Business Week recommended the following strategies for one's Forties and I included my brief comments in blue:
- Feed your escape fund. Continue to save ruthlessly at 20% or more of one's salary. I like the recommendation of putting the amounts from paid off loans into savings.
- Monitor your investments. Check that the one's investments are growing at least 10% per year. Although not technically correct, I include the amounts I save in the "return" calculation.
- Refine your retirement plan. I fully agree that most people should plan on needing 100% of one's final take home pay. Also, I plan to target on the low side of withdrawals (i.e. 4%) for the first couple years.
- Buy one's retirement home and use it as a vacation home. At this time, we are planning to continue living in our current house after retirement. To me, it makes more sense to buy a retirement home after selling one's current home.
- Start transitioning to post retirement work style. I would add to be choiceful on what one does. There will be ample opportunities and ample requests once people realize a person is retiring.
Overall, I would summarize the forties as "maximize income to get maximum savings and investment growth." I also would include having the right additional insurance - i.e. disability, auto, and renters/homeowners.
For more on Reaping the Rewards , check back every Friday for a new segment.
This is not financial advice. Please consult a professional advisor.
Copyright © 2007 Achievement Catalyst, LLC
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