Older investors need to earn more on investments
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Chris Cooper, CFP: In his own words

Chris Cooper is a Certified Financial Planner, owner and founder of Chris Cooper & Co. in Toledo, Ohio. Cooper's practice specializes in working with the elderly, people who are about to retire and small-business owners. He's a plain-speaking Midwesterner who's helped clients shore up their assets in an area of the country that's seen its share of economic downturns.

Helping the kids
Most people don't realize how much money they're going to need in retirement. Here in the Midwest, a lot of retirees skinny down their lifestyle after a few years in retirement. They might have a health issue that scares them, so they cut back on travel and the like. They're spending less money and building a surplus. Then they think they don't need the money and they start giving it to the kids without realizing they may live another 30 years. The middle class, especially, would rather loan their son or daughter $20,000 for the down payment on a house than have the child take out a piggyback loan. Sometimes they start depleting their principal. I find that gifting is a major problem.

The house
People pay their house off too fast and then waste the house payment. They make the mistake that the house is an investment -- which it isn't, especially in the Midwest. A house is just a shelter. They should treat it like a car; it's not really appreciating. They would be better off taking that extra payment and investing it in the stock market. That's the only thing that has worked the last 25 to 30 years. People only remember the stock market when it goes down. And yet they never remember houses going down in value.

When you get to retirement it doesn't matter if your house is paid for -- you're not going to live there anyway. It's going to be the wrong kind of house, the wrong neighborhood; maybe it has stairs and a basement that you can't handle anymore because of bad hips or knees. People get this attitude that they want to have the house paid so they can lay in it and rot for the rest of their life. They're investing in rotting assets. It doesn't matter if the car is paid for, the house is paid for, the life insurance is paid for -- it doesn't matter as long as they have income. The only way you build income is invest in financial assets.