Q. Am I living the American Dream--- or will there be a rude awakening down the line? I am 85 years old, happily married for over 60 years with four grown children. Our comfortable home was paid for 30 years ago. We have a nice vehicle and no debts.

I'm not bragging....just thankful. I am not in stocks, bonds or real estate. Just savings. We have about $285,000 in a savings account that we do not need to touch. It just grows. Our income consists of a $34,000 pension with cost-of-living increases, $8,000 from Social Security, and $14,000 from an income fund IRA that I'm trying to eliminate at a rate of $1,200 a month. It should last until I'm 90. That’s a total of $56,000.

Our total expenses--- including income taxes, property taxes and health insurance--- are about $35,000. We buy only the best. The rest goes into the savings account monthly. We are in fairly good health. Is there anything wrong with this picture? We have never had a financial adviser (or lawyer!).
---R E.M., by email

A. You have good reason to be very thankful. And, no, I don’t think you will suffer from a rude awakening sometime in the future. At your age, your assets should carry you through. While it may take incredible achievement to become vastly wealthy in America, life is not so demanding if you simply want to live comfortably. The basic elements are in your note. Here they are as a list:

  • Marry, and stay married. The first part is easy. The second part is more difficult. But it’s a great measure of capacity to adapt and change. The responsibility of having children teaches us to defer and to live on less because the children need more.
  • Be employed and stay employed. The fact that you have a sizable pension indicates you were a reliable and productive employee for quite a few years. It also means you benefited from having an employer who did a lot of your saving for you. So you never needed an investment adviser, and you could manage your basic saving on your own.
  • Live within your means. Your pension and Social Security benefits, alone, are greater than your annual expenses. You find this easy to do but, trust me, many don’t. We live in a society that plays to grandiosity in all things.  Living within your means allowed you to save enough money to build a comfortable nest egg.

Note that there are no miracles on this list, just consistency and the rewards of time. Sadly, the young are not so blessed:

  • Employment stability, even for reliable and productive workers, no longer exists.
  • Our pension system is being dismantled. Our corporations no longer take the responsibility for either saving for our future or for managing the savings. So many people need to have a financial adviser.
  • Advertising and electronic media have cultivated envy and expansive spending in ever more invasive ways. So it is a lot more difficult to lead a life of modest spending.

Q. I am diversifying my asset allocation and have been told to add global bonds, which I do not understand. I currently have 35 percent in muni bonds and 65 percent in diversified stock index funds. I am 62 years old and in a high tax bracket. My plan is to earn income until 67 or longer.

What is your opinion on global bonds for my situation?
---R.B., by email from Houston, TX

A. Like it or not, the long-term direction of our currency is down. That makes owning some foreign bonds a good idea, because your return will be both the yield you earn and the possible increase in value of the bonds because they are in a currency that is appreciating against the dollar.

You can’t, however, just buy any global bond fund. In addition to the usual problem of high expenses, many international bond funds hedge their currency risk and, therefore, lose much of the benefit of the declining dollar. One simple foreign bond fund is the SPDR Lehman International Treasury Bond Index exchange-traded fund (ticker: BWX).

Another thing to note is that the dollar does not fall in a comfortable and reliable way. Get ready for lots of ups and downs because, believe it or not, there are governments that are even more irresponsible than ours.