Planning for your financial future requires disciplined saving and investment, but at some point you have to start investing in yourself.
It might sound crazy, but you may have to enjoy yourself a little, too.
With few exceptions, a retirement plan hits you with required minimum distributions by age 70.5. Around that point, or even a little bit before it, you need to ask yourself what you were saving for. Experts at both Voya Financial and and U.S. Bank note that in retirement you will need 70% to 80% of your current annual income to continue your current lifestyle in retirement. So if you've saved at that rate, or even above it, are there portions of your retirement plan that you'd like to see exceed your current lifestyle?
Your current lifestyle includes 40 hours or more of work each day for both yourself and, if applicable, your partner. If you don't plan on working during retirement, those are a lot of hours to fill. That's why many high achievers are continuing to work and pursue their professional passions as they age. However, there are a whole lot of you out there with dreams of retirement: of traveling to places you've never seen, getting around to those books you've never read, finally enjoying museums and theaters or even ditching that empty nest and finding a more ideal place to call home.
For many people, that leisurely existence may seem just out of reach as they age. Though GOBankingRates notes that 13% of workers have $300,000 or more saved for retirement, about 30% of those age 55 and over have no retirement savings and 26% have less than $50,000. In fact, only 26% of Baby Boomers nearing retirement age have $200,000 or more, while 31% of Boomers over 65 can say the same.
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And according to a survey by Prudential, a whopping 74% of you think you should be doing more to prepare for retirement, while 40% don't know what to do to prepare. Though 24% of workers think they'll need $1 million or more to retire, 54% have less than $150,000 saved in employer-sponsored plans. It doesn't help that 20% of workers don't believe they'll ever be able to retire, while 35% say they'll never be able to save enough, so it doesn't matter when they start saving.
That still leaves the majority of you on track to reap the rewards of your retirement planing. While your 401(k), IRA, Roth plans and various other traditional investments got the best retirement planners this far, perhaps its time that you started making some investments in yourself. We've let our imaginations run wild and have come up with more than two dozen alternative investments you can make either before retirement or with your hard-earned retirement savings.
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According to the National Association of Realtors, the median existing-home price in July was $258,300, up 6.2% from July 2016 ($243,200) and continuing more than five-straight years of year-over-year gains. Those averages range from $205,000 in the Midwest to $373,000 in Western states.
We aren't going to sit here and tell people who've lived through a housing crisis and multiple hurricane seasons that there isn't risk involved in real estate. However, if you've ever wanted a private island, a house in another country or just a summer home, there are investments far more volatile than real estate.
Yes, art has a fairly high point of entry if you're looking for the most valuable of collectibles, but you're also hitting the art market at a fairly interesting time. Total art sales soared from $260 million in 1995 to $56.6 billion last year, according to UBS Group and Art Basel. That said, the global art market shrank by 11% last year and marked its second-consecutive year of declining sales. Sellers are holding back amid global economic and political uncertainty, making the art currently on the market more valuable. With sales of postwar and contemporary works down 13% in 2016 and sales of modern art down 43%, big auction houses like Sotheby's and Christie's are suffering. However, local galleries now make up 57% of all global art sales, meaning great art is more readily available in your own backyard. If you have some level of art expertise or appreciation and either seek a piece for your personal enjoyment or enjoy an artist whose work may be of greater value, your risk is always accompanied by at least superficial rewards.
No, the happiest days in a boat owner's life aren't the day they buy it and the day they sell it. If you know what you're doing and actively enjoy boating, only that first day should rank among the best days of your life. Boats, like cars, are going to depreciate. However, Russell Shinsky, a partner at Anchin Private Client, notes that a boat or yacht broker can help minimize the damage if you articulate exactly what you're looking for. What they can't minimize is sales tax (on the first $230,000 for boats in New York) or use tax (paid in whatever state the boat is registered). That said, paying for a boat through a mortgage allows buyers to deduct interest, while boat sales tax is generally deductible on either a federal or local tax return. Property tax on you boat is also deductible, though boat dockage fees are not. If your first motivation for buying a boat isn't enjoying time on the water either on your own or with your family, it'll seem less like an investment and more like a strong current that just keeps pulling your money out to sea.
Yes, there was a whole lot of grumbling when the cost of the National Parks Service Senior Pass, for those ages 62 and over, jumped from $10 to $80 at the end of August. However, that price hadn't changed since 1994 and the new price is still a steal. The current price of an annual pass for folks under 62 is $80. However, the $80 senior pass is good for the lifetime of the person holding it. It also allows up to three traveling companions in for free and provides discounts for camping, boat launches, swimming and guided tours. If you're uncomfortable just handing over $80 all at once, you can buy $20 annual Senior Passes and exchange them for a lifetime Senior Pass once you've purchased four years' worth. It isn't the ridiculous deal it once was, but $80 for a lifetime of free access to 2,000 National Park Service, Fish & Wildlife Service, Bureau of Land Management, Bureau of Reclamation, Forest Service and Army Corps of Engineers is still a bargain.
Yes, this is aimed toward the Senior Pass crowd, but if your dream in retirement was not to be tied down and see the continent, there are a whole lot of folks who do so in trailers and motor homes. If you decide to go on the road full-time, most folks who choose that lifestyle set up residency in South Dakota (no income tax, 4% sales tax, less than $15 in vehicle registration fees) and hit the road. You swap property insurance for auto insurance, rent or a mortgage for about $3,000 in fees and a full suite of utilities for whatever you pay in electric. Now, your level of comfort with this lifestyle will dictate whether you're OK living out of a $35,000 trailer or a $3 million house-sized bus, but if the road and a continent full of wonders beckons, this sure beats paying for a fixed home, airfare and hotels.
According to a recent RBC Wealth Management poll, 63% of Americans age 50 and older say travel is an important retirement goal. However, about half say the high cost of travel could prevent them from achieving that goal.
Another survey by The Principal found that 20% of U.S. workers said travel blew their budget for 2016, putting its cost on par with food and groceries (20%) and just below dining out (25%). Financial firm UBS, meanwhile, discovered that 73% of Millennials (ages 18-34) focus on short-term needs and goals, such as homes and travel and believe that retirement is too far away to worry about. Nearly 30% have traveled the world for a month or more, more than half with retirement accounts have or would consider dipping into them to make a large purchase and with 25% have already raided their retirement savings for those purchases.
"Everyone is worried about whether they will have saved enough to fund a comfortable retirement," said Tom Sagissor, president of RBC Wealth Management-U.S. "The closer people get to retirement age, the more they begin to look at needs vs. wants. Often times, because of fear, the needs win out, putting bigger dreams like a trip to Greece or Beijing on hold. But there are many ways to rebalance assets to make travel, if that is indeed a goal, a reality."
However, age 50 through 65 is when most travel discounts start kicking in. While senior airfare discounts aren't what they once were, they still exist. However, those 10% discounts are outdone by a 15% Amtrak price cut and 20%-50% hotel discounts. If companies want to subsidize your vacations, and we haven't even touched travel company discounts on package tours, why not take the free money they're offering and laugh at all the youngsters overpaying for the same trip.
Do you know how much you'll have to pay in tuition if you want to fulfill your curiosity or even learn new skills at college after age 50? Nothing, if you know where to look. Going back to college and continuing your education is a great investment in yourself, but the AARP and many local colleges and online programs have made it easier to get that experience for free. As the AARP points out, The Massachusetts Institute of Technology, Stanford University, Harvard and the University of California at Berkeley that provide uncredited courses online. Consumer Reports notes that some schools will waive tuition for students age 60 and over, while schools in every state will either waive or deeply discount tuition for students over 60. While not all of these institutions offer courses for credit, there are enough out there that you can easily pursue another degree. If that isn't your goal, however, some of the greatest educators in the country are available to you for free as part of audited courses.
Doctors may have mixed views about beer being a sound "investment" at this age, but nobody says you have to drink them to enjoy them. If you took our advice about travel earlier in this slideshow and found yourself at, say, Brasserie Cantillon in Brussels, some of the beer you'll find there will be worth several times as much at auction here in the U.S. While reselling beer is illegal in this country anywhere other than an auction house, that hasn't stopped an entire online industry from springing up around it and driving the price of single bottles of beers like Toppling Goliath Brewing Company's Kentucky Brunch Brand Stout into the $5,000 range. We don't advise outright entering a life of crime in your retirement years, but if your RV just happens to be in Decorah, Iowa, as Toppling Goliath is releasing its newest vintage of KBBS, we wouldn't blame you for picking some up and testing the market.
If your ideal weekend involves going through antique and trash shops looking for treasures, there's a whole culture of dealers and television shows like Antiques Roadshow, American Pickers and Pawn Stars that exists simply to inform you that your have a potentially lucrative pastime. We're going to emphasize "potentially," because antiques are a tough market to pin down. There isn't much centralized public data for price comparisons, since most antique deals are private affairs. Also, you don't flip an antique the way you flip a house. To make it a worthwhile investment, you basically have to sit on it for a number of years, hope that the style or maker of the item gets popular and really hope that whoever owned it last either did nothing with it or didn't do too much refinishing or replacing. Plus, there's the small issue of demand: Antiques may have an ideal worth, but they're only worth that to a specific buyer willing to pay for it. It's why certain items in antique stores are snapped up the minute they hit the floor, while others linger on shelves for years. Antiquities comprise a very specific market with specific tastes. But if you have the time to both find treasure and wait for the people who love them, antiques can be one of the most sound investments you'll make.
It's true that just about anyone can fund a movie if they're willing to contribute to a Kickstarter campaign and take T-shirts, Blu-ray discs or a day on set as their return on investment. However, if you'd like your investment to yield benefits beyond a finished product or a seat that the premiere, it's going to cost a lot more and get a lot more risky. Three years ago, Forbes pointed out that the group Media Society allowed investors to put money into a slate of three to five films for an all-encompassing $150,000 price. There are no guarantees in that investment model, and a whole bunch of films still end up being bombs. However, if you love films and are thinking of making a business out of them, those kind of investments are where you start. However, if your goal is simply to help films get made and to occasionally sit next to Spike Lee at a Knicks game, there's always crowdfunding.
We've already noted future retirees' concerns about health care, but what if your concerns about staying healthy were coupled with fears about who you'd hang out with, where you'd host your sons's second wedding and who'll make you a poolside smoothie and avocado sandwich when you're feeling peckish? Any rube with a Planet Fitness in the local strip mall can join a gym, but if you're looking to stay fit, keep busy and enjoy plush amenities, this is your chance to join the club. Expensive, you say? Well, if you're one of those folks who's downsizing their life anyway now that the kids are gone, why don't you take some of that cash you're not spending on a mortgage and put it toward a membership at a place like Chicago's East Bank Club, where a $700 initiation fee per couple and $325 in monthly dues get you access to fitness facilities, personal trainers pools, indoor golf, kayaking, yoga and pilates classes, nutritionists, tennis and squash courts and a roof deck and pool with gorgeous views of the city. The East Bay Club is just an example, but access to spas, salons, multiple restaurants, private event spaces and people with similar interests that seemed like an onerous investment during your working and parenting years could be a fine investment in your well being as you approach retirement.
There's a difference between being someone who goes to the occasional Broadway show or touring production and someone who is a patron of the arts. If you love theater enough to be the latter, patronage comes with enough perks to make it worth your while. At New York's Atlantic Theater Company, for example, patronage ranges from a $500 donation with numerous discounted tickets to a $10,000 tier that includes seats, dinners, backstage tours, cocktail parties, dress rehearsals and more. By contrast, the Papermill Playhouse in Milburn, N.J., typically solicits donations between $100 and $750, with the upper tier getting access to dress rehearsals, backstage tours, donor-only events, complimentary vouchers for friend and more. Even big companies with large-scale sponsorships rely on patrons to keep them afloat, making this your chance to support the productions you love.
The summer movie season was awful in 2017. With fewer people going to movies than they did in the mid-'90s, the value of going to theaters is in question. After all, why wager more than $10 on any one movie when that same price gets you a month of just about any streaming service? Well, there are still people out there who value the theatergoing experience, as evidence by the number of customers who stormed theater-based subscription service MoviePass after it lowered its monthly price from $50 to $9.95. That price allows you to see one movie a day for a month at various theater chains -- though theater giant AMC has already expressed displeasure with it. MoviePass bulked up to 150,000 subscribers this year after finishing 2016 with just 20,000 and it expects to have 2.5 million subscribers in just a few years. However, if you're less of a multiplex person and enjoy your local cinema's more eclectic offering, independent theaters have offered memberships for years. As former "film buff" members of the Coolidge Corner Cinema in Brookline, Mass., my wife and I got $3 tickets to shows, concessions discounts and the occasional free popcorn vouchers. However, if we'd upped our $140 annual membership to $400, we'd get free films Monday-Friday and $3 shows on the weekend. $550 a year gets free movies for two, while $1,200 covers either a family of four or a couple and two guests. If you have a lot of time on your hands and are at the movies often anyway, it's a great way to support an independent local business while also keeping the industry you love in business.
Researching this particular investment made me feel like a moron. The Portland Art Museum in Portland, Ore., isn't the Met, but it hosts a full season of rotating exhibits as well as 42,000 artifacts on a two-block campus. I've been on several occasions and find a new gem each time, but have never inquired about membership. For $65, you get into the museum for free all year. For $95, two people get free access. However, for $150, you not only get access to this relatively tiny museum in Portland, but to 18 other museums including the Fine Arts Museum of San Francisco, Museum of Contemporary Art in Chicago and the Seattle Art Museum. Sure, you can spend $2,000 a year for VIP access and other perks, but $150 a year covers not only your home museum, but museums from New Orleans to Victoria, B.C. I'm nowhere near retirement and giving this serious consideration, so it's not difficult to imagine an art lover with a whole lot of time on their hands doing the same.
All of those perks that apply to arts memberships tend to apply to sports season ticketholders as well. Whether it's access to special events, discounts at stores, priority entry or behind-the-scenes access, teams tend to treat their season ticketholders extraordinarily well. In many cities, the toughest part is just getting your hands on season tickets. For an example, I looked at a team in my corner of the country that has no waiting list for season tickets, rarely fills its building and has 80 games a year to deal with: The Seattle Mariners. This team hasn't been to the playoffs in 16 years, so it lays on the perks pretty thick. Mariners season tickets are 35% less than those sold individually, they can be printed at home and easily transferred, they give fans access to private dining facilities, they provide access to presales for spring training and Safeco Field events, free tours of the stadium and free media guides. Best of all, as a Mariners season ticketholder, you're buying in low. When young talent eventually starts paying off and the playoff dry spell ends, the value of your tickets is only going to increase... if only because it can't get much lower.
"What difference do we make in the world, how do we leave our mark in this would and how do we leave this world a better place?" says Masood Vajdani, founder of MV Financial in Bethesda, Md. "It sounds cliched, but a man could make a change by giving back to a world that allowed him to be successful enough to make $20 million, $30 million or $40 million. You could give that money and make a difference to causes that you care about, and you avoid taxes and get the government to pay for it."
Sure, you could donate to charity for selfish reasons. The Internal Revenue Service allows taxpayers to deduct donations up to 50% of their adjusted gross income when those gifts are given to public charities or certain private foundations. Even for gifts to family or other non-qualifying foundations, the deduction can be as large as 30% of all adjusted gross income. Of course, the more you have to give, the greater the tax benefit. For example, an individual in the 28% federal income tax bracket that makes a $500 charitable donation, will see their tax liability decline by $140 (28% of their tax bill).
For wealthy individuals subject to either federal or state estate tax, the assets they give to qualified charities will escape the tax. With a top federal tax rate of 40%, $4 out of every $10 in assets subject to the tax will go to the government instead of to family members and other loved ones. Not only is the family losing that money, but it's losing a valuable opportunity to learn about how to manage whatever wealth remains.
"For those individuals with donative intent, donating assets to charity may not only reduce their estate tax exposure, it can also be used as an opportunity to teach their beneficiaries about thinking less about themselves and doing more for those less fortunate," says Shomari Hearn, certified financial planner and vice president of Palisades Hudson Financial Group in Fort Lauderdale, Fla. "In fact, by informing loved ones of their philanthropic objectives, donors can get their family involved in the process by holding family meetings to discuss giving goals, selecting the charitable organization(s) that will receive their donations, establishing a vehicle (like a donor-advised-fund) through which to donate , and evaluating the impact of the donations that have been made. This is an effective way to pass core values on to younger generations."
James Revels, a partner at Citrin Cooperman, says that commitment to philanthropy should begin when benefactors are still alive to see the results. Revels' firm uses various types of trust structures to fund family foundations while these individuals are alive and educate later generations about the wealth they'll be working with and the charities that will fulfill the family goals. If a wealthy individual has wealth to pass along. but faces a $5.434 million gift tax cap, Revels notes that they can place money into a special type of trust that is viable for a specific number years. Assets including stocks, bonds and cash are added to the trust, which has to pay a certain sum of money to a family foundation that is created at the same time.
The family foundation can use family members as foundation members or directors, depending on how you structure the foundation. Over a 5-, 7- or 10-year period, this trust will pay an annuity to the foundation, which is required to pass out 5% of the value of the foundation to various charities.
"The generations get so see the money come into the foundation," Revels says. "They don't have anything to do with the trust, but you can have family meetings each year to discuss what charities you're going to give to. They can take field trips to various organizations so that second and third generations and even further can get an idea of the charitable concept and when it's good to give money to some places and when it's not so good to give to places -- to teach them proper philanthropy, so they're not just throwing it away to who knows where."
"It's a win-win," Vojdani says. "It's a win for the family and a win for the charitable association the family believes in."
There are somewhat mixed reviews on the futures market for wine from Bordeaux, France. Last year, our Tracey Byrne said Bordeaux futures were worth savoring.They're sold in the spring when wine is still in the barrel and the wine is delivered two years later. If nature is kind, the value of your wine will exceed the futures price by the time it reaches you. However, it's an approach that requires some research to distinguish a potentially great year, like 2015, from off years. It requires visiting wine chat boards, talking to brokers and taking a fairly obsessive approach to the commodity.
Around the same time that Byrne wrote her piece, Joe Czerwinski at Wine Enthusiast dubbed wine futures a "fallacy." He wasn't wrong. London wine exchange Liv-ex notes that vintages beat futures prices just four times between 2005 and 2014. Even the 2009 and 2010 vintages, which have become legendary, never exceeded their futures prices. With prices of 2015 futures jumping 20% to 60% percent over 2014 with help fromfirst-growths, like Château Margaux and Château Haut-Brion, Czerwinski recommended skipping those $540-$650 bottles for "beautiful, mature wines" like the 1985 Château Margaux ($500) and 1995 Château Haut-Brion ($480).
Bordeaux futures are a tough gamble for wine lovers. When in doubt, go with the known commodity.
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A dedicated comic-book collector is always going to make their weekly run to the shop anyway, but one who eyes comics as an investment has more incentive than every to invest. As we discovered last year, the right comic book can outperform gold and the S&P 500 with its return on investment. However, if you want to know what the next valuable comic will be, you'll have to pay attention to the properties that movie studios are buying and the characters that are going to be introduced. You have to listen to Disney's conference calls about Ant Man and Black Panther movies to see what characters they'll be facing and then find out in what comics they debuted. Groot from Guardians of the Galaxy debuted in Tales to Astonish, No. 13 back in 1960, but that book was $535 before the film version of Guardians of the Galaxy debuted and $4,000 afterward. If you still have it in you to go to comic cons, hang out on message boards, listen to gossip and dive into the occasional box of comics, you could turn your hobby into a decent investment opportunity.
Not every old car becomes a valued collectible. Even hot cars in high demand sometimes end up old and worthless. However, if a popular and otherwise benign car has a particularly rare engine type, had a redesign that lasted all of a year or had modifications that have become hard to find years afterward, even those everyday cars could be lucrative classics. As '60s and '70s muscle cars find their sweet spots and '80s and '90s cars that aren't European supercars continue to age poorly, it becomes increasingly difficult to find hidden gems tucked away in garages. However, if you have the passion to restore one of these vehicles or the knowledge to distinguish rare beauty from common popularity, this could be a lucrative labor of love.
There is a lot of worthless garbage out there passing itself off as "collectible.
It makes us pity the sports fan trying to distinguish museum pieces from the mass-produced flotsam that floods memorabilia shops and trade shows. With millions of people holding on to items they think will be "worth something someday," and countless frauds preying on their ill-conceived notions of big-money returns for largely sentimental value, we had a really tough time recommending memorabilia as an investment. However, if these items produce some level of comfort or nostalgia for you or are associated with a particular moment or event in your life, there's a strong chance you'd never part with them anyway. That's about the best memorabilia investment you can ask for, and that's exactly what makes memorabilia worth pursuing.
We'll admit that there's a ton of overlap between theater, museum and cinema patrons and the folks who support both PBS and NPR, but there's a reason for it. When you listen to Morning Edition or Wait, Wait, Don't Tell Me or watch Jim Lehrer or Call The Midwife, you're placing value on media that isn't created by a shareholder-held company or strictly beholden to sponsors. You're identifying something worthwhile to you and something deemed so worthwhile to the public good that it exists under the Corporation For Public Broadcasting with taxpayer support. However, as with anything taxpayer-funded, PBS and NPR are at the whim of political winds and, of course, viewers and listeners like yourself. When the political side clamps down on the funding, it's on listeners and viewers to pick up the slack. Writing this from a market in Portland, Ore., where the NPR station is the No. 2 station in the city, it's clear the impact that donors can have on both its programming and reach. If you're watching or listening and enjoy it, at some point your support has to be about more than demographically specific tote bags.
You want a free press? You want to limit the influence of shareholders and sponsors on editorial content? You want to keep various, vibrant sources of information viable to make sure you aren't getting your news from less than a handful of agenda-driven sources? Well, it may be time to actually invest in it, and we don't mean buying shares of News Corp, The New York Times or event TheStreet. Subscriptions help remove the money you don't want involved in the news-gathering process and encourage an independent press. Granted, you can wear that subscription like a badge, flash a tote bag and buy Wall Street Journal wine, Atlantic onesies and New York Times candlesticks. But, far more importantly, you can invest in institutions that you value and see immediate returns.
It isn't the most "alternative" of alternative investments, but you're not going to be able to enjoy yourself unless you get this squared away first.
Though a UBS Wealth Management Survey indicates that only one in five wealthy retirees worry about outliving their assets, their health remains an issue. Of those surveyed, 73% say getting sick is their top retirement concern. Nearly half (47%) are also worried they will not have anyone to take care of them.
In that small way, they share the fears of the average U.S. worker. Voya Financial points out that 59% of working Americans are very or extremely concerned about outliving their retirement savings -- with 74% having never calculated their monthly retirement income needs. Both Voya and U.S. Bank note that retirees will need 70% to 80% of their current annual income to continue their current lifestyle in retirement.
That's easier said than done. The Voya study found that 61% of workers were significantly concerned about their inability to pay for healthcare expenses in retirement. Meanwhile, 58% were also significantly concerned that they would end up with fewer Social Security benefits than expected. That's not great news, when 45% of retirees plan to rely on Social Security as a major source of their income in retirement and 66% of workers planned to start taking Social Security at age 66 or younger - well short of when full benefit payouts begin at age 70.
Eric Meerman, a certified financial planner and vice president at Palisades Hudson Financial Group in Stamford, Conn., notes that workers in high-deductible health care plans can put their money into health savings accounts (HSAs), where it can grow tax-free as long as you use it for qualified health expenditures (doctors and medications, but not premiums). The Internal Revenue Service sets the HSA contribution limit at $3,400 for individuals, but bumps that up to $4,400 for contributors 55 and older.
Dan Yu, managing principal at EisnerAmper Wealth Advisors, also recommends keeping 18 to 24 months worth of savings on hand to cover yourself in the event of an emergency. With health care costs growing at a rate two to three times that of inflation and health care accounting for a third of expenses by the time a person hits 70, Yu recommends not only that cushion of savings in a low-yield account, but a more aggressive health-care savings plan for those who decide to stay on the job.
"I want to keep up with that exacerbated inflation rate, so where can I get 6% or 7%?" Yu says. "Not in fixed income, not in CDs, but in equities. But if it's something we're going to tap into, we have to be really prudent about having equity exposure when we have short time horizons."
The bad news about jewelry is that you'll pay so much on it in sales tax and markups that it almost immediately loses significant value. The good news is that if you buy what your like or favor pieces from renowned designers, it'll appreciate in value over the long term and might comprise a valuable portion of your estate. Take a look at Art Deco jewelry from 1920 to 1935, for example: The use of platinum and diamonds and the emergence of Cartier and Boucheron have given pieces from that era significant value. Meanwhile, Van Cleef, Arpels and Bulgari's postwar pieces and Tiffany's rings and earrings made their mark during the mid-century, while brooches by even popular jewelers lost value as they fell out of favor. If you manage to stumble across Lalique's Art Nouveau pieces, Cartier's Tutti Fruitti styles or Van Cleef & Arpels's early mystery settings, you'll see not only high price tags, but examples of how specialty collections can increase in value over time.
In the lead-up to retirement, you and your partner might find yourself using the catch-up options in your retirement plans to bolster savings and prepare. However, if one spouse dies, that could result in the other falling short in their retirement plan. While a whole-life policy might be an incredibly expensive fallback plan, 10- to 15-year term life policies taken out roughly a decade before retirement will provide some piece of mind for both toward the end of their savings process. Since term life tends to be inexpensive, it's a good stopgap that could be converted into a whole-life policy in some circumstances. As the folks at NerdWallet point out, a permanent life insurance policy allows holders to withdraw or borrow against its cash value. It could function as an emergency fund to cover bills if you lose your job or could fund your retirement if you come up short. The best part is that those funds can be borrowed tax-free. Granted, you're better off beefing up your actual retirement investments and making sure you don't tap into life insurance, but having life insurance in place as a fallback isn't such a bad investment in your retirement security.