Lessons for Later Life from Madame Bovary

Courtesy of Jerry Murbach, doctormacro.com

Good literature draws us near and shines imagined light on hidden corners of our common nature. In retirement we have time to occasionally relax with a good book and examine some of our own unlighted places.

One appealing aspect of course is that most dedicated reading occurs in a favorite chair, and who is to know if a reader sometimes dozes off? That’s part of retirement too.

I recently read Madame Bovary, written by Gustave Flaubert and published in mid-nineteenth century France. The book is often on lists of great novels, and it concerns a theme that is always in fashion—adultery in marriage. At the same time, it goes deeper than adultery and treats aspects of human nature that bear heavily on today’s world. Continue reading

Offering Responsible Help

The last post related how emergencies can put a retiree’s living standards at risk. Now the discussion turns to thinking and working through emergencies in ways that manage the risk appropriately.

If retirees pay regular living expenses from their investment portfolios, and then spend some of those investments to resolve emergencies, they put future withdrawals at risk. It’s different in middle life when living expenses are paid from salaries or wages, and savings are commonly used for emergencies.

Some Financial Approaches

One solution is to set aside a portion of a retirement portfolio for emergencies. A retiree with a $500,000 portfolio could set aside $100,000 for emergencies, using only $400,000 for ordinary living.  If the withdrawal rate is 4 percent, the retiree would withdraw $16,000 annually for ordinary expenses. The $100,000 emergency fund would be left alone.

In addition, retirees have other options:

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