Playing the Retirement Longevity Game

All retirees and pre-retirees need to think about their life expectancy a/k/a longevity. There are at least two important reasons for this. First, one goal of your retirement plan is to limit the risk that you will outlive your money. Second, anticipated longevity is a key factor in deciding the age at which you want to claim Social Security retirement benefits.

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Test Driving Another Online Retirement Income Calculator

The “Can I retire?” assessment (sometimes characterized as the “Will I be able to retire?” quiz) typically distills down to three basic parts. The first part is a principle: We want the freedom to spend “x amount”  every year while I am retired.  (We also want our spending to keep pace with inflation, of course.)  The second part requires a careful look at (and accurate quantification) of your current retirement nest egg. Third, we have the payoff question: Can I safely generate at least an “x amount” of income from my retirement nest egg until I die?

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Net Worth and Investment Performance – Second Quarter 2012

Regular readers know that I am a big believer in net worth tracking. My reasoning is simple. When we retire, our income will come from Social Security and from our retirement nest egg. The more liquid assets we have, the more income we can theoretically generate. Net worth is one of the most direct ways of learning if you are making progress toward a reasonable retirement, at least financially.

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Predicting Retirement Expenses Using the Experiences of Others

To me, the starting point of any retirement plan is forming an accurate picture and understanding of what it will actually cost you and a spouse to live when you retire.  Several years ago I created a spreadsheet that itemizes our retirement living budget. Because we are not yet retired, our retirement budget is only a prediction. I update it regularly with more current and accurate data.

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Is Your Retirement Calculator Telling You Lies?

There are dozens of retirement calculators available online for the casual user. Some of them are published or sponsored by companies that want to sell you stocks or stock mutual funds. Because of this, retirement calculators may give you feedback that is overly optimistic. This false optimism arises because the calculator plugs in expected market return data that probably is no longer valid.

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Small Tricks to Boost Your Retirement Savings

Last week I wrote a post for the U.S. News On Retirement blog about different mind tricks you can use to help your retirement planning.  Three of the tips involved thought strategies that can help us save more by avoiding discretionary purchases and/or by motivating us in very specific ways. For example, setting aside extra cash is a lot easier when that cash is for a “go on a yearly cruise when I retire” fund.

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Confidence Boost from Retirement Planning Tools

I am a 100% self-directed investor, including using a self-managed brokerage account inside my 401(k) plan. Nevertheless, I periodically look for affirmation from objective third-party sources that our retirement investment plan is on the right path to success. I received some positive affirmation this past week, boosting my confidence in our plan. [Read more…]