The Complete Retirement Planner Blog

When planning for retirement, the first question on everyone's mind is, "How much money will be needed to fund a comfortable retirement?". That makes sense, but how you arrive at that number is far more important than the number itself. With all of the  moving parts of a financial plan, most involving forecasts of what is likely to occur in the future, being realistic and conservative with your expectations will ultimately determine how reliable your results will be. In addition, financial calculators that ask only 5-6 questions, or "planners" on financial sites that ask a few additional questions, will in...

If you’ve ever spoken with a financial adviser about retirement, they probably suggested running a Monte Carlo simulation program to help determine how financially prepared you are. These programs randomly combine historical outcomes (annual market returns for the most part) with personal financial data to arrive at a probability of success (i.e. that you won’t run out of money in retirement). Telling clients that the program runs thousands of scenarios to arrive at this information sounds like it is a very thorough, and, therefore, accurate, process. But there are a few problems. To begin with, not all of these programs...

Whether you are working on a financial plan, or actually getting close to retiring, one of the biggest retirement decisions you will have to make is when you will start to claim Social Security benefits. There are more considerations than you may be aware of, especially if you are married, and choosing the best strategy will require some careful thought. In some cases, it may even be advantageous to use some of your retirement savings to help pay expenses (if needed) for a year or two in order to delay claiming until you will be able to receive your full...

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...

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...