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Retirement income planning
originally posted: 11/22/2006
reposted: 2/18/2011 This post has not
been recently reviewed or revised by the author and may be out of date.
If in doubt, please send a new question or ask for an update.
Q: I read that I should plan to
replace 70% of my current income in retirement. Why is that?
A: The rule of thumb you read has
been around for years and unfortunately, has little value in retirement
planning today. The assumption was that your income tax would decline
and your work-related expenses would decline, so that in retirement you
need less income than you need now. Today's active retirees tell an
entirely different story. Those who can afford to spend lavishly for
travel and those who are engulfed in rewarding hobbies ranging from
golf to stick car racing know that it costs much more to be an active
retiree than to sit at home.
Forget the 70% figure and plan to replace 100% of your pre-retirement
income.
Summary
More resources:
www.wealthmanangement.us.com
