What to Do to Retire Successfully. Martin B. Goldstein

must always know the extent of your expenditures, yet many people have no idea of what their budgetary limitations are. Only when they max out their credit cards do they appreciate the amount of their debts. Bankruptcy is a credit wrecker and should be avoided at all costs, if retirement is in future plans. Some resilient souls may overcome a bankruptcy with a strategic comeback, but the interim phase is usually painful and best to be avoided. Try the best you can to know where every penny goes, so you can know when you can truly afford whatever luxurious items you may wish to purchase. Always keep your assets and liabilities in balance. Run your household so that all necessities are paid for first before budgeting for other items. Save today so you can spend another day.

      SAVING

      Although the formulas for timely saving and investing for specific situations, time periods and retirement needs will be addressed in great detail in the next part of this book, let’s discuss some basic fundamentals now.

      It is important to indoctrinate each child into the habit of saving. At a young age, perhaps in the first or second grade of elementary school, the parent should physically take the child to the bank and open a savings or money market account in joint ownership, so the child can appreciate having money set aside in his or her own name. Over the years such an account can be added to and earmarked for specific purposes, such as school tuition, birthday parties, weddings or the like. In periods of low interest rates, as soon as feasible, this account can be augmented with higher-interest-bearing investments, always bearing in mind that the non-bank investments do not carry the guarantee of the federal government and therefore are more risky.