Keep good records. When you make a new investment, set up a folder for it. If it is not apparent from the normal paperwork you get, add a sheet that includes all the basic information about the investment, as well as phone numbers where you or your executor can reach someone who can provide more information. Save periodic financial reports.
Keep a file for heirs or your executor. At the minimum, this should include a letter to your spouse or children that tells them where to find or ascertain your investments, insurance policies, will, power of attorney, and so on.
In your file, include a list of people who will be key in handling your affairs after your death or if you are disabled. Provide information about your insurance policies. Put together a list of your investments with their current values, as well as a list detailing the sources of your income now and your survivors’ income sources and amounts.
Rent a safe deposit box at a bank. Think about what would happen if your house burnt down or you lost all of your information in a catastrophe of some kind. Use a safe deposit box to keep original copies of your most vital documents and a backup copy of key computer files.
Review your investment status at least once a year. Calculate the ratio of your fixed income to your equity investments, and rebalance this ratio if necessary in accordance with parameters that you have established.
Always live within your means. It is impossible to stress this too much. If you are still working and you are not saving, you are living beyond your means. If you are retired and you are drawing money too fast from your investments, you are living beyond your means.
Pay attention to your health. Exercising, maintaining a good diet, and taking care of your ears, eyes and teeth not only save you money, they keep you feeling young and active. Even then, the most important kind of insurance for you is likely to be a good medical policy.
Excerpted from Henry Hebeler’s Getting Started In A Financially Secure Retirement, published by John Wiley & Sons.