Retirement no joke for divorcee

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DEAR BRUCE: I am about to be divorced after 10 years of marriage. I am 48 years old. My soon-to-be ex has a very good retirement pension, which he is now receiving. I used to joke that “my husband is my retirement plan,” only to realize he really was my retirement plan! I have no retirement plan of my own, and I am a self-employed real-estate appraiser with a roller-coaster income. I have no way to budget my living expenses, much less save for retirement. I am looking to find a job with more dependable, stable income and set up some sort of retirement strategy. I am debt-free, I have about $10,000 and I’ll receive $250 per month for a few years through the divorce settlement. Can you tell me what would be the best investment of that $10,000 for my future? – L.R., Louisville, Ky.

DEAR L.R.: Retirement is no joke, and people, particularly when they’re younger, often have a difficult time grasping that the day will come when they must retire. I take serious exception to your belief that you have no way to budget living expenses. In my judgment, you should pick an average number of your income and “pay” yourself each month that amount, even if it means subsidizing initially. Every payday, regardless of earnings, you will draw the same amount. The months where the earnings are slim, you will subsidize; the months where your income exceeds, you will be padding and building up your account.

As soon as you say “best” investment, I’m somewhat at a loss. You must first establish your tolerance for risk, and I would hope that, at 48, you would have a decent tolerance. If you’re going to want totally safe income, you’re condemned to interest only. You should get yourself a modest education through the newspapers, magazines and, yes, investment columns like this one. In today’s world, combined medium-risk market opportunities, growth and dividends, etc., certainly should yield at least a 10-percent return. Also, take advantage of a Roth IRA, which is tax-free money that will be working for you from this point forward.

Send questions to: Bruce Williams, c/o The Cincinnati Post, 125 E. Court St., Cincinnati, Ohio 45202, or e-mail [email protected]. Personal replies cannot be provided.


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