You never know where you'll find some valuable life lessons -- not to mention financial lessons. The other day, in fact, I read a notice that Maria Esther de Capovilla of Ecuador had died. I didn't gnash my teeth and lament much, though, because I reasoned that she'd led a good, long life. She died at age 116, after all!
That called to mind a woman who made Maria Esther look like a spring chicken: Jeanne Calment, of Arles, France. When she died, in 1997, she was 122! If Arles sounds familiar, it may be because Vincent Van Gogh lived and worked there -- and Jeanne Calment actually met him.
After reading a little about her life, I found some lessons that stood out for me.
Prepare to live a long time
The first one is perhaps the most obvious: Prepare for unexpected consequences, such as living well past 100. It will happen to a bunch of us. If you dutifully move all of your investments into low-return bonds at age 80, thinking that your age requires doing that, think again -- you may still have a decade or two of investing left.
Living an extra-long life will offer many upsides, such as getting to meet your great-grandchildren and great-great-grandchildren, and seeing what new technological marvels are introduced in the marketplace. But if you haven't prepared properly for your retirement, your last years may be ugly ones if you run out of money. To prevent that from happening, I encourage you to do some planning. (We can help.)
An extra-long life can also turbocharge your investments. If, at age 50, you socked away $100,000 in investments that end up averaging 10% annual growth, you'd end up with $1.7 million after 30 years, at age 80. If those investments had another 20 years to grow, that $100,000 would become $11.7 million. (Wouldn't your loved ones be delighted with a piece of that inheritance!) If Jeanne Calment had made that investment at age 50, by her death at 122, after 72 years, 100,000 francs would have become 95 million francs.
Remember also that some carefully chosen stocks can return significantly more than 10% over long periods. Check out these average annual returns over the past 20 years:
Johnson & Johnson
Procter & Gamble
Be careful when you sign things
This one is kind of funny -- except to one fellow and those financially tied to him. You see, Jeanne Calment's retirement plan included an unusual but effective element. At age 90, she sold her apartment to a lawyer. That provided her with a monthly income until her death, and she reserved the right to live in the apartment until that time, too. The lawyer probably thought he was getting a good deal and that after a few years of payments, he'd own a nice piece of property. Well, he died before she did, at age 77, and he ended up having paid her a total of around $180,000, which was some three times more than the value of the home.
This kind of arrangement is still around today -- in reverse mortgages, for example. These are not right for everyone, but they do make sense for some.
Jeanne Calment was known for not only her longevity but also for her wit. She took up fencing at age 85 and rode a bike until age 100. She gave up smoking in her teens -- 119, to be exact. She's reported to have once said, "I've never had but one wrinkle, and I'm sitting on it."
Expect the unexpected
You surely know to expect unexpected developments in life. Just be sure to include as a possibility that you'll live well beyond your 80s and even 90s. You may even beat Jeanne's record and die at 123. To make sure your last years -- or decades -- are good ones, get your financial ducks in a row.
To learn more about how to make smart retirement planning decisions, check out our Rule Your Retirement newsletter, which happens to be the retirement guidance source that I refer to most often. It's also one that you can try for free.
Here's a sampling of some very useful articles from past issues:
- In the June 2006 issue, newsletter editor Robert Brokamp addressed international investing and re-recommended an international mutual fund that had advanced some 50% since he first mentioned it back in December of 2004.
- In the January 2006 issue, Robert tackled asset allocation and explained how we can "avoid Uncle Sam's grabby hands." He listed a host of popular investments, such as bonds and dividend-paying stocks, in order of tax efficiency.
- In the May 2005 issue, readers were taught how to withdraw money prudently in retirement, so as to make it last.
- The October 2005 issue delved into dividends and offered some recommended dividend-payers.
These articles may also be of interest:
- Can You Retire in 2016?
- Prepare for a Gruesome Retirement
- $1 Million May Not Be Enough
- 9 Retirement Killers
Here's to a wonderful next 50 years!
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Longtime Fool contributor Selena Maranjian 's favorite discussion boards include Book Club , Eclectic Library , Television Banter , and Card & Board Games . She owns shares of Wal-Mart, an Inside Value recommendation, and Johnson & Johnson, an Income Investor pick.For more about Selena, viewher bio and her profile. You might also be interested in these books she has written or co-written:The Motley Fool Money GuideandThe Motley Fool Investment Guide for Teens. The Motley Fool is Fools writing for Fools.