Navigating our money lives can be messy.
The myriad decisions we make every day about good money habits, where to invest, and how to balance saving and paying down debt are no easy lift.
I regularly hear from readers asking for advice about their own situations and challenges.
The following is an edited sample of readers’ questions and my answers.
I am 79 years old. How should I invest?
Retirees should typically hold at least five, if not 10, years’ worth of living expenses in a combination of cash and high-quality bonds. That will provide protection against needing to dip into your stock investments if things head south. The yields on bonds and cash may not be party-worthy right now, but they’re still respectable. In fact, many certificates of deposit and high-yield savings accounts are paying around 4.75%.
In general, you should aim for a more conservative mix of investments as you get older so you don’t have to get queasy when the stock market slips and slides. To roughly determine what percentage of your portfolio should be in stocks, subtract your age from 110. So, as a 79-year-old, you should have just under a third of your investments in stocks and the rest in bonds and cash.
I have two children (twins) who are 29 years old and neither is very savvy when it comes to managing money. My daughter is a good saver but my son, who is a doctor, cannot save a dime. They both acknowledge their lack of financial understanding. I was wondering if there are courses or books you would recommend.
You hit a pain point felt by many Americans, not just your children. American adults are woefully behind when it comes to financial literacy.
Most of us never were exposed to financial education growing up.
Although it’s too late for your adult children to have had that grounding, this oversight is morphing in a positive direction for today’s students — 35 states now require high school students to take a course in personal finance to graduate, up from 23 in 2022, according to the Council for Economic Education.
