The Complete Retirement Planner Blog
Beware Using An Average Return Rate In A Financial Plan
One of the most crucial parts of creating a financial plan is determining the expected return rates on your investments. How much income those investments will be able to generate both before and after retirement will be integral to determining how long your savings may last, but you have to be realistic. To calculate the returns on your investments, most calculators and planning tools allow only one return rate to be entered for all years. Unfortunately, this assures that the results will be skewed, and not necessarily in your favor (explained below). For this reason, if you have the opportunity...
"Sequence Of Returns Risk", And Why It Matters
As you develop your financial plan for retirement you will give a good deal of thought to the known details of your finances (e.g., monthly expenses, income, etc.) as well as to what you expect to happen in the future. One particularly important decision concerns the annual rate of return that you will use to forecast your savings/investments balances. Since you can't predict the future, you may end up relying on your (not the market's) historical results to arrive at a reasonable expectation. That makes sense, but how you choose to enter that information can have a serious effect on...
The Impact Of Inflation On Your Retirement Plan, And How To Use It To Your Advantage.
One component that is essential to account for in any financial plan is an inflation rate. As we are currently experiencing, inflation considerably above historical norms can really take a bite out of your budget. However, unusually high inflation rates are typically temporary, lasting one to three years, so when planning for decades into the future how much of a difference does an inflation rate really make in the grand scheme of things? The short answer - it makes a tremendous difference. It also provides a terrific way to stress test your financial plan.Since the rate of inflation varies from...
6 Things You Didn't Know TCRP Could Do
TCRP is a comprehensive financial planning tool, but there will always be situations that users need to account for that may not be part of the default questions/entries. Fortunately, that does not mean that those situations can't be accounted for. There is quite a bit of flexibility built into the planner if you know how to take advantage of it. The following are 6 situations that TCRP can account for that may not be obvious. You may not need to account for these specific situations, but just learning about them may spark ideas about how to use TCRP more to...
Considerations For Starting Your Financial Plan
According to a 2021 Charles Schwab study, the majority of households without a financial plan don't have one because it's too complicated and/or they don't have the time to create one (TCRP solves those problems!). Yet, of those that have a written plan, 54% feel "very confident" about reaching their goals, and another 18% are "certain" that they will reach their goals. It's clear that having a tangible plan to follow can provide a great source of comfort and will help to keep you on the right track.At the very least, everyone over the age of 30 should be planning...