Quote:
Originally Posted by toeser
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.
|
Sounds like we both put together the same spreadsheet and with similar results. The only flaw with my projections is that I never assumed a totally irresponsible Federal Reserve would allow inflation to run at multiple times higher than what a responsible saver could earn on relatively safe fixed income investments. We should hopefully still outlive our savings, but with much less wiggle room. Unfortunately , the one assumption that is impossible to predict or model is health (or the associated cost). Because of that, if you can afford to retire now, then do it because you never know? I would rather do as much as possible right now while still relatively young and healthy then work longer to be sure I have enough money to pay someone to whipe the drool off my chin when I’m too old to do it myself.