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Subject:  Retirement Plan Advice - Blueprint Date:  10/28/2009  4:58 PM
Author:  lsaunders Number:  151 of 178

A family member is asking for a "Blueprint" to prepare for retirement in terms of a guide to create their plan. Here is what I've put together --- what have I missed? Any insights for this Blueprint? Or is there a similar document already in existence on TMF I can refer them to?

1. Determine your monthly expenditures. Track this across a year to create an annual (with monthly breakdowns) budget.

2. Pay down your debt concertedly. Plan on retiring with your residence paid off and no other debt preferably.

3. Using a maximum 4% annual withdrawal rate, calculate the draw down you can expect from your fixed/equity investments. This would be added to any other revenue streams you're expecting (ie. pensions, rent from properties, SS, inheritance) to determine how much income you can expect. There are number of online retirement calculators available to help you with this. One I've used is available on This will help you determine how much money you'll need to accumulate before pulling that retirement trigger.

4. Plan how you'll be spending that extra time you'll have on your hands - hobbies, sports, volunteer work etc. Include any expensive hobby/sport/travel items into your annual budget calculations.

5. Live below your means, save, invest diligently and keep your eye on that retirement number you need before joining the happy FIRE crowd.

6. Healthcare is a big (and growing cost) for retirees. Make sure you research what your costs are likely to be and include that into your annual budget, if you won't be covered under a retirement pension plan.

7. Another item to watch is your tax deferred accounts. I'm no expert here, but you should research at what age you need to start taking withdrawals. I believe it's 59 1/2, but I could be wrong on that. There can be stiff penalties.

8. Be very careful if you are heavily relying on SS. There is a lot of debate as to whether it will be in existence down the road. The same could be said for pensions, depending upon the company's health.

Is this too simple?
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