September 2, 2010
You can read Ready Rules #5, #4, and #3 at these links.
If you retire at age 66 (full retirement from Social Security) you can expect to live to age 84. In an era of low interest rates you will need to squeeze enough income out of your assets while keeping enough capital intact to last a lifetime. This means carefully guarding your investment capital and being realistic about what you can afford. Unless you have considerably more investment capital than you need to generate enough income to live on, don't spend in quantities that will deplete your net worth. That sounds simple - like it doesn't need to be stated - but having seen it happen, I can offer a couple of cautions. The two most common forms of high retirement spending are "dream" items (dream home, dream vacation, dream car/motorcycle/whatever) and financial assistance to family members. I am not in the business of telling people what they should or shouldn't do with their money. Just be sure that when you consider that big ticket item, does it fit with your long-term financial picture?
Next - Ready Rule #1: Spend a Little
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).