We spend decades preparing financially for retirement—and yet we give scant thought to what we'll do with all that free time.
FUND YOUR IRA—FOR 2017. This time of year, folks are exhorted to get their IRAs funded for 2016 before the April 17 tax-filing deadline. That’s a good idea. But if you want to get the most out of your IRA, you should also make your 2017 contribution. That way, your money will be invested for longer—and there’s the potential for even more tax-advantaged growth.
IN EARLY 2005, when Hannah was age 16 and Henry was 12, I took them out to a local diner and told them exactly how much financial help I’d provide. I would make sure they graduated college debt-free. I would seed a retirement account with $25,000 and a house-down-payment fund with $20,000. On top of that, I’d give them $5,000 upon graduation, plus another $5,000 toward the cost of a wedding or at age 30,
WHEN I BOUGHT my small rowhouse in Philly, I was swept up by the idea of homeownership. Like many of those I talked with at the time, owning meant no more wasting money on rent, plus it was a great no-risk investment.
Six years later, whenever I hear that friends are considering buying, I’m more cautious and often advise holding off—or at least peeling back the onion, so they’re aware that buying a home is rife with tradeoffs and not obviously “the right thing” to do.
A CLIENT WAS IN OUR OFFICES the other day, grilling one of my fellow financial advisors about some investments in his diversified retirement portfolio. He just couldn’t understand why we’d keep certain securities that hadn’t recently performed well. He kept citing “stuff I read” and “all the experts” as the basis for his concerns.
I wasn’t part of the conversation. But here are three points I would have made:
1. Those experts don’t know a thing about you or your situation.
Jonathan Clements is the founder and editor of HumbleDollar. He spent almost two decades at The Wall Street Journal, where he was the personal finance columnist. His latest book: How to Think About Money.