May 1, 2014
Retirement planning is – as you know – a process over many years of planning, saving and soundly investing. While, for the young investor, thinking about how much money you’ll have to live on after you retire seems a long way off, as you near retirement it is an essential ingredient in your planning. No matter what age you are, if you haven’t yet begun, NOW is always the best time to begin planning for your future.
Over the past few weeks I have made available articles, podcasts, and tables to assist you in determining your retirement distribution strategy, using fixed or viable distributions. How much you need to retire, and how much you have to retire with, is dictated by how much you have saved and its invested value. Spending time with the tablesoffers a good focus of discussion for a couple thinking how they will extract their money.
When you’re paying yourself, it’s different than when someone else is paying you. When you work for someone else, you may negotiate your pay but, usually, you have little control. Your spouse or partner has no control or say in the matter. However, when it comes to retirement distributions, the decision involves both people, and requires the commitment of both. These decisions may be the first time a couple has to set – and live within – their own pay scale.
I’ve read that 30% of retirees are taking out 7% or more a year from their retirement. Unless they plan to have a short life ahead, they will likely be in trouble. I encourage you to not put off the consideration of how much you need and can afford to live on in retirement, and to use this information to make the best decisions for your future.
While you may think that these Distribution Tables – shown over a 44 year period – have little to do with you, a fun exercise is to look at several 20-year periods, e.g. 1970-1989, or 1990-2009 and consider different ways you might have ended up. Let me assure you, it does apply to you.
Speaking of Retirement, my wife and I passed another wonderful winter at our home in central Mexico. Back in December, I published an article in MarketWatch about San Miguel de Allende. The article had over 43,000 opens, indicating there is a lot of interest in this marvelous little city.
Another couple said they too had attended a wonderful string concert by the Catalyst Quartet, which has played at Kennedy Center in Washington D,C. and New York’s Carnegie Hall. Another couple was thrilled with a free public concert of Cuban music and dance in the Jardin, or main plaza, as part of the annual week-long Cuban Festival.
There is so much going on in this amazing city. Before we left to return to the Seattle area for summer, I finished a 4-class series on Clarence Darrow, taught by a retired law professor at Instituto Allende’s Lifelong Learning Program.
Next February, I hope to teach a 12-hour course (four 2-hour classes) on “Financial Fitness After 50.” I hope you will join me. The classes will be in the afternoon, when you’re supposed to be out of the sun anyway.
To Your Success,