"It's Not Too Late & It's Not Rocket Science"
Personal Financial & Retirement Planning

(The outline for a seminar I presented at the University of South Carolina
School of Music for faculty and staff on 5 September 2014.)

(NOTE: The material for this seminar was derived from my personal experiences, lessons learned, and what I've read. I can't include everything that pertains to this subject, so I have provided references for more detailed information. The seminar parallels and elaborates on my article "What Do You Want to Do and How Are You Going to Do It?" found elsewhere on my retirement page.)

I. What do you want to do with the rest of your life?

  • What/where/with who (until you know, don't retire)
  • You can do this regardless of your age; I started seriously building my retirement plan at age 59!! (But, don't wait1)

II. Income Sources--financing your plan

  • Salary, pension, social security
  • From investments (stocks, bonds, funds, real estate)
  • Part-time work
  • Other: consulting, performing, inheritance, etc.)
  • Sale of home
  • How much will you need?....IT DEPENDS.....how much will you spend?

III. Expense Management

  • Track every dollar (6-12 months to start)
  • Make a budget (& stick to it)
    • a way of making better decisions about your money
    • you can waste 20-30% of your money if you don't know where it goes
    • reduce & reallocate expenses
    • the first step toward getting control of your finances
  • Pay off ALL debt; credit cards first
  • Pay off your mortgage (if you can)
  • Downsizing and/or relocating to reduce expenses
  • In retirement, some expenses go up, some go down or disappear
  • Amount you'll need in retirement is not a function of how much you've earned; it's a function of how much you'll spend
    • 25 x projected annual expenses
    • maximum 4% annual withdrawal rate from assets to make up shortfall
    • you won't outlive your money!!

IV. Investment Strategy

  • Make regular contributions to your investment plan, until you retire
  • Increase contributions to eliminate shortfalls
  • The older you are, the less risk you should tolerate
  • Greater return from equities probably means greater risk
  • A conservative rule of thumb:
    • subtract your age from 100%
    • difference should be % invested in equities
    • the rest in bonds
  • Ignore the hype of " financial pornography" (the media, investment advisors, etc.)
    • NO ONE can predict the future (time the market) over the long term
    • prospectus disclaimer: "past performance is no guarantee of future results" protects the broker/advisor if things go bad
    • Emotions (greed & fear) are the most to blame for bad investment decisions
    • the hype feeds on emotions
    • If you want to grow rich on an average salary, you CAN'T afford to invest in the expensive products sold by most brokers/advisors (salesmen).
    • There is no compelling case for active fund management.
    • Everything you don't give to someone else is yours to invest.
  • What's an index?
    • a "slice' of a market
    • all stocks in the market (index) have specific characteristic(s) in common
    • e.g. Dow Jones Index (30 stocks); S&P 500 (largest 500 stocks); Wilshire 5000 Total Market Index
  • An index fund includes all of the securities in the index
  • A short quiz:
    1. Are you willing to let the market build wealth for you?
    2. Do you accept the fact that active managers are likely to under-perform their benchmarks?
    3. Would you rather keep the money those managers take in fees?
  • I would be doing you a disservice if I didn't tell you that "the best strategy for the individual investor is to build a portfolio of low cost index mutual funds" and why
  • You'll never hear this from anyone in the investment community
  • But, don't take my word for it; listen to the experts:
    • Warren Buffett (author of above quote)
    • Paul Samuelson--Nobel Prize winning economist
    • John Bogle--founder of Vanguard, world's largest mutual fund company
    • Burton Malkiel--professor of economics at Princeton University
  • Advantages of a portfolio of low cost index funds:
    • diversification: own ALL the stocks in a market (index), not just a few asset classes are the key to diversification
    • predictable risk due to diversification and large number of companies in index
    • large choice of index funds
    • low cost of investing (costs and fees reduce your returns)
      • very low expense ratios
      • no commissions (NTF designation)
      • tax-efficient
      • almost no trading costs
      • hidden fees
    • market returns (+ dividends) are a virtual certainty over the long term
    • simple, easy, low stress strategy
  • Create a portfolio of index funds allocated over several asset classes (NOT market sectors)
    • choose a fund family: Vanguard, Fidelity, T. Rowe Price
    • start with 3: domestic stock index, international stock index, domestic bond index
    • fund your portfolio with current assets according to your target allocations
      (I did this only TWO MONTHS before I retired on 3/31/2006, but don't wait!)
    • spend an hour a year (or less) on your investments ("lazy portfolios")
  • If I had started with this strategy when I began saving & investing, we'd be having
    this conversation on one of my yachts!!

V. Health Care and Long Term Care

  • Health care
    • health insurance
    • Medicare
    • negotiate
    • medical travel
  • LTC Insurance (Do you need it?)

VI. Legal Issues

  • Named beneficiaries for retirement accounts
  • "TOD" designation + beneficiary for non-retirement accounts
  • Documents (for state of residence)
    • wills
    • durable power of attorney
    • living will and health care surrogate
    • copies as appropriate; don't put documents in a safe deposit box
  • Estate planning/tax avoidance: get professional help

VII. Retirement--executing the plan!

  • Modify as necessary
  • The fun begins
  • Become the envy of your friends
  • Enjoy life, sleep well, and don't worry!!


  • "The Smartest Money Book You'll Ever Read" by Daniel R. Solin
  • "Millionaire Teacher: Nine Rules of Wealth You Should Have Learned in School" by Andrew Hallam
  • "The Smartest Retirement Book You'll Ever Read" also by Daniel R. Solin
  • "A Random Walk Down Wall Street" by Burton Malkiel