walkinwood
Thinks s/he gets paid by the post
Morningstar has an interesting paper on estimating the true cost of retirement. It finds that it depends on: (assuming constant portfolio composition & returns)
1. the replacement rate chosen
2. the annual change in expenses
3. life expectancy
The paper uses data from surveys etc. and finds that points 1 & 2 have different answers based on the initial spending & funding ratio (spending to net worth). Their findings on point 2 were the most interesting (and useful) to me.
I found it to be quite insightful and will probably help people who are still figuring out how much they need to save & what kind of SWR they're going to use.
A video interview
Three Main Variables in the Retirement Cost Equation
and the paper:
http://corporate.morningstar.com/ib...ociates/Blanchett_True-Cost-of-Retirement.pdf
1. the replacement rate chosen
2. the annual change in expenses
3. life expectancy
The paper uses data from surveys etc. and finds that points 1 & 2 have different answers based on the initial spending & funding ratio (spending to net worth). Their findings on point 2 were the most interesting (and useful) to me.
I found it to be quite insightful and will probably help people who are still figuring out how much they need to save & what kind of SWR they're going to use.
A video interview
Three Main Variables in the Retirement Cost Equation
and the paper:
http://corporate.morningstar.com/ib...ociates/Blanchett_True-Cost-of-Retirement.pdf