Your Best Piece of Retirement Advice

It's no surprise that many users chimed in with similar points of view. ChiefK shared one of my favourite pieces of guidance for investors of all ages: "Time in the market is more important than timing the market." He went on to impart this common-sense advice. "The sooner you start saving money: The sooner you can start investing. The sooner you start investing: The more time you'll be invested in the market."

Readers agreed on the value of saving, though their advice varied about how much is enough to set aside. 62 Dawg's message was that it's okay to start small. "One only need save a dime," he wrote. "Save 10% of every dollar you get from an early age."

Upstater wrote, "Go for a savings rate of at least 10% of income; 15% or more is much better." Poster Skyedam, meanwhile, argued for a 20% savings rate.

Several posters also were in favour of maxing out tax-sheltered vehicles while in the accumulation phase. Tidefan wrote, "Max out tax-deferred investment vehicles if at all possible. At the very minimum, always invest enough in your employer-sponsored retirement plan to get the full amount of any employer-matching contributions. Failing to do so is literally declining free money."

The Frugal Set
Not surprisingly, making savings a priority and living within one's means were recurrent themes among the "save early and often" contingent.

Giants523127 advised, "Pay yourself first! A dear friend gave me this advice nearly 20 years ago. Put aside some money to invest every week/month and make do with what's left." Hoodee echoed that advice: "If you have a steady income now, dollar-cost averaging is the best thing to do, automatically investing right out of the paycheque or bank account so you don't miss the cash."

Surfmuse wrote, "The more you can save, the less you will have to make, which translates to the earlier you can retire with less worry. When I am lusting for a bigger/different house or new car I think 'Do I need this more than I want to not be working?'"

Haymaker echoed that sentiment. "My father had two rules he passed on to me (and I to my sons): One, no matter how much you make or how little you make, you never spend all you make. Two, just because you can afford to do something does not mean that is a reason to do it."

Many users argued that having a budget and keeping track of expenses were central to crafting a savings plan.

ThePrune argued that sticking to a budget doesn't necessarily mean denying yourself of what really matters. "Living on a budget forces you to say 'no' to some spending, but it paradoxically then allows you to say 'yes' to your true spending priorities. You can peacefully say 'yes' to vacations, new furniture, new electronics, and so on without any worries if the spending were placed into the budget and all the spending added up."

He went on to note that keeping an eye on costs doesn't just matter for the accumulation phase; it's also worthwhile during one's retirement years. "Many retirees' greatest fear is running out of money. Living on a budget in retirement is a proven and effective tool to help control that fear because you can clearly see how to manage your anticipated cash-flow needs."

Having an emergency fund to cope with unanticipated expenses was also high on many posters' lists of must-dos. Holding cash is also valuable during retirement, as poster DaveD82 opined, "[Cash will] help you feel more comfortable knowing that you have enough to cover a year's (or more if necessary) worth of expenses, which will prevent you from acting irrationally during turbulent market behaviour. Additionally, it'll allow you to act opportunistically, should a sharp downfall in the markets occur, without having to sell something else. In an environment where cash/cash-equivalents aren't earning a lot of interest, one should realise that this wasn't the point to begin with and must not overlook its importance."

Debt-Free and Loving It
Not surprisingly, given all the focus on saving enough, avoiding debt was another recurrent theme.

For the accumulators, ATLBob shared these three rules. "Understand the difference between need and want, and learn to live on what you take home each pay period without depending upon credit cards. When you do use credit cards, pay them off in full each month. Your home is a place to live: not an ATM."

Many posters also vouched for the strategy of coming into retirement debt-free.

ColonelBob wrote, "For those who are approaching retirement, the best advice I would give anyone would be to retire with zero debt. I can't begin to tell you how extremely valuable reaching that goal was for me! The day I retired, I owed no man, woman or child a dime."

BobinTexas1, too, finds paying off debt to be one of the most empowering things pre-retirees can do. "Eliminating a home mortgage insures you will never be without housing and, in case of direst emergencies, have something that can be used as collateral."

Poster duanelyon agrees that paying off a mortgage before retiring buys extra flexibility. "Paying off your mortgage before retiring saves a world of interest costs and frees up a chunk of money in your budget for other discretionary expenses like annual long-term-care insurance premiums or a trip to New Zealand or other choices."

Investment Choices Matter
This is Morningstar, after all, so many posters shared guidance on how to build a portfolio for both accumulation and decumulation phases.

Several users after my own heart vouched for the virtues of keeping it simple. For accumulators, upstater advised, "Start saving early and substantially using a basic stock/bond mix; a good balanced fund is fine."

For those in retirement, several users opined about the value of taking risk off the table. Bondable said, "Don't be greedy in your investment decisions. Don't bet the whole farm on high-risk funds, especially in retirement." DeSouza chimed in, "Always remember that zero gain is better than a big loss."

Sailboat wrote, "My best advice is to be mindful that preservation of capital is paramount in retirement. That's why I prefer to invest in strategic funds. Sticking with a fund that has no latitude when the sky is falling does not allow me to sleep at night."

TaylorZR noted the importance of transitioning gradually to decumulation mode: "Convert your 'accumulation portfolio' to a long-term income growth-oriented 'decumulation portfolio' five to 10 years before first income need in retirement."

Investment cost control also appeared in several posts, such as this one by bilperk, who wrote, "Investment costs matter a lot. A 1% AUM [assets under management] fee coupled with a 1% weighted ER [expense ratio] will cause a 4% withdrawal to be a 6% withdrawal. That is 50% of your withdrawal amount in fees."

Don't Neglect Estate Planning
User Taylor Larimore, the co-author of The Bogleheads Guide to Retirement Planning and a true retirement expert, shared this valuable estate-planning to-do list for retirees and pre-retirees:

"Every retiree must plan for the time when they cannot manage their investments because of disability or death. These are a few suggestions:

1. Simplify your portfolio.
2. Have at least a personal will, living will, and durable power of attorney, and make sure they are up to date.
3. Have the names and telephone numbers of persons to contact: solicitor, accountant, financial adviser, insurance consultant, and so on.
4. Prepare a document titled: 'Instructions for Survivors.' This should include: The location of important documents; a list and location of assets; names of creditors to be notified, National Insurance numbers; marriage licence; birth certificate; insurance policies; financial statements; company benefits; military discharge papers; funeral preferences; and a reminder to change title on jointly held assets and to appraise decedents property at time of death."

Get Help (or Don't?)
Although users' views were fairly uniform on the topics of saving, staying out of debt, and investing, they differed on the topic of whether to rely on a financial adviser for guidance.

Pspjpm_NC wrote: "Meet with an independent financial adviser. Have a financial checkup done on your readiness to retire."

But PatHToLogic advised the opposite tack, "Be involved in all your financial decisions directly and do not be afraid to be cautiously aggressive. When in doubt, do it yourself!" Trav1nj's mantra could be summed up as "Trust but verify." He wrote, "Take the time to personally look at and evaluate your holdings, even if your favourite uncle is your financial planner."

Other users simply vouched for the importance of getting educated. Jacks11 advised, "Just keep reading and researching. There is always more to learn about what is new and what is changing."

Racsofp, meanwhile, recommended a classic: "Read The Intelligent Investor by Benjamin Graham. Regardless of the specific investment approach you choose, the book helps equip you to deal with the various market conditions you'll invariably encounter during your trip from initial investment to the day you retire."

Don't Neglect What Really Matters
In addition to many practical posts about managing finances during retirement, other users were more philosophical.

A handful of users argued against retiring at all. Tomk1420 wrote, "If you can continue working, do so. Don't stay in a job you don't like, but if work gives you some satisfaction, keep working. It'll make a big difference in how connected you feel to the world, it'll reduce your dependency on your retirement portfolio, and you'll be able to do things you wouldn't otherwise be able to afford. Remember, 75 is the new 65!"

RRunner seconded that sentiment, "Some define retirement as the stage in life when you do work because you want to, not because you have to." Globalsparrow wrote, "Consider the words of Sigmund Freud: 'The cornerstones of our humanness are love and work.'"

Povdds, in a particularly thoughtful post that I urge you to read, vouched for the many benefits of giving at least something to others. "Be generous. Give enough of it to others. Period. We have made considerably more charitable gifts as we get ready for the big day in the next two years. This programmed giving has several huge, irreplaceable advantages. It connects us with people and to the world we live in (and research indicates this connection is perhaps at least as important as things like lower cholesterol, healthy diet, and so on in predicting longevity and happiness). Knowing you've made someone else productively happy is useful for you, too."

Learning and having fun topped many of your to-do lists. Ramble165 wrote, "Climb mountains, play the violin, fly fish, open a business--whatever will give you a lift in life." Poster raghubilhana, meanwhile, shared many pieces of investing guidance, some practical, some philosophical, including this one, "If you have been wanting to do something for a long time, go do it."

And finally, TOOOINTENSE shared advice that makes sense at every life stage, "Be flexible and open minded. Love much. Enjoy where you are with what you have. Teach youth not to make the same mistakes you made. Never waste a single moment. Thank God every morning you are vertical and breathing. Laugh every chance you get."