Chapter 21

Retirement Needs Analysis

Introduction

Once individuals have decided to make retirement planning a priority, they need to move beyond which plan type is best for them to save with and instead focus on developing a projection of their personal retirement snapshot. Any model for making forecasts is only as good as its inputs. As is said of nutrition…garbage in, garbage out. Assumptions need to be made for retirement age, life expectancy, retirement spending levels, inflation, and investment returns. All five assumptions involve both a degree of science and a degree of finesse. Retirement spending levels is perhaps the easiest to estimate, although each variable is a moving target. It matters most what the assumptions are closest to retirement, ...

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