Managing your trip in a risky environment
Risk is sometimes the elephant in the investing room, especially for retirees. People understand stocks as ownership and bonds as debt, but risk is hard to grasp and instinctively dangerous.
Later Living has recently published four posts on risk. Risk and high returns go together, so retirees who want high returns must deal with risk. Here are the four earlier posts knit together into one risk story: Continue reading
Afternoon at a long-term care facility
Retirement might be easier if spending needs stayed nearly constant from year-to-year, but they don’t. Long-term care, motor homes, family members in need, and other special plans require lumps of cash at particular times. Continue reading
When retirees get to their middle 80s, most don’t want to or can’t stay physically active. Instead they relax, take up hobbies or devote full-time to television. Their conversations often concern their health problems. But there are exceptions, like Ms. Ola Coombs.
Ola had always wanted to have her own quilt shop and she got her chance at age 79. Ola’s Quilt Shop in Lavonia, Georgia opened in May, 2006. This year Ola will turn 87. Continue reading
Investment risk is good in that it accompanies greater long-term wealth but it is bad if investors sell during a downdraft. Stocks are riskier (more volatile) than bonds yet offer more long-term gain.
Should retirees dial back their risk exposure to, say, 30% stocks, as is sometimes recommended, or can they carry much more risk, perhaps up to 70% stocks? The answer follows their goals and plans. Continue reading
Risk in stocks and bonds–Seventeen years of returns
When should someone retire? The answer may be fraught with danger if the retirement portfolio is overly weighted to stocks or other risky investments. There is one small window of time surrounding the retirement date in which sharp declines in stock values can ruin retirement. Continue reading
Risky? These women compete in a roller derby where they skate, block and score on a concrete floor. There is risk—in the sense of loss or injury. “No pain, no gain,” analogizes the SEC, which is almost a sports metaphor: play hard, risk injury and you may win.
There are standard narratives about investing that lead people to particular strategies. Risk, we’re told, infects all investments, and it is often viewed as potential injury or loss. Continue reading
There are so many news articles about poor retirees that it would be nearly impossible to count them. In opposition to that trend is an opinion article (may be behind a pay wall) in Friday’s (Jan. 24) Wall Street Journal. Sylvester J. Schieber and Andrew G. Biggs, both of whom have deep experience with Social Security, report a serious data problem with many estimates of retirement income.
Here’s the thesis: the common narrative “about the declining income prospects of retirees is not true.” Continue reading
Our investment posts have come to a natural break point. In 2011, I began writing about investments in retirement, and some days ago I posted a piece describing how much young workers need to save for retirement. Let’s review and celebrate ideas about investing. Continue reading
Our children and grandchildren are urged to save and invest for retirement. Their success depends on saving regularly and investing well. Success also depends on how long they work, how much they save, and how successful they are in their careers. Today we look at those three elements.
I have been working on a financial model of retirement savings to learn the principal drivers of successful retirement accumulation.
Here are the main results Continue reading
Most of us would like to help our children and grandchildren prepare for the changing retirement landscape. Pension plans are under siege and passing away. Although many current retirees receive generous pensions, our children and grandchildren are not likely to share that good fortune.
Their retirements will likely depend on Social Security and whatever income they can piece together from retirement investments and encore careers. To help, we can point out reasonable investment goals. Today we’ll see how Social Security influences investment goals. Continue reading