Introduction
Life is busy. Sometimes, we get too caught up in the hustle and bustle of every day to take time to look at the big pictures of our lives.
What do you want to be doing in 10, 15, or 20 years? Do you see yourself still working when you’re 60, 65, or even 70? Or perhaps you’ll be partially retired. Maybe you envision yourself finally moving into that house in the country you’ve always wanted, spending your days gardening and reading novels on the front porch.
Whatever your vision is for the rest of your life, now is the time to assure that you can make it happen. Now is the time, if you haven’t done so already, to get your finances in good shape. This book will help you do just that. It offers the education and advice you need to successfully navigate the financial arena of middle age.
How This Book Is Organized
The Complete Idiot’s Guide to Personal Finance in Your 40s and 50s is written in six parts. Each one addresses a different aspect of finances in middle age.
Part 1, “Taking a Look at the Big Picture,” encourages you to step back and have a look at your life—both financial and otherwise. What do you have? What do you need and want? How can you improve your financial situation?
This part of the book also deals with taking care of yourself in ways not directly related to your finances. Middle age can be a stressful time, laden with responsibilities and worries. Taking care of yourself now is really important to assure that you’ll be around to enjoy the rewards of good financial planning for a long time.
In Part 2, “Your Kids and Your Money,” we look at all the ways your kids consume your money, and why launching them into adulthood costs so darned much. Kids have big wants and needs these days, and, if you’re financing them, you’ve got to be prepared.
If you’re currently dealing with the high cost of video games, portable CD players, and mountain bikes, fasten your seat belts. It only gets worse as your little darlings start trading in their bikes for cars and choosing colleges. If you survive the shock of college tuition, give yourself a big pat on the back, but don’t relax too much, there may soon be wedding bells ringing.
Kids are expensive; there’s no two ways about it. Some methods of supporting kids, however, work better than others, and we’ll examine some plans and strategies for getting the most out of your money.
In Part 3, “Hearth and Home,” we look at issues relating to where you live, and how you can avoid hitting financial snags as you deal with those issues.
As you get older, your housing needs or wants might change. You might find that your house is way too big, or there’s too much lawn to keep up, or not enough kitchen now that the kids have moved out and you’re doing more entertaining.
Maybe you’re thinking of buying another home, or renovating the one that you have. Perhaps you’ve even decided to build a brand-new place. Any of these housing options can have a huge impact on your finances.
Part 4, “Life Changes,” deals with major transformations that may occur as we get older. When you think about it, just about all changes affect your finances. You lose a job, get divorced, get remarried, start your own business, or experience the loss of a parent. Every one of those situations can directly impact your pocketbook. Knowing how to cope with life’s surprises and changes can assure that your financial future remains intact.
Good investments, of course, are very important in financial planning. In Part 5, “Smart Investing in This Stage of Life,” you’ll review some options for investing at work, and outside of work. We’ll have a look at the stock and bond markets, and give you some ideas for investing lump sums, such as an inheritance or bonus. This section also gives advice on finding a good financial advisor. After all, you can’t do everything by yourself.
Part 6, “Preparing for the Future,” looks down the road a bit, and gives you sound advice about how to arrive there in good financial shape.
Nobody likes to think about preparing a will, but if you haven’t already done so, you need to put that task at the top of your to-do list. Estate planning isn’t just for old folks, and a will really is the first, and a very important, step in that planning.
This part also offers advice for helping aging parents make decisions concerning their finances, living arrangements, and so forth.
When you’ve finished the book, we hope that you’ll have a clearer picture of your financial achievements so far, and what you need to do now to make sure you’re set for a comfortable retirement.
Some Things to Help Out Along the Way
You’ll find four types of sidebars in this book. They’re meant to steer you away from trouble, amuse you with odd bits of information, clarify terms, or provide tips and advice.
Adding It Up
These are definitions that are meant to help you get a clearer picture of what you’re reading in the text.
Don’t Go There
These are warnings that are intended to make you stop and think before plunging into dangerous waters.
Money Morsel
These are financial tips and advice, intended to help you improve your current situation and prepare for the future.
Go Figure
These are bits and pieces of information that you can share with friends and family. They contain a lot of information, some practical, and some just for fun.
Acknowledgments
The authors would like to thank the many people who provided time, information, and resources for this book. Especially, we thank our editors—Renee Wilmeth, Nancy Warner, and Christy Wagner—for their advice, guidance, and patience.
A very special thank you goes to Gene Brissie of James Peter Associates, and to Bert Holtje, who we hope is finding time to relax a bit and generally enjoying life.
Trademarks
All terms mentioned in this book that are known to be or are suspected of being trademarks or service marks have been appropriately capitalized. Alpha Books and Pearson Education, Inc., cannot attest to the accuracy of this information. Use of a term in this book should not be regarded as affecting the validity of any trademark or service mark.