The Long Term Investor Investing in Your 50s (EP.59)
Aug 3, 2022
Practical ways to use peak-earning years to boost retirement savings. Tips for removing unnecessary investment risk and handling concentrated stock positions. Approaches for tax-efficient diversification and managing speculative small-stock bets. How to revisit retirement timing, goals, and asset allocation in your 50s.
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Max Out Catch Up Contributions
- Do maximize catch-up retirement contributions while in your 50s to increase savings during peak earning years.
- Peter Lazaroff lists IRA and employer-plan catch-up limits and urges adding bonuses and refunds to retirement accounts for extra savings.
Cap And Diversify Individual Stock Bets
- Avoid unnecessary individual-stock risk and begin diversifying those positions into broader funds in a tax-neutral way.
- Peter Lazaroff recommends capping speculative stock bets at about 5% and not topping them up after losses as retirement nears.
Individual Stocks Trail Index Most Of The Time
- Individual stocks often underperform broad indexes; probabilities work against picking winners consistently.
- Lazaroff cites historical rolling returns and a J.P. Morgan study showing many companies suffer large permanent declines.