people like you and me became victims of identity theft, unknowingly funding a con’s appetite for gadgetry, exotic trips, and even a high-priced home. In some cases, the delinquency stretched beyond what victims might find on a credit report: some are shocked to discover that, in addition to the financial fraud, criminal charges are posted under their names. What’s more, undoing all this takes a huge amount of time. So what can you do?
Investing too often seems like an unsolvable mystery riddled with myths that keep women from putting their money to work. If you fall prey to these myths, your savings will not earn the returns you deserve, and you will miss out on the professional advice to which you are entitled. Just ask Sima Desai, MD, a section chief and associate program director at Oregon Health Sciences University in Portland.
