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Subject:  Re: Financial Planner Advice (long) Date:  10/23/2003  8:52 PM
Author:  8128 Number:  37564 of 78168

From a 66 year old retiree I give you this free advice that may be worth no more than it is costing you. Stay out of credit card debt. Save as much as you can in tax sheltered accounts and if you max them out don't hesitate to open a regular brokerage account. Stay away from most if not all managed mutual funds. Invest in broad market indices or in low, low, fee index funds of the broad market. Ignore bonds and international investments and keep essentially no cash in your "retirement" accounts. The emergency fund is fine but I would view it somewhat differently from your "retirement" funds. As a rough rule of thumb consider that your nest egg at retirement likely will provide you annually about 4 percent of its value at retirement with the initial dollar amount increasing annually with inflation for essentially an indefinite period, i.e., as long as you live in retirement. If you use it faster than this, you increase your chances of outliving your nest egg, not a good thing. Seen this way it probably looks just about impossible to save enough from your vantage point. However, don't overlook the magic of compound interest.

As to how much you will ultimately need, no one can tell at this point given your age and the unknowns like what will happen to social security, any other retirement income you my have, etc. Just observe that you have never heard a retiree complain that they wished that they had not saved so much during their working years. You can hardly go wrong saving as much as you reasonably can. And if by chance you do save more than you need, you can either retire early or, if in a pinch, have to suffer through find