Truth #1 Preserving money is as important as chasing returns When the markets were shooting sky-ward, it’s likely you were happy to take risks. You may even have be-lieved you had a good tolerance for losing money. I did that myself, and I’ve spent many nights staring at the ceiling as a result. So? I’ve shifted more money into bonds. (I now have around 45 percent in stocks.) I’ll make up the difference in potential growth by saving extra money each month. To figure out an appropriate asset allo-cation, start by taking 100, subtract your age, and put that percent into stocks. If it helps you sleep better, sub-tract yet another five from the num-ber or—if you’re conservative like me—10.
Truth #2 Retirement isn’t as much fun as it seems Don’t let the statistics get you down. A lot of people work into their sev-enties because they love what they do and can’t imagine stopping—and others wish they hadn’t quit. “Too many people retire when what they really need is a break,” Losey notes. He surveyed hundreds of baby boomers for his book Retire in a Weekend! and found that all too often, a few months or a couple of years after re-tiring, people are bored and rest-less. A better strategy: “Talk with your employer about a more flexible work schedule or working from home before you stop entirely,” he says. It may be tougher to negotiate right now than in flusher times, but giving a little can get you a little. And it’s worth noting: A delayed retirement can be far more affordable and secure because you don’t need your money to last as long.
Truth #3 Money is like sports: there’s no defense like a good offense In good times and in bad.
Jean Chatzky is More’s finance columnist and the author of several books. Read more of her advice here.