Retirement Planning: Looking for that Moment

So How Much is Retirement Going to Cost?
Attempting to predict what your future needs in retirement will be is as easy as looking at your current spending and debts. How much of those bills will you be carrying into those golden years?

If you look at your retirement plan as a risky undertaking, something you can orchestrate to be in the right place at the right time - or better, diversified enough that no one place hurts the whole of your investment plan - then you will find yourself looking to stocks as a greater portion of your portfolio.

If you still want to add a conservative element to your plan, I suggest that any new investment contribution should be directed towards that, a move preferable to diverting funds away from another investment. The key isn't increased risk, it is maintaining levels of risk that allow portfolio growth and it is increased contributions.

More on this article from Paul Petillo, Managing Editor, BlueCollarDollar.com can be found here

H is for Honesty - Retirement Planning

We all want honesty, except when it comes to our finances. We desperately want to be told what we want to hear about our retirement plans rather than what we need to hear. And the honesty we look for - or better yet, the lies we would like to be told are as follows:

1. We will have enough money to retire.
I would love to believe that you or any one has this calculated correctly. It seems that each day the free market has the opportunity to do what it does best, the number we have assumed is best case scenario, needs to be recalculated.

2. We will be able to get debt free.
Debt free is a nice goal but debt management is a more honest approach to what your future holds. We use credit at the pumps, in restaurants or any time - and this is just good advice - we lose sight of our credit cards during a purchase. So each month, we need to manage that debt.

3. We will be able to estimate the cost of insurance.
Most of can't do that now. Do you assume that it will be easier on a fixed income? think again. Fidelity suggests that a nest egg of just over a million dollars might be enough to cover your future health insurance costs.

4. Our kids and in some case, our parents will not have an effect on our retirement plans.
If you believe this to be true, you never had kids and/or your parents have since been deceased. otherwise, these two groups will cost you more than you think. A recent New York Times article suggested that inheritances that may have been expected by many near-to-retirement adults can no longer be assumed. For those of us with parents who have no inheritance to spend down, you may be the only salvation for their financial well-being. And your kids...

5. Your investments are not as honest as you once assumed they were.
Look at oil. Look at the stock market. Look at bonds. Look at your tax bill. Need I say more?

Being financially honest with yourself is step one in considering how far you need to go to get to some semblance of retirement.

A is for Asset Allocation

B is for Balance

C is for Continuity

D is for Diversity

E is for (Tracking) Errors

F is for Free-Float

G is for Gross Income

Retirement Planning and Life Expectancy

No retirement planning book would be complete without a look at life expectancy. Trying to determine how long you might live, whether you will outlive your money and exactly how much money will be needed should you break all-time length of life records affects every plan.

In the book, I point to the work done by Wharton School of Business professors Dean P Foster, whose field is statistics and Lyle Unger, an expert in Genomics and computational biology. Their work on longevity based on how much walking one does was expanded into a full fledged calculator with the addition of Chua Choon Tze, who brought his finance background from the Lee Kong Chian School in Singapore.

The calculator was expanded to include numerous diseases and charts that will narrow your possibilities by ranking you among your peer group.

Included are references to fitness using a maximal treadmill exercise test as a measure of fitness with an initial speed set at 3.3mph, 0% grade for 1st minute, 2% grade for 2nd minute, an increase of 1% for each subsequent minute until 25 minutes thereafter, the speed is increased by 0.2mph each minute until test is terminated

To do this of course, you would need to compare what you think the maximum amount of time that you can stay on the treadmill with mean time for men of 16 minutes 52 seconds and a mean time for women of 11 minutes 28 seconds.

They also asked the user to judge their diet (Dairy, Meat, Grain, Fruit, Vegetable) and their stress level. The following list would have a negative effect on your overall life span:

• Serious Illness in a family member (excluding death)
  
  
• Serious concern about a family member (excluding illness)
  
  
• Death of a family member
  
  
• Divorce or separation
  
  
• Forced to move house
  
  
• Forced to change job
  
  
• Been made redundant
  
  
• Feelings of insecurity at work
  
  
• Serious financial trouble
  
  
• Been legally prosecuted

More fun can be had at NW Mutual's longevity game. As you input the information, your body changes shape and often not for the better. Starting out at the average life expectancy of 74, each question prompts an increase or a decrease in that anticipated age.

There is much more to creating enough wealth to weather a long lifetime. And these calculators and games only hope to illustrate the changes you can make to achieve a longer healthier life. My job is to help you get the money you need.