Many of you have probably filled out one of the "retirement planner"
forms available online. Plenty of tax and accounting programs also have
"Lifetime Planner" sections for folks to determine if they can afford to
retire.
These sorts of programs plug certain assumptions into a formula, such
as projected inflation rate, retirement income, anticipated spending
levels, and portfolio growth rate. After you add your personal
information, it projects how much money you'll be able to produce
annually during retirement, and how long it will last.
The first time I ran these numbers, the program said I was good until
116 years of age. At the time, I believed that if we followed the plan
as outlined, my wife and I would never have any real money worries. We'd
be set for the rest of our lives and could proudly leave some to our
children to help with their retirement. How naïve of me!
Things have sure changed a lot since then.
At the time, I'd estimated inflation at 2% and a minimum
yield on our portfolio of 6%. In those days, that was conservative.
Inflation was lower than 2%, and you could always earn 6% on a top-rated
bond or CD. (more)
Please bookmark us
No comments:
Post a Comment