Some people get better with age. Take Roger Clemens, for example, who won his record seventh Cy Young award last season. Here's a guy who actually came out of what was supposed to be retirement to once again prove he's one of the best in baseball. OK, it's a game, but that's got to take some serious focus and dedication.
I'm going to come clean, right here, right now. I'm no Roger Clemens; I have always been obsessed with retirement.
Some people talk about living a full and happy life by working on into their 70s or 80s. When I encounter these people, I just want to shake them and scream, "What is wrong with you?!"
If I ever met Oracle's (Nasdaq: ORCL ) Larry Ellison, or had a meeting with Bill Gates at Microsoft's (Nasdaq: MSFT ) offices in Redmond, or even sat down at a Dairy Queen eating Dilly Bars with Berkshire Hathaway (NYSE: BRK.A, BRK.B ) Chairman Warren Buffett, I'd have a few questions: Aren't you done yet? Aren't you done building your empire? Haven't you made enough money? Wouldn't you prefer to read a good book rather than a business report? Wouldn't you rather sit around sipping pina coladas instead of having power lunches with other billionaires?
I understand the need to be active. I'm not saying I want to lie down and die. But I have plenty of stuff I want to do beyond work. I still want to start a rock band. I want to visit every state in the Union. I want to swim in the Aegean. I want to coach third base for a Little League team that has a shot at the championship. I want to publish a short story in The New Yorker just so I can feel uppity and literary for a week. I want to build the biggest sand castle the Outer Banks of North Carolina have ever seen.
Working forever is just not on my agenda.
"That's all well and good, you slacker," you say. "Most of us aren't wired like Buffett. We want to call it quits and coast into our golden years. But how do you get there?"
Well, there's the rub. It's easier said than done. And that's why I hope my bosses don't read this column and find out what I really want to do for a living -- nothing. I'm going to have to work a little longer -- OK, a lot longer. But I do have a seven-step plan. It's a little underhanded, but if you promise not to forward this to anyone named Gardner, I'll fill you in on it.
Don't get ripped off
First off, don't get ripped off. Don't fall for get-rich-quick schemes, whether they be selling real estate with no money down, placing mysterious ads on the Internet that guarantee you thousands in sales, or acting on hot tips from a broker who cold-calls you. There's no better wisdom than this: If it sounds too good to be true, it probably is.
Don't turn down free money
If your employer offers you matching funds in your 401(k) and you don't take advantage of it, you are throwing money away. If you are eligible for an IRA and don't contribute as much as you can every year, you are stealing from your own future and tossing extra money to Uncle Sam by passing up tax breaks.
Don't fear stocks
It's a fact: Inflation will erode your long-term savings if you leave it in low-interest-paying bonds or money market funds. You want to retire before you're 90, don't you? Stocks are still the best-performing investment vehicle for the long haul.
Take advantage of volatility
The best way to take advantage of the volatility of the stock market -- yes, take advantage of it -- is to dollar-cost average into your 401(k), IRA, or other investment accounts every month. That way you'll buy fewer shares of stock when prices are wildly high and more when stocks are at better prices.
Take the easy route to investing success
Nobody says investing in the stock market has to be rocket science. You can beat 75% of the mutual funds out there just by putting your money in a total market index fund. If you want to pick your own stocks, the Fool can help. But if you just want to put it on automatic pilot, you could do far worse than choosing an index fund.
Don't chase hot stocks
We've all been there. We bought Yahoo! (Nasdaq: YHOO ) at $130 a share. Or Cisco (Nasdaq: CSCO ) at $80. Or maybe we're even taking a flyer on Google (Nasdaq: GOOG ) at $150 a share or Taser (Nasdaq: TASR ) at $50. There's nothing wrong with taking some risk -- with money you can afford to lose. Which means you should have a healthy chunk in an index fund, or the kind of stocks you can find in Motley Fool Income Investor or Inside Value before you explore Rule Breaker territory.
Let other people do the hard work
OK, here's where I show my true colors. As I'm sure you've gathered by now, I'm a lazy investor. And while there are definitely some things you can easily do to give yourself the best chance for a great retirement (see steps 1-6), planning for retirement is not easy. It's filled with pitfalls and choices. And I hate pitfalls and choices.
If you're like me, you want to get the best information and advice available to make sure you not only stay on track with your investments but also successfully navigate the intricacies of asset allocation, insurance, long-term care, taxes, and Social Security while ensuring you do the things that are important to you -- such as waterskiing and doting on your grandchildren.
Whether you're 30 years from retirement or living in retirement right now, you need somebody in your corner helping you keep your dreams on track. That may be a good financial planner, if you can find one. Or that may be a Fool like Robert Brokamp, whose newsletter advisory service promises to help you Rule Your Retirement through thick and thin.
We hired Robert six years ago because he brought Street credentials without the Street baggage to our staff (OK, also because he dresses up as a Christmas tree for Halloween, but that's a story for another time). Robert has been a financial planner and an author. He's an expert in the minutiae of saving and growing your money from all angles -- be it from living below your means to tucking your money away for your children's education.
Equally important to me, he's a great communicator. And that's what I need -- somebody who can speak to me in plain English. And someone who's not a know-it-all but has the tenacity to find the answers to the questions I have. Robert has also put together a crack team of experts to work with him in the Rule Your Retirement service, and they're out there in our private discussion boards each and every day.
Plus, I ask you this: Would you rather take advice from a stuffed suit who makes money each time you visit him or from a guy who wears a Christmas tree to work? I think the choice is clear.
I'll get off my soapbox about Robert and his Rule service now. I know that was a long-winded seventh step to a lazy retirement, but I've seen enough people get burned by poor advice and poor planners. I've also seen too many people not do anything to plan for retirement, and that can be just as dismal. Worse yet, I've known folks who had retired, made some mistakes or miscalculations, and have had to unretire. That's a path I plan to avoid at all costs. Don't let it happen to you, either.
If you don't take stock of what you'll need to do to give up your day job -- permanently -- you may never get to Tahiti and stay there. And that'd be crying shame, if that's your destination of choice.
So go ahead and dare to Rule Your Retirement. These seven steps will put you on your way. Oh, and for a limited time, Robert will send you a bonus copy of Tom and David Gardner's book, Money After 40: Building Wealth for a Better Life, just for taking a free trial to the newsletter service. He's just that kind of guy.
This article first appeared November 30, 2004.
Bob Bobala is the former editor-in-chief of The Motley Fool. He doesn't own any of the companies mentioned here. Like most Americans, he will have to work till the day he retires -- except with a new base in San Diego, he's feeling pretty smug about it. The Fool is investors writing for investors.