To succeed in life, you need vision. You need to be able to take stock of your strengths, understand what needs to improve, find what really motivates you and harness that to be of service to others.

What I find most fascinating about working with people as we explore financial goals over a lifetime is how their perceptions of what’s most valuable may shift over time. We often start by discussing investment strategy, estate planning techniques, the nuts and bolts of financial planning. But often by later in life, the real value is in their relationships, interests and values. It was always there. But once you reach some of your tangible goals, there is more time to reflect on the intangibles.

Set Your Goals

Goals often change over a lifetime. I’ve organized some things that may be on your mind by age. But age is just a number. If something resonates for you, put it down as a goal. Remember to prioritize. You only have so much time and you want to be sure to make progress.

Planning in your 20s

Getting off to a good start in life is essential. Developing good money habits can create a lifetime of financial joy. Do you see anything in this list that you want to know more about?

  • How much should you contribute to your company retirement plan?
  • How much should you be saving outside of the company retirement plan?
  • How to build up an emergency reserve savings so that you have a safety net for unexpected expenses?
  • What’s the best way to start investing?
  • What to consider when getting married? Having a family?
  • Should you rent or buy a home?
  • When should consider saving for your child’s education? Will grandparents want to help?
  • How should you set up your filing system?
  • How much debt is realistic to take without hurting your lifestyle or financial future?
  • How to prioritize debt? Student loans?
  • If you have kids, do you have a will? Powers of attorney?
  • Have you thought about giving your time or money to an organization you admire?

Planning in your 30s

Now that you have some life experience, you can start to tackle some more complex issues. Do any of these sound familiar?

  • When should you consider making a job change? Is there anything to consider in the timing of a change? Money left on the table?
  • Is your child’s education funding on track? Are there tax savings you should be taking advantage of?
  • How to prioritize education savings, debt repayment, home remodeling, new car, vacation spending, saving for retirement?
  • Are you maximizing your company benefits?
  • Do you have enough insurance outside of work? Are you protecting your family and your assets?
  • How do you make sure the risk you are taking with your investments is appropriate?
  • What do you do if the markets drop significantly?
  • Are there tax deductions you should be taking?
  • Should you start your own business?

Planning in your 40s

You are mid-way through your working career. How are you doing based on your original goals? Do you need to take a fresh look at any of these?

  • Is your portfolio well diversified, consolidated, aligned with your values and risk tolerance, tax sensitive?
  • Have you considered the unrealized capital gains and losses in your taxable accounts? Should you be doing anything to reduce current or future taxes?
  • Do you need to review your estate plan? Have any of the people you named died? Do you need a trust now?
  • Is it too early to run a retirement projection? When is it feasible to consider making a major change?
  • If your kids are going to college, will you be eligible for financial aid? How can you help keep your kids from taking on too much debt for college?
  • Are your parents getting to the point where they might need additional help? Are you in a position to help them?
  • If you are self-employed, should you consider taking on a partner or selling the business?
  • If you get company stock benefits, do you understand how to maximize those benefits?
  • Have you thought about a more structured giving plan? Do you understand the tax implications?
  • Are you happy in your job? Should you learn new skills? Should you change firms? Careers?
  • Have you had a divorce or death in the family?
  • Do any family members have special needs?
  • How much should you help your kids financially without “ruining” them?
  • Can you afford a second home?

Planning in your 50s

Lots of times we see people lose patience with some of the things they don’t like about their jobs in their 50s. We have lots of discussions about how life could look different if they make a change. And how to not do something financially foolish. We see more transitions starting in the 50s. Do any of these apply to you?

  • Are you within five or ten years of retiring? Have you done a retirement projection to know what your next steps should be?
  • Will you get a pension? If so, do you know what options you’ll have to take out the money? Are there tax implications?
  • Are you thinking of retiring before age 59 ½? Are there special rules that would help you from a tax perspective?
  • Do you have company stock in a retirement plan? Are there special rules that allow you to have a different tax treatment when you retire?
  • If you are thinking about leaving your job, but you know you still need to work, do you know how much you’d need to make a year in a part-time position?
  • Have you thought about “retiring in place”—where you continue to work, but stop making retirement plan contributions to cut expenses?
  • Do you have a contingency plan in case you lose your job? Can’t work for health reasons?
  • What happens if your parents need more assistance? Have you talked to them about living options? Continuing Care Retirement Communities? Staying in their home with additional care? Moving in with you?
  • Have you diversified your portfolio sufficiently if you own company stock?
  • If you own your own business, do you have a succession plan?
  • Should you buy long-term care insurance?

Planning in your 60s

People are living longer and staying fit and healthy. The 60s can be a time of realizing new successes in your work life or a time for exploring more time with your family in retirement. It will almost always bring changes.

  • How should your investment strategy change as you phase into retirement?
  • How will you take distributions from your portfolio? Have you considered the tax implications?
  • Have you weighed your Social Security claiming strategy? When should you start taking benefits and how will that affect your spouse’s benefits?
  • Should you pay off your mortgage? Consider a reverse mortgage?
  • How will health care costs change in retirement? How much should you allocate for this expense?
  • Do you still need life insurance? Should the amount change? Up or down?
  • Should you roll over your company retirement plan at retirement or leave it with the company?
  • If you get a pension, should you take a lump sum to roll over or take an annuity?
  • Have you reviewed your estate plan recently?
  • Should you think about downsizing your home?
  • Are there borrowing issues you should think about before your retire?
  • Are you worried about running out of money in retirement? What have you done to plan for that? How would you adjust the plan if the economy got much worse?
  • How will your tax situation change after retirement? Have you ever paid quarterly estimated tax before?

Planning in your 70s, 80s and Beyond

70 is the new 60. Lots of people are choosing to work well into their 70s and even 80s. It all depends on your health and your mental acuity. And where you find joy!

  • Can you afford to give more to your kids or grandkids? Can you afford to take the grandkids on a special trip?
  • Do you know how to calculate your “required minimum distributions” from your retirement accounts? Should you give some of that to charity to avoid the taxable income?
  • If you need additional help, have you thought about where you would consider going and how you would pay for that? Do you have insurance that would help cover those costs?
  • It’s not uncommon to start experiencing some signs of dementia. Have you noticed that you are having more trouble recalling things? Have you thought about what would happen in your family if you experience cognitive impairment?
  • Have you had your most valuable personal property appraised recently?
  • Have you considered establishing a donor advised fund for charitable giving?
  • Do you know what geriatric care managers do? Do you think you might need their help?
  • Have you written down where your heirs can find your important documents and any online passwords?

Prioritize and identify your top three goals. That’s where you need to start. That’s where you’ll set your intention.

We all start with good intentions, but it’s easy to lose sight of your goals. Make a point of revisiting your progress quarterly or at least annually. Remember why you are making these goals your priority. How will they bring you joy?

Stories: It’s All About People—All Kinds of People

Now that you’ve thought about your own goal setting, let me share some of the comments I’ve heard from readers of my columns and blogs over the years about what’s on their minds.

I’ve heard from all kinds of people. That aspect alone was fascinating. Here’s some of what I heard, organized primarily by age groups. Maybe some of these comments will remind you of something you want to address.

The 20s (and sometimes younger)

“Sue, I am a 29 year old woman with $1,600 in an IRA. That’s all I’ve got saved for my retirement—my previous job had a pension plan that I didn’t stay long enough to qualify for. I have been able to save $10,000 in cash, but it’s just sitting in a savings account because I don’t know what else to do with it. I just qualified for my employer’s retirement plan. Goals include a wedding in the next two years and I’d also like to go to graduate school. I have a good full-time job with benefits, and am a good saver. I know a savings account isn’t the best place for me to put my money—I really hope you can help me strategize a better plan!”

“I am very interested in stocks. I am in the 10th grade. I am currently participating in an investment club. I was wondering if you had any tips, strategies, or ideas on maximizing profit. I am also in a nationwide investment challenge contest. Each group is given $500,000 of “fake” money to invest. My group was ranked third in the state and 35th in the nation, but things have taken a turn for the worse…Thank you very much for your time.”

“Dear Ms. Stevens, Perhaps it’s a little early for me to think about retirement, but I’d like to take advantage of this bull market. I am a senior in medical school with nearly no current assets.  In July, when I am an intern, I wish to start saving for retirement….Bear in mind during residency the pay isn’t much, but afterward I should be comfortable.”

“Hi Sue, I’m an avid do-it-yourself type, and I’ve been struggling for years to build a sensible portfolio of mutual funds and stocks. I began investing during my last year of college…With four painful years of experience (I’m 25 now), I’ve refined my goals but not my portfolio. The problems: I lack a focused core, my funds are unbalanced with respect to my goals, and I have too many funds leading to overdiversification….I’m committed to the Air Force for the next few years, so job security is high….I’d like to refocus my core holdings into indexes, as I’ve lost faith with active managers….It’s all detailed below for your amusement.”

The 30s 

“I am 30 years old, and I have a 401k to rollover into an IRA. There are so many funds out there, I’m not sure what direction I should go in, or how aggressive I should be. Everyone tells me I’m young and I should go all aggressive, but that makes me somewhat nervous. I know so little about investing, and a lot of the information I do get is foreign to me. …I would appreciate any advice.”

“Sue, Thought I would get your insight on the portfolio I am putting together. I am 35, married with a new baby. I am starting to invest for the long haul (my daughter inspired the need). I wanted to make sure I have my bases covered.”

“Dear Sue, My wife and I are faced with a common situation that I haven’t seen much advice for; namely, saving for retirement and our young children’s college education simultaneously.”

“Good evening, I am 36 now and my goal is to retire when I am 52. I have been saving for retirement since I was 18 (can you believe it??). I think I’m okay as far as saving, but I am not sure if I have the right mix of funds….The other thing I am worried about is the cost of health care when I am older. How can I do anything about that now? I am afraid that when I am no longer working and I have to pay for health insurance, it will cost me an arm and a leg.”

“Sue: I am a 34 year old investment banker in New York City. I have a substantial annual income and limited annual expenditures. I expect to be able to retain approximately $150,000 per year from my non-investment earnings….I would appreciate your thoughts as to whether my holdings are appropriate for someone in my position, especially whether I am appropriately diversified in my stock holdings.”

“Sue, Hi! I am a 35 year old Business Manager working for a large chemical company. Married with one child (soon to be two). I have four different retirement accounts: my current 401k, my former 401k, 2 of my wife’s former 401ks. I would like to consolidate some of these accounts…”

“Greetings Sue.  I am a 38 year old man, married, recovering from a financially devastating divorce from first marriage, bankruptcy discharged 2 years ago, a 7 year old daughter…. How would you clean up this portfolio….to get me where I’ve got to go?”

“Hi Sue, I am a 31 year old woman who received a good-sized inheritance a year ago after a painful year of nursing my grandfather through pancreatic cancer. Now that I’ve recovered from the shock and have gone through probate, I’m slowly trying to work out my asset allocation and correct imbalances in my portfolio as I learn more about how it all works.”

“I am 38 and my wife is 36; we are both college grads and I have an MBA. I manage a computer department and make about $80-95,000 a year depending on my bonus. My wife does not work, but will likely go back in some capacity in 2-4 years as a physical therapist….Do I have too much cash? How can I protect what I have? Do I need a trust? Why?”

“I have two “situations” needing help: my daughters and ours….My daughter has a master’s degree (Preservation Specialist), age 31 now. In 10/97 she was in a catastrophic bike vs MVA accident—multi-trauma victim including brain injury. Remarkable recovery, she lives independently, but she is currently underemployed and may remain so in the future….I am afraid to put her in an IRA as her future is not clear to 59 ½ . I am open to your advice in this delicate situation.”

“Hi Sue, I’m 37, single, and making a fairly unpredictable $200,000 a year. I’ve managed to accumulate $400,000 and would like to invest it for the next 13 years. At present I have no investments at all, and no definite plan….I really believe in the buy and hold approach to investing; I’m just having trouble with the first part. I appreciate your insight.”

The 40s

“Dear Ms. Stevens, I am a 48 year old high school teacher who is married to a self-employed general contractor. In 1979 I started a modest Tax Sheltered Annuity account with an insurance company. By the early 90s I had opened 4 IRA mutual fund accounts. I will also have my teacher’s pension. My husband recently started a SEP account. In 1997 I started a 403(b) account to which I contribute $5,000 a year. My portfolio is not the result of planning, but rather an accumulation of investments that have evolved over time.”

“Hi Sue! I am 41, married with 4 beautiful daughters. My wife is a home-maker with no outside income. I would like to retire at age 60. I have accumulated a solid amount of 401k savings and have it in mutual funds. One of the questions that no one ever seems to provide a straight answer on is whether someone at my age would be better off to put all of these funds into pure stocks. Obviously this is 401k money and I cannot touch it for many years to come. Often I wonder if I should sell off all the mutual funds and buy, let’s say, 8-10 BIG stocks (Microsoft, GE, Home Depot, Merck, Pfizer, Dell, Boeing, J&J, AT&T, etc.) Over the long run, I’m not sure what would be best since the money needs to be locked up anyway!

“Hi Sue, What timing! I stumbled on your column today as I start the investigative process of investing. I am 43 years old, married, one child that is 14 years old….Recently with the death of my mother I have inherited $100,000 and am starting the process of where to put the funds to get some growth for retirement (20 years away) as well as some college money for my daughter. This is all very new to me so any help you can give would be sincerely appreciated. The folks at our bank have a “financial planner” at the branch but she seems to be the age of my daughter and only has their products for sale so there seems to be a built-in bias. Help!”

“In the past I couldn’t resist advice—as you can see when you look at my portfolio….I got to this all-over-the-map point because I’ve only recently started paying attention to the money I inherited about 20 years ago. I’d had financial consultants and they’d wander on and off the scene. Someone new would take over or would cold-call me, have a great plan and I’d take some money and plunk it down….I finally woke up last year when the latest salesperson sold us an expensive whole life policy that we have since deep-sixed….My husband continues to be about as indifferent to the whole money thing as I was until recently. He lets me do whatever I want. Scary, huh?”

“I am 41 years old and unfortunately for me (my wife passed away) have received $700,000 in life insurance proceeds. I have 2 children, ages 7 and 10.  I am now in a quandary about future investments. My children receive $10,000 a year in Social Security survivors’ benefits. I have a reasonable income as well ($175,000/year). I would appreciate some thoughts on future investments.”

“Dear Sue Stevens: I am 48 years old and have been on Social Security Disability for the past decade as a result of injuries sustained in an accident. My annual income is $8,900. I am able to save only $50 per month, which I do religiously. …Given my situation, should I be more aggressive with my investments, more conservative, or somewhere in-between? Do I have too many funds? Any insights you have to offer would be greatly appreciated.”

“Dear Ms. Stevens: I am 43 years old and have an annual income of just over $71,000. Although I am single, I live with a same-sex domestic partner who is eight years younger than I am and earns about $32,000. I have about $90,000 of equity in the home; my partner is unable to put any money away for a down payment for our next home….Because I spent much of my twenties in graduate school and then in academia and because I later went to law school and switched jobs several times, I did not get an early start on retirement. I would be grateful for your suggestions on how to best change my current portfolio to achieve my investment goals.”

“To: Sue Stevens, My wife and I are 44 & 45 respectively and we have a 10 year old daughter. My wife and I are both working full-time. I am working in the auto assembly hourly division of Ford Motor Co, net yearly income $65,000. My wife is a teacher with 23 years of service and makes $73,000. My strategy has been to invest in good mutual funds with good long-term performance and ‘let it ride.’ I would greatly appreciate it if you could analyze our portfolio to verify that we are on track!”

“Dear Sue, I’ve worked for 20 years. I’m the Region Technology Manager for one of our 11 domestic regions. I will be 43 in March.  In addition to an annual salary, my company pays its management employees a bonus in stock each year. I am also eligible for stock options. Currently I have about 8800 options worth approximately $180,000. Some are nonqualified stock options and some are incentive stock options. Can you help us understand these and how they fit into our portfolio?”

“Dear Sue: It has come to my attention that most of my funds are indeed overlapped and have relatively high annual cost exposure. Yet I have held them for many years and have huge long-term capital gains exposure…. Being 48 years old, I feel I have a long time horizon ahead for my funds—20+ years. These funds are all taxable….Any help in this matter would be greatly appreciated. I think that there are a lot of us boomers that have inadvertently ended up with very concentrated portfolios with huge taxable gains(blame it on the great 90s BULL MARKET!) and are now looking at annual total real cost of ownership of mutual funds for the long haul.”

“Hi Sue! I’m a 44 year old divorced woman with two children ages 12 and 16. I’ve paid for my house in full. Long ago I established college funds for both of my daughters, so saving for their education is not a concern. I currently sold my business and will have $300,000 (after taxes) to invest…I’ve been taking an excellent money management class and am attending classes on estate planning too. I’ve been thinking about the following investment strategy. What do you think?”

“Ms. Stevens: Enclosed is my portfolio which is very scattered. I have broken most rules of rational investing by picking funds and stocks as I went along and had the money. I absolutely love GE! After reading many different types of articles, I desire to straighten out my portfolio. I am 44, married with one daughter, age 5. …Thank you for taking the time to review this odd array of equities.”

“I am 45 years old with one 17 year old who is going to college. I plan on retiring in 10 years…My stock options are sizeable. They are worth about $600,000. I could cash out with $80,000 if I left the company today. What should I do?”

The 50s

“My wife and I had been married for 18 years, and we were on our way to close on a condo on a golf course in New Hampshire. It was supposed to be a semi-retired lifestyle. Two hours before closing my wife told me (OOPs) she was pregnant and we now have a handsome 2 ¾ year old son, Slammin’ Sammy. I would like you to help me rebalance my portfolio so that I can help put my son through school and retire at age 59 or sooner.”

“Dear Ms. Stevens: You asked for it and here it is—one messy portfolio. I am in the process of evaluating and adjusting it and would appreciate all advice. I am married, 57 years old and currently self-employed as a consultant—not by choice. I was general manager of a company that was bought out. The new company brought in their new management. They continued my salary for one year. I live in a studio apartment in Alabama.  My wife works in Florida where we have a home and a rental home—also 4 grandchildren and an 80 year old mother-in-law who needs my wife to help her in daily living….I would appreciate anything you can tell me.”

“Hi, I am a 52 year old woman who was recently downsized after 28.5 years with my employer. The company was sold and new management wanted someone else. I earned about $80,000 annually, and while I will be going back to work part-time, there is no way I will find a job that will pay me even close to what I was making….I can’t afford to make any mistakes. Can you help me?”

“Dear Ms. Stevens, I’m 50, wife 50, and was previously a bank president at two banks, both bought out—giving me a nice option package. We have a $2.2 million investment portfolio. I’ve retired to play golf and assist my father (72) in his farming business. He has over 2,000 young pecan trees, so I’ll have to wait for my paycheck for many years. But, it lets me spend a couple of days a week with him, which I missed during my 30 years of work….My retirement planning assumes a 4% withdrawal rate, 8% return, 3% inflation and 85 year life span. I’ve run numerous financial plans. Everything appears to be on track for a comfortable retirement, but I always listen to someone with a broader view of finances.”

“Sue, I’m 58 and would like to retire in 2 years. We are a classic his/hers/ours situation because of a second marriage and children from each of our previous marriages who will inherit our individual assets. We really have 3 portfolios. What would you suggest we do to adjust our portfolios for maximum return, given the nearness of retirement?”

“Sue: I am 54, and my husband is 42. I have just this year completed treatment for breast cancer and so have gained a new view on life and reordered my priorities….I only recently started learning about asset allocation; prior to that I had collected funds without any long-term strategy…I would truly appreciate any comments or suggestions about our portfolio.”

“Dear Sue, I’m 54 and my wife, Catherine, is 51. We have no children though Catherine (and maybe me in weak moments) would call our cats, our kids….What do you think of our portfolio? I would appreciate your taking a look at the taxable and retirement pieces.”

“Dear Sue: Just finished reading your column and found it to have two very important characteristics: brevity and clarity.  Thanks!  My wife and I have the all too common dilemma of too many investments and too little time to learn what changes to make….I am 54, Susie will soon be 46. Our goal is to move to Chesapeake Bay and semi-retire as soon as finances permit. We continually ask ourselves, how much must we have saved to be able to semi-retire assuming an income of at least $50,000 after tax?”

“Dear Sue: My wife and I are both 53.  We are planning an early ‘semi-retirement’ starting this winter.  We live in Alaska and found our dream spot on the ocean six miles south of town.  Our only neighbors are bears and moose.  We have prepared retirement plans using online software. Are we diversified enough? Should we own more bonds? Do we have the right mix of funds?”

“To: Sue Stevens  Dave and I are both 58; he works as a USCG licensed captain and NAUI/PADI dive instructor and I am an assistant librarian. We live in an apartment that may be demolished in several years due to FEMA regulations affecting the Florida Keys (where we live). …Insurance is quite expensive here; we’re required to have wind, flood and homeowners….We realize our picture could be brighter. (We’ve spent many years in the Caribbean at much lower wages than the US.) However, we are concerned about allocation and balance as well as the total retirement picture. We would sincerely appreciate hearing from you.”

“Can you please help me – I am confused about where to invest now. My wife has been fighting ovarian cancer for over a year, and is doing well but the cancer is back.  I am no longer working as it is virtually a full-time job to support her, and the truth is that I cannot seem to focus well now anyway. I am 56 and about to start doing volunteer work at a cancer education charity.  Your recommendations would be deeply appreciated.”

“My husband is 63 years old and took an early retirement at the age of 55. I also took my “first” retirement at the age of 46. We re-located to Southern Oregon from Southern California. I took a part-time job that turned into a full-time position in a different industry from my prior occupation (banking). I took my “second” retirement just three months ago. My current age is 53 and I plan on staying retired. …I feel that in spite of our ignorance we have done well in the stock market these past few years. However, this trend will not continue and I am fearful of running out of money without properly balancing our portfolio. I do not want to be an 82 year old gray-haired woman living in a one room flat eating cat food for my only nourishment.”

“I am a 52 year old engineer and my wife is a 51 year old secretary.  All six kids are through college, out on their own and launched in their careers. We have both been down-sized a couple of times each in our careers and are concerned about unexpected health problems down the road which could reduce us to one income.  For these reasons we will continue to sock it away while the sun shines, even though the retirement planning models we’ve used indicate we do not need to invest as much new money as we are.”

From Hawaii: “I’m 58, divorced, plan on retiring at 65.  I will live on retirement plans of my ex-husband plus Social Security.  Hope not to use my portfolio.  Help, please!  Apparently I don’t know what I’m doing.”

The 60s

“Linda and I are both retired since January 1995. We live in our 5th wheel trailer and spend our time traveling around the US, Canada and Mexico. … I would appreciate any advice you can give my regarding my portfolio. I sometimes have a gut feeling that I may have too many holdings.”

“Dear Ms. Stevens: My husband Louis is 75 and does not believe in investing in the market so he has a money market account and has asked me to leave him out of my investment plans….I’m probably spending too much money….I am a tyther and sponsor a little girl in Cambodia and another one in Uganda, which I’d never give up because it gives me such pleasure.  However, I know that I need to examine and rethink my investment options in order to maximize my retirement plan as you so succinctly put it.”

“Dear Ms. Sue Stevens, My wife is 58 years old and I am 60. We both plan to retire when I turn 62 and my Social Security starts. The house is paid for, the children are married and on their own, and we have no debt. Our investments exceed a million at present and all the dividends are reinvested. 50% is in 401ks, 25% is in my pension, 3% is in cash and the rest is invested in equity mutual funds.  Our goal is to have an annual income of $90,000. Our biggest fear, of course, is in the selection of mutual funds that are not excessively risky and yet are somewhat reliable in producing the income we desire. We realize bonds alone won’t pay enough dividends and that stocks will have to be sold to make-up the difference each year. However, will the remaining stock appreciate enough to offset the sell-off and offset inflation? Downward spiraling toward poverty is as frightening as losses due to fund volatility!”

“Dear Ms. Sue Stevens, Having read your well-organized and well-written article, it is clear that I may be too diversified with too many funds with similar investment styles. I am 60 years old with possible retirement at age 65, but currently am in no rush. What needs adjusting in my portfolio? Am I too conservative, too aggressive or, as baby bear said, just right?”

“Sue, My wife and I are retired and are going to run into the problem of taking funds out of our IRA savings next year due to the 70 ½ age requirement. At the present time we do not need this distribution income. How should we handle the investment and tax issues?”

“Dear Ms. Stevens, On October 11, I will be Medicare age—you know—the big 65. My wife is 60 and a retired journalist. I would be interested in having my portfolio reviewed for balance, growth potential, improved income and just overall improvement. Any questions – or if you want to wish me a happy birthday – please call.”

“Dear Ms. Stevens, My wife and I are both retired and are living in a small town in Ohio. I am retired from the federal government and the wife from Sears Roebuck. I have a small pension and both of us have Social Security.  I would like to know how I can make my portfolio more effective. We don’t have a great amount of money and our greatest worry is ‘Will we be able to live if we have to go to a nursing home, or assisted living place?’ Her folks are both 93 and we have put them in an assisted living place just recently.”

“Sue, By now you must be up to your eyeballs with portfolios to analyze. Would you consider one more? I’m not sure what I should do to achieve proper maintenance of my portfolio during retirement years. I’m a 64 year old minister. My wife and I own our home with no mortgage. We are in reasonably good health. I am still serving in the ministry and am thinking of quitting next May when I will be 65. Thanks for whatever attention and assistance you can give.”

“Hi Sue, My husband is a retired principal. We have done everything wrong with our rollover that you can imagine. We rolled over approximately $50,000 into an IRA in a government bond fund. We wanted to be safe; however, about 7 months ago, we decided we wanted in on the band wagon. We transferred 2/3 into a high yield bond fund and 1/3 into a stock fund and soon lost about $4,000. We have not been able to recoup any of that money. My husband is now 68; I am 61. Please give me your input because every time I make a move, it’s the wrong one.”

“Dear Sue Stevens, I am single (long ago divorced), age 61 last June and downsized by layoff at about the same time. Have been collecting unemployment checks and dipping into my taxable safety cushion savings as necessary to make the house payment and live. If I stay “retired” and collect Social Security, can I live on $35-40,000 a year and not deplete my funds too rapidly?”

“Sue, Know you’re swamped but if I could pass your screening it would be super to hear from you. I’m a retired male executive in my 60s. Had a nationally known planner, but he’s outta here. Truly bad performance. Jeez…I’m on my own. Am I dreaming to hope for about $40,000 a year?”

“Dear Miss Stevens: I am a single, childless woman, 67 years old. I have been on disability for the last five years and officially retired in 1999. Since my health is poor and my neighborhood is in a state of decline, I will soon have to move. I have been looking at continuing care retirement communities, but find that I am emotionally resisting that idea.  I am attaching a copy of my portfolio and I can just see you in my mind’s eye marking off the pitfalls I have fallen into (and you haven’t even seen the ones I got myself out of). Thank you for any help you can give me in organizing this phase of my life.”

“Dear Ms. Stevens: I am 60 years old and took an early retirement from the government when I was 51 years old. Since I retired, I have been taking care of my 5 grandchildren before and after school. My mother sold her farm and now lives across the cul-de-sac from me. She is 82 and beginning to have short-term memory problems and my sister and I are helping her more in managing her affairs. Two years ago my mother-in-law (age 83) and father-in-law (age 86) moved to the house next door to us. They neither one drive, so I take them to doctors appointments, order their medicine, do their grocery shopping, and pay their bills for them. I keep track of all of our investments in Quicken. We each have revocable trusts and all of the investments in non-retirement accounts are in my trust. I have IRAs at brokerage firms. We also have invested money for the 5 grandchildren in mutual funds for their college educations. We would like help with reallocating our portfolio. How do we treat the trusts? How should the 401k be invested? Should we do something about the brokerage accounts?”

“Hi Sue, sounds like you’ve been there and done that.  Portfolio’s that is.  My name is Jim and I love to play with “ports”.  They are fun (as long as you are making money).  I have made some money, but I could have make big money if I had stood still and left my port alone….I am moving towards income because I just retired and will need all I can get.  My income over the last 10 years never averaged above 30k.  I raised 8 trolls and have 10 grandtrolls.  Put two through college.”

“Just retired, got hit with a heart problem at the same time.  Will be receiving $700,000 from the retirement plan in January. Would like to get a return of $60,000 a year to live on till the dirt hits me in the face.”

“Dear Sue, I am 62 years old and began drawing Social Security in February. My wife is 54 and hopes to leave her university job next year so we can travel a little. Inasmuch as I took my pension in a lump sum when I was “downsized,” my income is derived solely from systematic withdrawals from my IRA and my Social Security. When my wife leaves work next year I will have to increase withdrawals from my funds to replace her income or she will have to opt for systematic withdrawals of ‘substantially equal periodic payments’ for five years. Any ideas on how to structure our withdrawals? Thanks for your contributions of time, energy and expertise to Morningstar, an organization that should be known by every junior and senior high school student (and teacher) in the country.”

“Dear Sue, I am a widow, age 65. I live in the country alone with my dog. I live on a pension, but find myself dipping into my savings regularly. I would very much appreciate your help and opinion in reorganizing my portfolio if necessary.”

“I attended your seminar in Philadelphia on Saturday and thought it was great! I detected a bit of compassion when you spoke of the 68 year old man who was in no position to retire and had to move from Philadelphia. I was not overly impressed by all the titles after your name but was very impressed that you were a professional musician who played the cello. Congratulations on such a rounded background and being such a caring person.”

The 70s

“I am 75. Started in this country 50 years ago with $5. My portfolio now is close to $250,000. With a place in NC and one in FL. No mortgage and no obligation to anybody except my wife. Four children with advanced degrees. All professionals and married. Started investing in mutual funds 20 years ago when I realized I would be very hungry if I had to live on Social Security.”

“Dear Ms. Stevens: I am a geezer of 71 but still earning, and expect to have an income of $250,000, perhaps tapering off to about $110,000 a year for a year or two, and then perhaps dropping down to my retirement income of about $77,000 per year. I have about $950,000 in fairly liquid assets. I would like to earn at least 6% beyond management expenses. I realize now that I should have both paid more attention, and been less conservative—or at least I think I should have.”

“Dear Ms. Stevens: Thank you for your ‘Top Ten Portfolio Pitfalls.’ I have just completed my third reading and must acknowledge that I am guilty on all 10 counts. My age is 73, wife is 70. Thirteen years ago my cardiologist advised my life expectancy was 8-10 years. I should simplify my portfolio for my wife. She has very little interest or understanding of financial investments.”

“Dear Ms. Stevens: I am retired and have taken control of my 401k and accepted a lump sum settlement in lieu of a pension. I have rolled these over into IRA accounts with both Fidelity and Vanguard. I have the Vanguard IRA for minimum cost and the Fidelity account because their equity funds have more $ex appeal. “

“Dear Ms. Stevens, My wife and I are aged 70 and 72 respectively and we are in good health (photo included). We retired in 1987 and live in our own home in a retirement resort community in the Ozark foothills of Arkansas. We suspect our portfolio is ‘out of focus’ and that some of the funds are duplicates of others. Not quite sure how to correct this. We also need help managing the cash flows from the IRAs. Hope you enjoy your work as Morningstar’s new resident financial planner and we wish you success and prosperity.”

The 80s+

“Dear Sue Stevens: Your article on the “Top 10 Portfolio Pitfalls” was great.  You didn’t miss a trick…. For the record I am a retired architect, age 81, single, active, interested in the arts, music, reading, good food and a dry martini!”

“Dear Ms. Stevens, I am 80 years of age. My wife died in March of this year. All of our financial assets were in a family trust. I am currently in the process of having a federal estate tax return prepared. At this point in my life I consider myself to be a moderately conservative investor but still want to maintain a growth factor since, absent a financial disaster, I am investing for my heirs as much as for myself.”

Envisioning Your Best Life

If you want to transform your relationship with money, it starts with intent. You have to envision what you want. Perhaps these stories and goals for different times in life will inspire you to think about what you want.

This is not a “one and done” kind of exercise. You make your best plan knowing what you know today, but we all need to regroup periodically. Your priorities may change. What’s important to you may evolve.

The ultimate work, then, is an engagement with soul, responding to the demands of fate and tending the details of life as it presents itself. We may get to a point where our external labors and the opus of the soul are one and the same, inseparable. Then the satisfactions of our work will be deep and long lasting, undone neither by failures nor by flashes of success.

– Thomas Moore, Care of the Soul

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Disclosures
The information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.