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Author: JLC Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75340  
Subject: Re: HELP! NEED ADVICE-LOST ALL MY RETIREMENT $$ Date: 12/25/2001 4:32 PM
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First off, sorry about what happened but it looks like you've taken the high road and have turned this into a positive experience. I give you an A+ for that, too many people whine and waste time.

<<<WHAT ADVICE CAN YOU GIVE ME ABOUT WHERE AND WHAT TO PUT WITH ANY DISCRETIONARY INVESTMENT FUNDS I MAY HAVE.>>>

Pay off all debt first, especially credit cards. Next step should be establishing an emergency fund of cash. Figure out what your bare necessity living expenses are (or monthly income) and stash away 6 months worth. Look for a money market fund to place it in, they usually give a slightly higher interest rate than a savings account, plus you can write checks on them.

After that is done, start a Roth IRA (or Traditional IRA if your income level is too high for a Roth). Fund it to the max, and don't forget, starting in 2002 people of 50 have a "catch up provision" where you can contribute more than the under 50 crowd. The easiest place to put this is in an S&P 500 index fund. They usually have the lowest management fees/cost ratios than any fund around. Plus they give you market returns without any effort other than making out the deposit slip.

If your new job offers a 401k, participate to the max if you can, after funding your IRA. If you are self employed, check into SEP-IRAs. Outside of that, it's basically taxable accounts. Again, I'd place money into an S&P 500 fund.

<<<I AM TERRIFIED OF OUTLIVING MY EARNING CAPACITY. Please help. Your advice is appreciated>>>

Much of this has already been taken care of by living below your means. However, there are a few things to think about. Number one, disability insurance. You're 60, so you still have 5 years until Social Security Disability kicks in, but even when it does, it sucks. Talk to some agents and see what the costs/benefits are. Second, long term health care insurance. Don't know what you're family situation is, but who would take care of you if you became ill? If you have a family, you may still need some skilled nursing care once or twice a day. Again, Social Security would kick in, but only after all or almost all your assets were gone, and options suck. Something to think about.

Now, after those are checked into, you have to see what your monthly/yearly living expenses are. How do you know where to go if you don't know where you've been? If you're going to retire and live completely off your saving, the rule of thumb is you'll need 20 times yearly living expenses. Otherwise, you'll need to work part time to make up the difference. Personally, when people completely retire, that's when they go down hill. Selling real estate is something you could do until you dropped dead. I have a friend that is 70 selling real estate and rides her Harley into work.

<<<Life is sweeter. Having lost almost everything, I deeply enjoy every moment I cook, clean, and maintain the roof over my head. Something I did not do when I took it for granted.>>>

This is the best assest you have. Don't loose it.

JLC
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