• Question
  • Retirement Advice From Someone Who Has Been Successfully Retired a Long Time

    Asked on 5/4/2006

    As I look back over the past decades, I found the following actions I took to prepare for retirement, although many of these actions I took were far before the actual retirement date. I mention them in case some of them may trigger thoughts to consider in your Web site.

    I was a believer in providing adequate insurance for my family to
    cover death, disability, or major medical problems. As I got into my late 50's and early 60's I started reducing my insurance because I didn't need the same level of insurance. In fact
    before I retired I had eliminated all my life and disability insurance. I believe a lot of people don't think of reducing insurance, and my company's insurance department personnel tried
    to talk me out of my plan, since their attitude was you should never reduce insurance coverage.

    I developed an investment program as soon as I started work after college. Even though it started very slowly, I wanted to prepare for my children's college expenses. My philosophy was to have a good balance between risk and reward.

    My wife's and my philosophy about debt was to never spend a penny on debt with the exception of loans for a home mortgage or investment property, new car ( no loans were made for used cars),
    and college student loans after they became available (after the third child).

    Our attitude toward debt was to hold off buying something until we could pay for it in full. We never broke that commitment.

    I annually reviewed my financial resources, starting in my 50s, vs
    retirement needs, using an end of life target date that remained fixed. The purpose of this exercise was to assure that I did not retire before the financial resources would be available to have a
    comfortable retirement.

    When long term care insurance became available, I reviewed it to determine whether I should sign up or self insure. I found that the choices of a plan that providers proposed as the most popular were opposite to my thoughts. Providers believed that having a
    relatively short period of no coverage at the beginning, such as 1-3 months and having an insurance coverage period of three years would provide the best balance of insurance coverage and cost.

    If I took the insurance, I believed the best coverage would be a period of 6-12 months of no coverage at the beginning and a coverage that would last the rest of my life. I looked at
    this as not paying for insurance when I had the resources to pay for care but to protect against a catastrophe that I was not prepared for.

    During the periods that I was able to make extra payments on my loans, I generally put half of my available funds in the highest interest rate loan and the other half in my investment funds. That way I was able to grow investments at the same time that I was
    removing my debt load. This allowed some of my mortgages to be paid off in half the normal period.

    Of course I had to remortgage when my children started college, but I was still in much better shape than if I had not made extra payments, because the extra money would have disappeared.

  • Categories: Asset Protection, Paying Off Debt, Retirement Planning, Budgeting, Long Term Care Coverage, Retirement Assets and Savings, How Much to Save?, Mortgage Refinancing, Work and Retirement, Housing


  • Steve 


    San Francisco, CA

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  • Thanks for your story on how you managed to prepare for retirement - it's great that your planning and prudent choices paid off. If you are looking for other ideas check out our holistic retirement calculator: https://www.newretirement.com/retirement-calculator/default.aspx

  • Login to rate this answer:   Answered on 6/29/2012
**All above answers are provided as general information only. No warranty is made regarding the fitness or accuracy of the information provided in this answer. You should seek advice from a licensed CPA, attorney or CERTIFIED FINANCIAL PLANNER™ as to your unique financial situation.