Retirement Planning

With sound financial planning, a nice retirement lifestyle can be had even when retiring early and with a moderate asset. We used the free Retirement Planning Calculator offered by the FinCrafters mobile app for this analysis. This tool enables you to calculate how much you could withdraw in retirement based on your current income, savings […]

From the industry research on retirement strategy, we have Bengen’s 4% withdrawal rule for taking retirement income, and we have Pfau’s 16.62% savings rate requirement to be able to draw half of pre-retirement income during retirement. We looked at two industry research studies about how to attain a sustainable retirement lifestyle. Money management fees and

Pre-Tax and Post-Tax buckets perform better than Tax-Deferred and Taxable. However, Post-Tax accounts provide the best shelter from future taxes. Tax buckets may be categorized as Taxable, Tax-Deferred, Pre-Tax, or Post-Tax accounts. Account examples and tax treatments are summarized in the table below. Detailed account characteristics are captured in “Tax Treatment of Investment and Retirement

Post-Tax accounts, both retirement accounts and non-retirement investments, provide the best shelter from taxes. We have classified various investment and retirement accounts based on their tax treatment. The tax treatment differs between new contributions made to the account, growth from investments and money taken out in the form of a withdrawal or distribution. Withdrawals after

The value of a nest egg is most subject to market fluctuations during the period right after one’s retirement. This is also called the sequence of returns risk. Sequence risk is the impact that high/low sequence of market returns have on asset growth. It is one of the key factors discussed in our blog “Retirement

Many personal and external factors could adversely affect wealth and expenditure in retirement. Let us examine some of the factors that characterize the retirement period, starting with personal factors first. About 85% of the population is retired before turning 65. Most people enter retirement with little opportunity to be able to renew their earning potential.

Social Security benefits can start to be received as early as age 62. However, delaying it will eventually prove more beneficial if one expects to live past their late 70s. About 10,000 people retire every day and half of these do so before they turn 60. Age 65 is typically associated with retirement, and not

With entitlement programs requiring a growing share of the federal budget, benefit cuts and tax increases are likely in the future. Here is a high-level view of US macroeconomics. The current Federal budget operates at ≈20% of GDP. Let us take a closer, more detailed look at the expenditures from the $4T Federal budget for