As baby boomers reach retirement age, our perception of a pensioner or old age tends to change. Mick Jagger is now 60 years old and still performs. This is far from the image we had of a pensioner growing old!

The challenge is no longer to survive to an advanced age, but to live a long, healthy life in order to benefit from the fruits of one’s efforts. After passing the age of fifty, the maintenance of health must become a priority. The consequences of loss of health exceed the simple loss of pleasure of life. There is also a potential risk of significant medical expenses that could become a deep money pit.  

There are many books praising the merits of exercise and good food, but it is not a question of becoming a marathon runner, but of modifying some life practices in order to maintain one’s good health.

It is important to identify living costs in order to invest well and to ensure one doesn’t spend more than necessary. To manage one’s finances well also reduces stress levels. This exercise is important even for people who have significant financial resources. Many people underestimate the income needs for their retirement.

Sometimes they are a senior executive accustomed to seeing their employer assume a part of their living costs (expense accounts, subscriptions to gold clubs, luxury cars, etc). Sometimes they are individuals who have deferred traveling or the purchase of second homes until retirement.  

It is preferable to face reality and to set oneself realistic objectives rather than awaken too late only to face a difficult situation.

When one is living off investments and is not in a position to replace the capital, it is prudent not to take risks, and to have a return on the investment which supports the value of the capital.  

The concept of the ideal allocation of investments does not exist. On the other hand, it is normal to seek to reduce these risks by using different categories of assets. It’s important to understand that the absence of risk does not exist since inflation and taxes reduce capital even for the most conservative investments.

An allocation of your investments will have to take into account:

cost of living expenses
income tax situation
tolerance for fluctuation of the market
economic situation.