This article first appeared on Forbes.com on February 19, 2014.
If a person’s lifetime was equated to the four seasons of a year, the time following retirement would be the equivalent of autumn. It’s when nature slows down, takes a breath, and appreciates the accomplishments of spring and summer. People generally reach this season in their 60s and 70s, some with trepidation preparing for their remaining years. Many mourn the passage of youth and resent the next generation taking their place in the sun while others, like the poet W.B. Yeats did, choose to “take up life in both hands and care more for the fruit than the flower” in the years following retirement.
Retirement means, for the first time in decades, you have the luxury of worrying only about yourself and possibly your spouse. A new life beckons, pregnant with opportunities and challenges. Unlike your youth, you’ve gained experience and wisdom as well as the confidence that comes from having survived the obstacles and setbacks of starting a family, raising children, and building and maintaining a career. You are free and now face a whole new life full of adventures just waiting to happen.
The End of Accumulation
Youth and middle age are spent chasing dreams, accepting responsibilities, and amassing assets – psychological and physical. If you’ve been diligent and lucky, you’ve accumulated financial wealth in the form of an IRA, 401k, stocks, bonds, and savings. Your employer might have provided additional assets in the form of company stock, a pension, or a profit-sharing account. You may own tangible assets like real estate, art, and collectibles and you’ve also acquired automobiles, furniture, tools, gadgets, heirlooms, and knick-knacks over your lifetime – most of which are rarely used or even remembered.
In the days before personal computers, instantaneous communications, and sophisticated software, many Wall Street brokerage firms employed veteran traders to sit and interpret the paper tapes of stock transactions that spewed from mechanical tickers across the city. These traders, known as tape readers, would note the price and volume pattern of individual trades in the hopes that they could identify opportunities for quick profits. For example, if the latest trade of a stock differed significantly from previous trades in either price or volume, this might be interpreted as the work of insiders acting before news that could affect the company is announced. The tape readers would then act similarly, hoping their intuition was correct.
Since that time, the stock ticker has been replaced by a massive electronic network capable of analyzing and reporting trade data throughout the world. That technology has led to changes in the way the investment industry functions. One of the more unique positions in today’s landscape is that of the day trader.
Definition of Day Trading
By definition, day trading is the regular practice of buying and selling one or more security positions within a single trading day. No position, long or short, is held overnight. Day traders frequently deal in thousands of shares, often with leverage, and look for small-percentage profits on each trade – often less than $1 or $2 per share. They take positions based upon their analysis of a stock’s probable price direction within the trading period.
Popular day trading strategies include the following:
According to a 2013 Gallup Poll, more than half of working Americans expect to retire by age 65 or earlier. However, this expectation stands in stark contrast to their practical readiness for retirement.
The 2013 Retirement Confidence Survey, performed by the Employee Benefit Research Institute and Matthew Greenwald & Associates, delivers the following unsettling statistics:
In 2013, three of four Americans had total savings of less than $25,000, and an astounding 28% had less than $1,000.
Less than half of Americans have any idea how much money they will need during retirement or how much they have to save in order to reach that amount.
Almost two-thirds of all workers feel they need more than $250,000 in savings, 40% estimating they need at least $500,000.
Six of ten workers contribute to a retirement savings plan through work, but the average is skewed heavily in favor of those who earn $75,000 or more annually – 94% of those who earn $75,000 or more versus 24% of those with incomes lower than $35,000.
Only one in four of workers feel very confident that they will have enough money to take care of basic expenses, not including healthcare, during retirement – and only 14% think they will have enough money for healthcare.
Despite the probability that many Americans will have to rely on Social Security and Medicare for the bulk of their retirement and healthcare expenses, a FindLaw.com survey reveals that 30% of workers lack faith that these programs will be viable when they retire. Many economists analyzing the existing demographic and savings data project that tomorrow’s retirees need to save more, work longer, and get by with less than today’s retirees do. If that potential fate discourages you, implement the following tips as soon as possible to improve your likelihood of enjoying a comfortable retirement.