Expert Tips to Get Ready for Retirement
Updated on May 23 2019
Many Americans have not saved enough to keep their lifestyle after retirement. Financial author and Chief Income Strategist at the Oxford Club Marc Lichtenfeld provides some helpful tips to help you prepare for your last third of life.
Lichtenfeld has made a name for himself as an individual who has had an ‘unconventional’ financial career trajectory. He originally aspired to be an actor, but didn’t want to be a starving actor, so he spent his free time studying the markets and learning how to trade and invest. He discovered he had a knack for finance and approached a firm in his neighborhood and said, “I’ll tell you what, I’ll work here for free for a week and at the end of the day on Friday we’ll chat.” He got the job and financial business journalism became a passion he has been sharing with readers ever since.
Approaching Retirement with Confidence
Many seniors are anxious about finances in retirement which is why Lichtenfeld’s latest book, You Don’t Have to Drive an Uber in Retirement strikes a chord with so many Americans. The book walks readers through how much money you actually need in retirement, how to maximize Social Security payments and 401k benefits, how to cut travel costs, invest in real estate, among other tips. In this interview, Lichtenfeld discusses how to prepare for retirement with confidence.
Tips to Get Ready for Retirement
Lichtenfeld says that people in their 50s and 60s are often in crisis saying they need to “make money fast.” The problem with this is that making money fast is really hard. He comments:
“There are plenty of people who lived the ‘right way’ their whole life and then got hit with unexpected medical bills, the crash of 2008, or an adult child who drained them financially. Life sometimes throws curve balls. Life happens and it’s how you react that counts.”
Here are a few tips Lichtenfeld recommends to organize your finances in preparation for retirement:
1. Stay in the market.
Markets go up and down and you need to stay in for the long-haul, depending on where you are in your investment time horizon. “People who were hit by the 2008 crash would have made their money back by 2013, but many people pulled their money and lost as a result,” he notes. The long-term is 7+ years, preferably longer. Historically, the market has gone down only seven times in rolling ten-year periods since the 1920s. “In other words, over rolling 10-year periods, you made money 92 percent of the time,” Lichtenfeld notes.
2. Keep money safe in the short-term.
As you get closer to needing money, take the money out of the market strategically and put it in safe investments, such as CDs and treasuries, where you’re not going to lose. Be safe with investments based in your unique needs for your given age. If you are approaching retirement, you need to revisit your strategy with more conservative investments.
3. Understand how much health care is going to cost you.
Healthcare is one of the largest expenses in retirement today and many Americans are not preparing for the large out-of-pocket expenses that will be a reality in their retirement years. For a 65-year-old couple, healthcare will cost a quarter of a million over retirement. Being cognizant of potential healthcare costs will help set you up for financial success. Lichtenfeld says it’s important to “keep in mind future possible costs” as you “need to have an eye on what your costs will be compared to your costs today.” He discusses there are costs to consider for your future-self that you’ve never had to worry or even think about as your younger-self.
4. Be diligent about saving, investing and keeping yourself healthy.
Keeping numbers one through three in mind, it’s important to be conscientious about saving, investing and keeping yourself healthy. Lichtenfeld notes that “even if you’ve had a run of bad luck, doing your best to put as much away each month toward savings or investing, will help you grow a nest egg that will help you be successful.” Basically, being proactive financially and leading a healthy lifestyle can help you prevent both money and health surprises.
Be Realistic About Your Retirement
According to Lichtenfeld, it’s important to think about what’s going to happen when the money stops coming in when you’re in your retirement. He notes:
“You need to discover what you have and be proactive. You don’t want to find out that you don’t have enough way too late in the game. You may have to cut back. My dad used to say, ‘I’m going to have to get used to living on ¾ of my income.’”
He furthers that it’s important not to worry about the market and check your balances every day. Checking-in once a quarter is plenty. Some people will benefit from looking at their balances even less frequently.
An expert fiduciary financial advisor can help you assess your finances and create a financial plan that will carry you through retirement.
About Marc Lichtenfeld
As one of the world’s leading income experts, Marc Lichtenfeld is often featured on national media outlets, including The Wall Street Journal, MarketWatch, CNBC, Fox Business, Bloomberg Radio and National Public Radio. A featured speaker at investment conferences, he has spoken about dividend investing at meetings all over the world.
Marc is currently the Chief Income Strategist at The Oxford Club – one of the country’s oldest independent financial publishing companies. He’s the Senior Editor of free e-letter Wealthy Retirement, monthly newsletter The Oxford Income Letter and several trading services. His content reaches more than 500,000 people each day.
Find an Advisor Near You
Advisors by City
Find advisors located in the cities nearest you.
Need a financial advisor?
100% free consumer service