Skip to main content
No. of Recommendations: 0
A 54 year old friend is looking at a possible job loss. He and his wife have been very frugal (read "cheap") over the years, and have saved and invested a lot. His wife "thinks perhaps" they will be able to not have to worry about looking for another job, at least another full-time "high-powered" job -- but doesn't really know.

So - a calculator in which they could plug in their current assets, the current rate of return (I'm advising them to use no more than 10%...right?), their expected income needs --

and out the other end would come some idea about whether they'll be OK, would need another job, need another part-time job, or whatever.

Am I making sense? Is there such a thing? Thanks...
Print the post Back To Top
No. of Recommendations: 0
AnnW asks,

A 54 year old friend is looking at a possible job loss. He and his wife have been very frugal (read "cheap") over the years, and have saved and invested a lot. His wife "thinks perhaps" they will be able to not have to worry about looking for another job, at least another full-time "high-powered" job -- but doesn't really know.

So - a calculator in which they could plug in their current assets, the current rate of return (I'm advising them to use no more than 10%...right?), their expected income needs --

and out the other end would come some idea about whether they'll be OK, would need another job, need another part-time job, or whatever.

Am I making sense? Is there such a thing? Thanks...


You might try looking at the Retire Early Safe Withdrawal Calculator, see link:

http://www.geocities.com/WallStreet/8257/restud1/html

The short amswer is that if you want your money to be "100% safe" and last for 30 or 40 years while still protecting you from inflation, you must limit your withdrawal to about 4% of assets. That's a $40,000 withdrawal from a $1 million portfolio.

"High-powered" individuals who need $200,000 per year to live on, should have about $5 million.

intercst
Print the post Back To Top
No. of Recommendations: 0
I have found the following site to be helpful in planning for retirement. It has a section on Calculating Your Nest Egg. Occasionally, it won't come up--but then just try the next day. It's the very best I've found. Let me know if you found it helpful. SFM

www.moneyminded.com/security/retir/a7nste15.htm

Print the post Back To Top
No. of Recommendations: 0
The best site I have found is Moneyminded: Calculate Your Nest Egg. Occasionally, it doesn't come up--then just wait and try again the next day. I have found it very helpful.

www/moneyminded.com/security/retir/a7nste15.htm

SFM
Print the post Back To Top
No. of Recommendations: 0
Recently read where people on an average live 18 years in retirement and need 75% of their previous income to meet expenses. Of course, everyone's numbers will vary.
Print the post Back To Top
No. of Recommendations: 0
Just when I think I've got a foolproof plan on [my own] spreadsheet, comments like this knock me down...

In my sheet, I must not calculate 'rate of withdrawal' like the rest of the world...

If I have $100K and take out $10K a year, that's a 10% ROW per conventional thinking [I think]... but, my logic says that that $100K invested at a safe 7% means that it generates $7K while I'm taking the $10K, so ROW is the difference... or 3%...

My sheet, with month-by-month withdrawal and interest accumulations, factored for inflation, shows me that I can manage this...

I do count on a SS at 62, so ROW drops there with income stream static, plus inflation adjustments...

No merrit raises in this deal, but I think it will work.. I have run it by my broker who agrees...

What am I missing?

Thanks for all the help and advice!

Mike
Print the post Back To Top
No. of Recommendations: 0
Mike asks:

<<What am I missing?>>

The fact that an average return is one thing, but actual returns are quite another. Various studies on "safe" withdrawal rates based on historical return show portfolio survivability means only about 4% to 6% may be taken each year to ensure a 95% chance or better that your money lasts as long as you do. See my article "How Much Are Ya Gonna Take?" at http://www.fool.com/retirement/manageretirement/manageretirement7.htm and follow the links in that missive.

Regards..Pixy
Print the post Back To Top