RETIREMENT PLANNING TIP
When not working isn’t an option, consider a part-time career as part of your retirement plan.
I tell people to find it before you fund it. In other words, identify what it is that you want to do and try to fund that. Many people don’t know why they want to retire at a certain age or what they’re going to do, so start identifying your passions now. I have a 50-year-old client who loves to ride bicycles. When he stops working full time he plans to work part time at a bike shop. He won’t earn much money, but what he earns will supplement his retirement savings. Plus, now he has a social outlet.
A lot of older people were under the assumption that they could retire at 50 or 60, but now they probably can’t, given what’s happened in the market. If you retire at 60, what happens if you live to 90? Even if you’ve got $2 million, if you start taking out $100,000 a year at 60 you have a 35% chance of running out of money before you hit 90. Most people don’t have $2 million, and when you have a choppy market like this one it destroys the plan. Plus, our lifestyles have improved. People have to be willing to rethink their plans.
INSURANCE TIP
Life insurance is for the living–not the dead–so plan your coverage around their needs.
Acquire as much life insurance coverage as you can afford while you’re relatively young and healthy. I tell my clients that life insurance is an expression of love. You’re making sure that if the unexpected happens your loved ones are provided for. Life insurance is a way of creating wealth, a financial foundation that is critically needed among African Americans. Regardless of the amount your employer is providing (usually equal to an annual salary), do not rely on this entirely. Leave a legacy for which you will be remembered.