Interview Pg 3
Carla Fried - Retirement Beat
The "Retirement Beat" and Financial Planning for Retirement
Our last page with Carla Fried of CBS Moneywatch.com covers her blog and financial planning for retirement.9. Do you feel that people have changed their approach to retirement planning as a result of the recession? If so, in what ways have they changed?
It’s not just the recession. I think the big lesson for Baby Boomers especially, is that planning is a lot harder than it seemed. In the 1990s the stock market had an average annualized gain of 18%.
That made us all look like Warren Buffett. Ever since we have learned that we weren’t brilliant, we were just in the middle of a bubble. Same with housing. All of a sudden many people thought they didn’t need to save (or save much) because they would have a huge chunk of home equity to use as a retirement ATM.
And all that fed the credit/spending bubble. When you see the value of your 401(k) doubling in a few years, and your home’s value skyrocketing, why not spend? That era is over too.
It’s clear we’re all back to basics: Save for the future and live within your means. It’s not flashy, but it’s what works. The recession was just the final jolt.
10. What are three things that you would you like to tell our readers?
- The average life expectancy for a 65-year-old male today is 17 years. For women it’s about 19 years. So plan on living a long time—and plan accordingly.
- Respect inflation. Over a 20 year period, a 4% annualized inflation rate will erode the purchasing power of a dollar by nearly half. If you are playing it “safe” by having all your retirement assets in CDs and money markets, will you be okay if your money doesn’t keep up with inflation?
- Come on over to my Retirement Beat blog and send me an email with your questions, or topics you think I should cover. I’d love the feedback!
And Don, thanks for your interest. It’s been fun.--Carla
Carla, I want to thank you for your time and perceptive comments on a subject that is important to everyone. We can all use retirement help in investing and preparing for that day we retire and for the days that follow.I encourage all of my visitors to visit Carla’s blog on “The Retirement Beat” at http://moneywatch.bnet.com/retirement-planning/blog/retirement-beat/ - for interesting and important articles on retirement.
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