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Solid retirement advice is often passed down from father to son, boss to employee or mentor to mentee. A recent USA Today article ("What's the best retirement advice you ever got?" March 2015) features successful people from various industries and backgrounds sharing the retirement advice that made a difference in their lives.

 

  • TIAA-CREF CEO and former vice chair of the Federal Reserve, Roger Ferguson, said his father's wise words, as well as his general attitude toward money, made a big impact on his life. Specifically, his father taught him by discussing money, saving and financial planning on a regular basis. His father showed him that being financially secure is about how you manage what you have—not necessarily how much you have.
  • Hill Harper, actor (CSI: New York) and best-selling author, also received helpful advice from his father, who taught him about the time value of money and the importance of compound interest—key elements of a successful retirement investment strategy. Mr. Harper's father advised him to open a low-cost mutual fund account and set it up to automatically invest money from his bank account and reinvest the dividend.
  • George Fraser, author and motivational speaker, was given a different kind of retirement advice: His uncle warned him not to retire unless he had another, more fulfilling activity planned. He said retirement must be about more than just not wanting to go to work every day—you must have some kind of work that you actually want to do.

 

At the recent Forum on Contemporary Issues in Society symposium at Wayne State University, Roger Ferguson spoke about how to navigate retirement planning in our increasingly challenging retirement reality. Ferguson believes that our current retirement system places too much responsibility on employees, while most workers do not receive enough financial education to make the sometimes-complex decisions that are required.

 

He also provided his own tips for a successful retirement, no matter one's circumstances. Starting with a core principle of saving as much as possible no matter how early or how late you start, Mr. Ferguson recommended these steps:

 

  • Diversify your investments.
  • Educate yourself about finance and get professional advice.
  • Save for long-term healthcare expenses.
  • Consider putting some of your savings into a financial product that will yield a guaranteed lifetime income stream.
  • Don't let market volatility bother you. Have a long-term retirement investment strategy with a diversified portfolio and you can weather any fluctuations.

 

Please note guaranteed lifetime income is provided by insurance companies and subject to their claims paying ability.

Diversification is a technique to help reduce risk. There is no guarantee that diversification will protect against a loss of income.

 

What's the best retirement advice you ever got? Who shared it?

 

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