The Complete Retirement Planner Blog
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...
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...
A New Year - Same Old Useless
Retirement Benchmarks
The beginning of every year seems to be an especially popular time for articles about retirement planning, and the goals that you should set your sights on to be prepared. The problem is that all the "advice" that is being offered is exactly the same as what was being offered last year. And the year before, and all the years before that. The articles are just recycled and regurgitated. The same savings benchmarks by age (that most likely don't apply to you), the same withdrawal rate rule of thumb (mostly outdated or misleading), and the same assumption about replacing a...
Using Monte Carlo Simulations For
Retirement Planning - Fool's Gold?
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 they have run thousands of scenarios to arrive at this information sounds like they have really worked hard to earn their money. But there are a few problems. To begin with, not all of these programs...