To all my dear friends at AARP: I'm doing it. I'm retiring. After all these years of reporting and writing about how to prepare for retirement, I'm trying it myself.
This decision wasn't an easy one. I've gone through all the typical questions: Can my husband and I do this without crimping our standard of living? Will I be happy stepping back from work I have found so meaningful? Can I be content when I'm no longer fighting on behalf of consumer rights? I've said yes, then no, then yes to myself dozens of times.
My husband retired last year and, just as I've advised in my columns, we've had many, many conversations about what to do with our time. To start, we're going to follow a dream and live in Rome for a year. Art. Music. Gelato!
After Rome, my calendar is blank. Like every other new retiree, I'll have to invent a life for myself. It's challenging and not a little unnerving. I'll spend more time with family and friends, do more reading and more jigsaw puzzles. Then I'll see what comes my way.
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So much has changed in the world since the day I launched as a baby financial reporter in 1963. When it comes to what to do with our money, we have tons of options that didn't exist back then. So which should we choose?
My advice? Choose almost none of those options. Simplify your financial life. Raise the automatic contributions to your savings plans. Don't have a plan? Automate contributions to an individual retirement account (IRA). Buy low-cost index funds that follow the broad stock and bond markets; they will likely outperform any managed fund you own (and, almost certainly, any bag of individual stocks you might select). Rightsize your life to live within your means. Make a will. Check that the beneficiary forms of your IRAs and 401(k)s list the correct people. Then quit thinking about your money and get on with your life.
But, but, but … it's one thing to nod your head to advice on paper and quite another to set a plan in motion. You might think about making changes but never act, or simply turn your decision-making over to someone else — someone who won't necessarily have your best interests at heart.
So how do you gain the confidence to make financial decisions?
Personally, I learned confidence by following the academic research on what actually works. That's where I got the advice that I offered above. If you ignore all the other stuff — namely, the stuff that doesn't work! — you've narrowed your choices to a small set of decisions, such as which index fund to choose. At that point, you can hardly go wrong.
What throws us off is the vast Wall Street financial machine offering complex investments designed to separate you from your money. If you don't want to manage your money yourself, find someone who charges only fees (no commissions) and works for a firm where no one charges commissions. Keep it simple. Simple is the sophisticated way to save, invest and plan.
I'm going to miss writing to you every month. Your concerns have been ever present in my mind. To those of you who sent me questions, my warmest thanks. I was able to answer only a fraction of them in print, but all of them informed my thinking and often inspired full columns on subjects that I hadn't considered.
But every life eventually takes a turn away from working and toward the ordinary responsibilities of life and good citizenship. This is my time. I am honored to have spent the past 10 years in your company. Goodbye, Godspeed and ciao.
— Arrivederci, Jane
If you would like to send a note to Jane, you can email her at email@example.com.