Retirement Math

Retirement planning is as much art as science.  There are all kinds of “rules-of-thumb” that  are used to create “retirement math.”  Should you save 11 times, or 20 times your income to retire?

The focus on pre-retirement income can be misleading.  Instead, estimate what your retirement expenses will be and how much of that will be paid for by guaranteed income like pension payments and social security.  The gap between expenses and guaranteed income can be filled by either reducing expenses or generating income from investments.

If the gap is to be filled by portfolio income, there are a lot a estimates that have to be made.  A good RIA can help you make some educated assumptions.

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