Do you have longevity in your family? Many people who are planning for retirement or who are already retired aren’t factoring in how long they’re likely to live. Don’t risk underestimating how much you will need. Recent news reports suggest that newborns in developed countries now have a life expectancy of 100. Most of us older folks should plan on a life expectancy of 95. If older generations in your family have lived a long time, you’re more likely to do so. Even those whose ancestors dropped off early may still live well into their 90s or beyond. So, whether you’re working age or retired already, even though the notion of living so long may be abhorrent, it’s important to plan financially for a long life. In addition, inflation also needs to be factored in. Even modest inflation could mean that a retiree’s cost of living could double over the course of a long retirement. This could result in substantially diminished purchasing power, risking an ability to meet your financial needs later in life.
Smart Money Tips
- Pay some attention to your investments – but not too much. When the investment markets are steadily declining, the temptation to check on your investments all the time can be overwhelming. The same goes when gains are being enjoyed. It must be delightful for many to find out how much wealthier they are after a recent advance. I speak with people all the time who look at their investment balances every day, if not several times a day. They need to get a life, because anyone who constantly checks up on their investments is probably going to cause themselves a lot of unnecessary angst which can lead to making a lot of unwise changes to their investments. I think a monthly look-see is just fine, quarterly is better, but life is too short to obsess over your investments all the time.
- Don’t leave home without your umbrella (insurance). One of the most common gaps in insurance coverage is umbrella liability insurance. Also called a Personal Liability Umbrella Policy (PLUP), it picks up where your homeowners (or renters) and auto insurance leave off. Simply put, umbrella liability insurance can protect you from the legal costs of a lawsuit (which alone could wipe out most people) as well as any settlement costs up to a specified limit. Umbrella policies generally protect you and other household members from most lawsuits arising out of your personal activities. It doesn’t cover job-related activities. The standard policy typically provides $1 million in coverage. In recent years many experts are recommending coverage of at least your net worth which would cover higher income, investments, vehicles, and home equity.
Food for Thought
The art of living easily as to money is to pitch your scale of living one degree below your means.
-Henry Taylor
Money Can Be Funny
What some people mistake for the high cost of living is really the cost of living high.
-Doug Larson
Word of the Week
battologize (ba-TOH-low-djahyz) – To repeat something over and over again needlessly.
Origin: From the Greek battalogos, which in turn comes from Battos, a character in Herodutus’s “Histories” and logos, meaning “word.”
Have you noticed how members of the White House, Congress, and the Fourth Estate just battalogize the same arguments about nominations, leaks, and the press every time their mouths open?