Archivos de la categoría ‘Retirement Planning’
Publicado por sam - 30/04/08 a las 04:04:56 pm
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We all get pre-occupied by the rat race. Surely taking a few years off wouldn’t hurt my retirement plan. Or would it?
Anyone who wants to retire well needs to ask himself (1) how long do I expect to live and (2) how much time do I have before I retire?
The last thing we want is to run out of resources after we retire. We would rather bequeath what we have left rather than ask our children to feed us. That’s why the planning horizon is important. We need time to prepare.
Figure 1 in the gallery shows what happens when we have set aside P100,000 (for the lump-sum, just-in-case expenses) and then we add P50,000 each year to our retirement fund. Let’s assume that it generates a return of 5.0 percent per year. Seguir leyendo Dangerous thoughts on retirement: ‘Better late than never’…
Publicado por sam - 19/10/07 a las 08:10:59 am
I saw this very informative article from FinancialDominance.com. In a nut shell, the rule states that you should withdraw 4% of your nest egg in your first year of retirement and increase it annually for inflation.
If you have spent a lot of time reading about retirement planning or discussing it with your financial advisor, you have probably heard of the 4% rule. This rule causes a lot of confusion when I discuss it with family and friends. The rule itself is not complicated, but it seems that everybody has their own version of what it means and its use. I’ll try to use this post to clarify the rule and hopefully give a better understanding of its application in retirement planning.
What exactly is the 4% rule?
The 4% rule is a rule of thumb that says you should withdraw 4% of your nest egg in your first year of retirement and increase it annually for inflation. That’s it.
Where did it come from?
The 4% number is a result of a bunch of very smart people modeling how long a nest egg would last given certain withdrawal rates. From my understanding, they used a type of Monte Carlo simulation. They determined that, given a 4% initial withdrawal rate increased annually for inflation, a nest egg could last around 30 years with a decent probability. Seguir leyendo The 4% Rule in Retirement Planning…
Retirement Planning
Publicado por sam - 17/10/07 a las 12:10:30 am
CNN Money offer’s a nice article about planning your retirement.
NEW YORK (Money) — Question: An adviser helped us set up an IRA account and on his recommendation we began investing in a target-date retirement fund that charges a 6.5 percent sales fee. We’ve asked him to switch us to another target-date fund that has no sales fee and invests in low-cost index funds, but he says the fund we’re in now has a shot at better returns because it’s actively managed. Do you think we should stay with the fund our adviser recommended? - Dinh Ho
Answer: The short answer: No, you shouldn’t stick with the fund your adviser recommended. I think you ought to switch to the no-load (i.e., no sales fee) target-date fund that invests in index funds immediately, if not sooner.
But I want to explain why I come to this conclusion, so that you understand I’m not just reacting out of some reflexive anti-sales fee or anti-adviser bias. I have no problem with investors like yourself paying an adviser for competent advice. Seguir leyendo Get on track for retirement-Dump that high-fee fund…
retirement
Publicado por sam - 17/08/07 a las 09:08:48 pm
Planning for retirement is a task few people relish. And no wonder. For many people, the topic is associated with such discomforting possibilities as reduced physical and mental capabilities, infirmity or boredome without the stimulation of a career. Others, of couce, welcome retirement as a time when they can finally relax, travel or pursue other leisure activities to their heart’s content. Even for these people, however, planning is work-and long-term work at that. Potentially unpleasnt sacrifices-such as putting away $2000 or more into a retirement fund instead of spending the money on a vacation-are part of the planning process. Seguir leyendo Preparing The 30-Year Plan…
