1. Wednesday, September 5, 2012 - 8:14 AM
As an overview, it's pretty fair. I might have expected a discussion on SWRs as part of the piece, but anybody who's in or near retirement should be familiar with SWRs. Tons of threads on retirement management over at Bogleheads forum, might I add.
135 posts since
Feb 14, 2011
Rep Points: 917
2. Wednesday, September 5, 2012 - 8:33 AM
I would not be so concerned with any retiree outliving their savings considering all the stress we are coping with just trying to survive these days. Stress can cause aneurysms, heart attacks, seizures, cancer, and a multiple of other stuff to take us all out way before our 90's. People who live to be 90 or either stuck in beds in nursing homes or living on a farm just talking to their cows and goats. City people can drop young just reading the internet or watching the news on tv. I'm only still alive out of just spite! I also want to see if our nation is stupid enough to give our prez another 4 years to throw us into even more financial turmoil. On that note, I think I will take my meds and see if I can survive another day.
944 posts since
Aug 10, 2011
Rep Points: 4,141
3. Wednesday, September 5, 2012 - 11:02 AM
For young people here is an arithmetic formula for retirement planning for the new normal:
1. Figure out your life expectancy, e.g. X = 80 years.
2. Figure out when you may retire, e.g., Y = 65 years of age.
3. Figure out when you start your career, e.g. Z = 25 years of age.
4. Take X - Y, divide by Y - Z. 15/40 = 37.5%.
5. The ratio in point 4 is the amount of salary you have to set aside to fund your retirement. That's right, for average people in the new normal, you have to save 37.5% of your salary, not 4% not 10% not even 20%.
6. Invest the money in something that is completely inflation-proof.
I am not an investment advisor. Read this for your entertainment value.
2,057 posts since
Apr 6, 2010
Rep Points: 10,572