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Category: Financial / Topics: Choices and Decision Making Investment

Risk-Free Retirement

by Dan Seagren

Posted: July 5, 2009

Don't believe everything you read…

Don't believe everything you read. I have seen similar statements about Risk-Free Retirement although this is an actual title of an article in a reputable magazine. How I wish it were true. Frankly, I do not think there is such a thing. There is always a risk: physically, mentally, geographically (e.g. living on an earthquake fault or on a disappearing shoreline), socially (some retirees become social hermits) and yep, financially (which is what the above article is all about)

There are safe funds, speculative funds, sure funds (you know), stocks, bonds, ETFs, Hedge Funds and other ways to "safely" invest your money. Or, you can put it under your mattress, into gold or other commodities or entrust it to a famous investing corporation or to your brother-in-law. In short, a risk-free investment is about as safe as a risk-free retirement.

I went to a well-known corporation known for its low fees and conservative investing. Most mutual funds had negative growth for the last three years. I had a few bucks so I put them into their highly touted Money Market which should have earned a little more than it did. To my surprise, I looked at the earnings (safe, conservative, low fees) over the last few months. Here
is how it declined monthly (from seven months ago to the present) based on the same original amount except for the $100.00 per month I had invested: $45, 46, 43, 34, 21, 15, 10

Ouch. No one told me their rate was going downhill like that. And I didn't think of checking. So, my Risk-Free Retirement Money Market Fund was not treating me well. Now I have to go elsewhere. I happen to have a 403b and an IRA, all "professionally" managed. They all went South. But my Social Security headed North a little but let's not talk about any more about those
fictional, optimistic or elusive Risk-Free endeavors

My economic Senior Moment was further discomfited when I heard about how the very rich, who do pay considerable in taxes, but because their income is so variable, the actual tax rate averages less than many of us hopefully "Risk-Free" tax payers pay.

Pessimist that I sometimes am, we also need patience, to enhance our frugality, start saving more, whack some credit cards and yes, enjoy the virtue of generosity.

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Dan Seagren is an active retiree whose writings reflect his life as a Pastor, author of several books, and service as a Chaplain in a Covenant Retirement Community.

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Posted: July 5, 2009

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