Aug 7, 2003

What if You Have No Time Left to Invest?
by Marcel Chartier

Ok, you are 59 years old and haven't done a darn thing. No savings plan, no pension, just a job and the promise of social security. What do you do?

Save. Reduce debt.

That's it, forget "investing". especially in equities. You need to SAVE, with a big huge “S” because you need to ensure every dime is kept, and you want to minimize your non-government retirement income in order to qualify for every government benefit you can once you are retired. Since most government programs are based on income, the less you have in income, the more you may generally qualify for. If you feel comfortable you may want to invest small amounts into very conservative funds for a little bit better returns, but be careful about taking on too much risk. In theory, you should be investing something in equities for some longer term growth as you may live for another 20-30 years or more! But, you also want to ensure that you can do alright in the first years of retirement too.

Usually, universal benefit progams are not based on asset levels, and many supplemental programs are just based on monthly income. So, if you are without time to invest, then you should save - you really don't have much other choice. You need to reduce your potential future income, such as interest and dividend income, in order to maximize benefit qualification.

The other key component required is to reduce debt, pay off anything that will drain your monthly income. Set yourself up to have the lowest monthly expenses that you can, because your monthly income will no longer grow after you retire. If anything, government sponsored programs will reduce over time in real dollar terms, and if you have savings, that can help you with any shortfall. This is also the reason why if you are young enough to invest you should, as without investing you will face diminishing income in your future.