Investing for Retirement
Retirement investing is more necessary than you think these days. And here's why...
Lots of workers have to battle their way through every day, from the living hell of Monday to the heart-warming bliss of Friday. They see the days coming and they know what to expect. And it’s just about the same for the weeks, with people scanning the horizon for the next holiday or vacation. But the decades do just tend to slip by most of us. You never see them coming and then one day they suddenly walk up behind you and slap you on the back of the head.
You know this is true, whether you’re an antique yourself or simply hang around with old people. One constant conversational theme for people who’ve turned the odometer over a few times is, “Where did the time go?”
My contention is that most of us manage to put off thinking too hard about our financial futures until we hit 55. That’s the year you stop counting up and start counting down.
At that age, you’re at or near the peak of your earning power. You’ve weathered house payments, car payments, your kids’ education and weddings and you’re now an empty nester. And suddenly the big SIX-FIVE, the traditional retirement age, is close enough that you can count the years on your fingers.
For many people, it’s a big wake-up call. And for even more, it’s a sphincter-tightening moment of sheer panic. And that’s because the retirement planning that you’ve been working at haphazardly is suddenly looking totally inadequate.
How inadequate? Well, a survey by the Employee Benefit Research Institute (EBRI) and Greenwald & Associates says that just 14% of all workers have $250,000 or more in their retirement savings. (Fortunately, that percentage rises to 23% for workers over the age of 45, but that’s still pretty discouraging.)
Since I tend to regard my readers as superior in every way, I’m assuming that your retirement preparations are much farther along than the average.
But just in case they’re not, I want to make two points. First, no matter what you’re doing, you need to stop thinking about saving for retirement and start thinking about retirement investing.
Saving for retirement is the tired old idea that you spend your working life filling up a bucket of money and then start ladling it out slowly when you retire.
But any money that you have in an actual savings account is pretty much wasted, since your rate of return on a bank savings account guarantees that your money will be constantly losing purchasing power as inflation eats away at it.
If you want to get ahead in a capitalist society, you need to be making capital investments. If your money isn’t working hard for you, it’s just sitting there losing value. That's why retirement investing is essential.
My second point is that the appropriate person to be in charge of your retirement investing is you. Yes, you can turn the job over to a financial planner, a stock broker, a mutual fund salesman or your brother in law.
But nobody is going to pay closer attention to your investments, or keep your best interests in mind, or charge you lower fees, than you, yourself.
So if you’ve just hit the double nickels (that’s 55 for those of you who don’t remember the citizen’s band radio craze) and you need a trustworthy partner to help you in your retirement planning, consider Cabot. We’ve been at this for over 45 years, and we know what we’re doing. We also know what you should be doing. If you're heading into retirement or already retired, Cabot Dividend Investor and its portfolio full of winning retirement stocks may be just what you need.
Tim’s Comment: I’d never seen this quote before, and must confess I’m alternately horrified and amused at the concept of borrowing brains. Presumably Wilson was referring to the practice of consulting with others, a strategy that frequently—but not universally—yields better results.
Paul’s Comment: Wilson was a smart guy, the only PhD to serve as President, but he knew that two heads were better than one. That principle has a limit, of course, because having too many brains on the job is a recipe for chaos, rather than genius. But getting advice in moderation is usually a good idea.