Quote:
Originally Posted by Michael G.
Have you notice when the subject comes up about retirement and savings in
tv, magazines or visiting your financial adviser, you're supposed to know these questions.
They want you to guess how long you're going to live ....WHAT?
They want to know how long your savings will last.....WHAT?
Both these questions for most people are impossible to answer entering into retirement.
How can we even come close to an educated guess?
Your Thoughts
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I took a different approach. Maybe 25 years ago, I built a giant spreadsheet with all of my assets, all of my income sources, and all of my expenses. I incorporated the ability to make assumptions about inflation and returns on my assets, as well as tax rates.
I used all of that data and my assumptions to project when I would run out of money. Most reasonable scenarios (without selling my houses) put that number at about 105 years of age. At that point I need to be dead or face a significantly reduced standard of living.
As people are seeing today, it is best to have a generous assumption for inflation, because that is the killer of retirement plans, that and bear markets.