Smart Retirement Planning For Every Age

Solid planning and the right safety net will ensure that you enjoy your golden years

the college fund? “You may not be able to do everything. Figure out your priorities,” advises Wright.

The Advice For Your 30s
A portfolio for investors in their 30s should be moderately aggressive, seeking above-average growth with a long investment time horizon. This portfolio will typically hold 80% equities and 20% fixed income securities. Depending on your situation, the portfolio for a family like the Whites might break down like this: 22% large-growth, 25% large-value, 6% mid-growth, 7% mid-value, 10% small-value, and 10% international stocks, plus 7.5% short-term government bonds, 7.5% intermediate government bonds, and 5% high-yield bonds. This portfolio can experience volatility and, “the investor should be patient, able to withstand unexpected changes in market value,” says Wright.

In other words, you may need to put your seatbelt on for what could be a bumpy road. Hopefully though, in the long run, the ride will be well worth it, as you reap the rewards of growth.

Ideally, a 10% to 20% allocation in investment real estate would also be appropriate for someone at this age. “The goal is to have a properly diversified portfolio,” says Wright.

40s
After turning 40, Gay and David High realized that they weren’t prepared for retirement. Now both 41, the Norfolk, Virginia, couple is scrambling to recover from some unfortunate life circumstances and some poor financial decisions.

The Highs have two sons, David Jr., 12, and Derrick, 8. David Jr. was born nearly four months premature with his lungs not fully formed. Because of his condition, David Jr. spent his first four months in the hospital, his first three years on a heart monitor, and battled a host of medical ailments until age 10. He now suffers only from asthma, but the cost of several surgeries and the oxygen he needed to survive was not fully covered by medical insurance. David’s care left the Highs with more than $15,000 in medical bills—a tall order for the couple, who were both in the Navy at the time. Their military salaries couldn’t keep pace with the $1,400 rent, $400 utilities, and other monthly costs for a family of four living in expensive San Diego.

It wasn’t long before they damaged their credit by running up their credit cards paying household bills. “It wasn’t that we were using credit for leisure stuff,” explains Gay. “We had to pay our bills.”

As they struggled to meet their financial obligations, the Highs took small steps to improve their future. Gay retired from her job as a Navy general technician in 1997 to attend nursing school, working part time when she could. David, who worked as a ship’s serviceman, transferred to Norfolk in 2001, which offered the family a more affordable standard of living. Two years after the transfer, they were able to purchase a small home and David retired from the Navy.

Using their combined military pensions of $36,000 a year, the Highs are determined to make up for all of the years they weren’t able to save. David joined the Merchant Marines, earning $30,000 a year, and

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