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Over 50 and thinking of retirement? Maybe you should reassess that

Retiring after your 50s may be a good idea but only if you avoid mistakes like lacking any investment plans.



Horatio Alger is dead and so is his economic philosophy. The great American dream of building a business, working hard and getting rich is a myth.

Sure, there are a few techno-geeks out there who may do it, but do you have any idea how many aspiring Mark Zuckerbergs are out there who fail? Neither do I, but it’s huge.

So the great American dream has morphed from Horatio Alger to buying Powerball tickets. You can’t get rich quick?Get more basic. About 80 percent of Americans are not confident they have enough money to retire.

Think smaller and avoid mistakes and misconceptions like the following:

Not having an investment plan.

You need to evaluate your goals and objectives, consider what the risks are, develop a strategy, and measure your progress. This is not rocket science—even the math.

Misjudging your time horizon.

If you are 50, make $46,236.00 a year (the average for a household according to 2015 US Census data), have $2,000.00 in savings and $6,000.00 in an IRA, no company pension AND you want to retire at 62 and travel the country, forget it! There is no way with those demographics you can make that goal.

This is not a Pane Webber commercial (besides, they’re gone). You’ll have to work until you croak, and as for travel, you’ll be lucky if they bury you in KayCee.

Overlooking the impact of inflation.

Inflation—the silent killer. If you have all you got in cash paying 1 percent, you’re losing an average of 2 percent a year to the concept of just trying to keep up with the rising cost of everything else.

Cash is a short-term stopgap, not a long-term investment allocation.

Putting all your eggs in one basket and then eating the chicken.

Sure, diversification is over-rated and only works until you actually need it, but still, buying only one stock is like buying only one cow and hoping it to grows to 62,500 pounds.

Keep emotions out of your investing strategy. You don’t put your whole IRA in Disney stock because you love Space Mountain.

Of course, if you want to go to Disney World and ride Space Mountain, you’ll have to skip this year’s IRA deposit. Emotion is the enemy of success.

Over-reacting to short-term volatility.

All markets go up and down, except maybe the farmer’s market. You have to keep your gut in check and not bail out when security prices are going down. That’s the time to buy, not sell.

You buy stocks when the stock market is going down. When it goes up (hopefully higher than when you bought it), then sell. Will Rogers said, “If you want to invest, buy some stock and when it goes up, sell it. Of course, if it doesn’t go up, don’t buy it.”

Misinterpreting past performance.

Don’t let the past price history influence your future investment decisions. The only prices you need to know are the current price and the future selling price (let me know if you find a way to know that for certainty in advance).

Past performance is an unreliable predictor of future performance. Consistency, process, and discipline are more important than recent performance. Specifically: don’t buy last week’s winners, don’t buy last month’s winners, don’t buy last year’s winners.

In fact, buying past winners because they were past winners is like betting on Savvy Shields to win the Miss America contest in 2018. My motivational speaker buddy, Nick Murray, said it best: “She don’t win twice.”

Retirement plan

Failure to make an investment plan can complicate your plans for retirement. (Source)


All is not lost, however, if you’re 50 and think your retirement is underfunded, there are some things you can do:

1. Contribute more to tax-advantaged retirement plans

The IRS rules for annual “catch-up” contributions allow you to contribute an extra $1,000 to IRAs, for a total of $6,500 in 2017, and an extra $6,000 to 401(k)s, for a total of $24,000 in 2017. 

Of course, you have to have it to contribute it. There’s the catch.

FINRA has a great tool: FINRA’s “401(k) Save the Max” calculator. Check to see if you’re on track to save as much as you’re allowed. 

2. Cut spending 

Taking a hard look at your current budget. If you don’t have one, make one now.

It’s not easy: belt-tightening, downsizing. Some expense reduction will by its nature come with retirement: commuting costs, lunches out, bungee jumping.

3. Work longer

The longer you put off receiving social security benefits after your full retirement age, the bigger payment you’ll receive once you do retire. That increase is two-thirds of one percent for each month that you delay receiving the benefits, or 8 percent annually until you reach age 70. Of course, there’s a downside. If you’re like my parents and many others, you don’t live long enough to collect.

4. Brings me to my solution: Die early

Not a serious solution, but it is the title of my upcoming book.

5. Sock away that unexpected money

A raise, inheritance, bonus or tax refund, toss it to your retirement, preferably into an account with tax advantages. Almost as good as free money.

6. Fees

FINRA has a fund analyzer that can help you get a handle on fees comparing over 18,000 mutual funds and exchange-traded products. For instance, if you could save 50 percent on fund/ETF fees in the next 15 years and averaged a 7 percent return, you’d have an extra $62.000 for retirement.

To learn more about saving and investing, and keeping your finances in order, visit the Investors section of

7. Lobby for a financial wellness program

It is estimated that there is a great need for financial wellness programs, as 53 percent of employees feel financially stressed, and this costs employers with 10,000 workers $3.3 million a year in lost productivity.

(Featured image by American Advisors Group via Flickr. CC BY-SA 2.0)

DISCLAIMER: This article expresses my own ideas and opinions. Any information I have shared are from sources that I believe to be reliable and accurate. I did not receive any financial compensation in writing this post, nor do I own any shares in any company I’ve mentioned. I encourage any reader to do their own diligent research first before making any investment decisions.

John is widely regarded as a top legal expert on fiduciary responsibility relating to the investment management profession. A former Banker, teacher and adjunct professor at colleges, including at Wharton, John started his securities representation in 1983, before joining EF Hutton in 1987 where he served as the director of Portfolio Management Programs and General Counsel of the Consulting Group. Later, he started his own law firm, specializing in employee benefit, securities law. In 1995, he co-founded The Lockwood Group of companies, where he served as Chief General Counsel and Corporate Secretary, as well as President of Lockwood Financial Services, Inc. Upon retiring from Lockwood in 2002, John devoted his efforts to Howling Wolf Enterprises, a training company and a publisher of books and articles on Investment and Financial issues as well as fiction. In 2011 with partners known in the Investment management business, he founded The Learning Network, whose mission is to improve Financial Literacy globally for financial professionals and investors. He has authored 14 books on investment management. His current mission is The Ethical Treatment of Somebody Else’s Money, found at In 2010 the Money Management Institute designated him an "architect of the managed solutions industry" awarding him their Pioneer award for Lifetime Achievement in Wealth Management.