chinaco
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Feb 14, 2007
- Messages
- 5,072
An Argument: All of us would probably prefer to enjoy reaping the full rewards of our labor rather than let it expire (go unused). Stated differently, You probably value your assets less than what the assets can provide (i.e., what the money can buy). One would rather spend the money to enjoy it rather than save it. I know this is kinda philosophical. But it is also a practical issue when one retires.
One of the keys to planning for retirement is planning the spending pattern. Most of you are aware of that fact.
Now that I am planning for consumption of our assets. I am finding that it is a bit more difficult than I expected. We could take a very conservative approach and overly limit spending during retirement... but we saved it to spend it. (I am not referring to frivolous waste). Understanding spending is the key to understanding how much is needed for retirement, when one can retire, how much can be spent in retirement without exhausting one's assets, etc... And I am finding that it is not a trivial exercise!
Most planning tools I have used are very weak on planning consumption (expenses). Sure, many of them will allow someone to type in many categories, and apply a basic inflation factor... but that is about all they do. And they certainly do not accomodate the variability/probability for different economic/life scenarios.
At the end of the day, no one can completely predict/understand the future. Therefore we all will need to rely on making common sense adjustments based on the situations that arise. Probably the best that can be planned for is a range of expenditures at different phases (life stages probably tied to health and age) of retirement.
Apparently this is a gap that is being recognized by financial planners. I suspect that there will be a plethora of planning tools to hit the market soon that will help. They will probably employ techniques that are used commonly in actuarial sciences and economics.
The only tool that I have seen so far that claims to treat spending in this complex way is the ESPlanner. It is $149. It seems a small cost (investment/risk) when considering what is at stake (my retirement portfolio). Of course, if it is inaccurate or leads one to the wrong conclusions... the results are worse than wasting $149.
http://www.esplanner.com/
Now for the question: Does anyone have experience with this tool or any other advanced tools for planning/projecting consumption in retirement?
One of the keys to planning for retirement is planning the spending pattern. Most of you are aware of that fact.
Now that I am planning for consumption of our assets. I am finding that it is a bit more difficult than I expected. We could take a very conservative approach and overly limit spending during retirement... but we saved it to spend it. (I am not referring to frivolous waste). Understanding spending is the key to understanding how much is needed for retirement, when one can retire, how much can be spent in retirement without exhausting one's assets, etc... And I am finding that it is not a trivial exercise!
Most planning tools I have used are very weak on planning consumption (expenses). Sure, many of them will allow someone to type in many categories, and apply a basic inflation factor... but that is about all they do. And they certainly do not accomodate the variability/probability for different economic/life scenarios.
At the end of the day, no one can completely predict/understand the future. Therefore we all will need to rely on making common sense adjustments based on the situations that arise. Probably the best that can be planned for is a range of expenditures at different phases (life stages probably tied to health and age) of retirement.
Apparently this is a gap that is being recognized by financial planners. I suspect that there will be a plethora of planning tools to hit the market soon that will help. They will probably employ techniques that are used commonly in actuarial sciences and economics.
The only tool that I have seen so far that claims to treat spending in this complex way is the ESPlanner. It is $149. It seems a small cost (investment/risk) when considering what is at stake (my retirement portfolio). Of course, if it is inaccurate or leads one to the wrong conclusions... the results are worse than wasting $149.
http://www.esplanner.com/
Now for the question: Does anyone have experience with this tool or any other advanced tools for planning/projecting consumption in retirement?