mickeyd
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
This WSJ article is too busy refering to percent of pay to reflect on the fact that what you really need to plan your retirement income for is projected expenses in retiremant not what you made back in the day.
Still, it is a pretty interesting article.
Of course, Mr. Farrell is making three important assumptions: that 80% of your pre-retirement income will suffice in retirement; that 5% is a reasonable rate of withdrawal from your nest egg; and that your savings will return 5% after inflation.
If anything, these assumptions are generous. Some financial planners would argue that people spend just as much money in retirement (on travel, home improvements, health care, etc.) as when they were working full time. Meanwhile, a withdrawal rate -- and a real rate of return -- of 4% would be regarded as more prudent figures.
[url]http://online.wsj.com/public/article/SB113788564183552969.html?mod=sunday_journal_primary_hs [/url]
Still, it is a pretty interesting article.
Of course, Mr. Farrell is making three important assumptions: that 80% of your pre-retirement income will suffice in retirement; that 5% is a reasonable rate of withdrawal from your nest egg; and that your savings will return 5% after inflation.
If anything, these assumptions are generous. Some financial planners would argue that people spend just as much money in retirement (on travel, home improvements, health care, etc.) as when they were working full time. Meanwhile, a withdrawal rate -- and a real rate of return -- of 4% would be regarded as more prudent figures.
[url]http://online.wsj.com/public/article/SB113788564183552969.html?mod=sunday_journal_primary_hs [/url]
