When we are young dying too soon is the greater risk. Eventually, it turns around and living too long becomes an issue.
Thinking about the factors.
It’s simple. You will take a series of small monthly amounts and invest them until you have a large accumulation. Then you will take the large accumulation of investments and change them back into small monthly amounts. Everything else is detail, guesses, assumptions, and how you adjust.
What you want to know is how much should I save this month.
You cannot do it intuitively because the formulae used are too complicated for mental arithmetic.
The answer you get for the big accumulation is an estimate. It completely depends on your assumptions and how they interact with each other.
Lifestyle spending is real. It is goods and services based. Cash flow to support it is quite a different thing. The part you must supply for yourself depends on:
What you want is a way to put the problem in perspective. Worst case, best case and the middle of the range. Once you have a spreadsheet to work with, you can change variables and get a feel for what can happen.
When you have a sense of the problem, you can adapt productively. Adaptation is essential. Faced with a choice you can decide. Suppose at 50, you notice your planned cost of living is either 5% too high or your required monthly saving from now to age 65 is 7% too low. You can decide how to proceed.
Maybe, but not as much as you think.
People adjust when they must. But the effect of change over long periods is not as serious as you think. Here’s why:
Retirement income planning and building the capital to support it becomes organized common sense. The arithmetic is tricky though.
Starting sooner is a huge advantage.
I help people have more retirement income and larger, more liquid estates.
Call in Canada 705-927-4770, or email firstname.lastname@example.org