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Subject:  Re: Making a Graduate Annuity Date:  4/28/2013  2:59 PM
Author:  BruceCM Number:  72120 of 81030

A good effort at calculating your retirement savings need.

I agree with you that the numbers tossed around by the investment/insurance industries that the media just loves to pick up and toss around some more, can seem to be excessive to many. But these 'averages' can be misleading, as it really depends on what household income you'll require during your retirement years, which in term will depend on life expectancy, average annual market returns and so on.

Having taught this subject at our local university based CFP course for the past 9 years, let me offer this 2 step approach to determine how much you'll need in your retirement savings accounts when you hit the magical first year of not having to get up and go in to work.

First, as you've done, one needs to make reasonable assumptions. Remember, we are dealing with an uncertain future, and the best we can do in planning for it is to start with assumptions that we feel are the 'best fit' or 'most likely' for our future:

- Average annual inflation rate and average annual wage inflation. Most planning calculations will only use one to represent both, although wage inflation is usually about 50 to 80 bp higher.

- Average a