Business Marketing Magazine Summer 2017 January 2016 Creating Clear Businesses | Page 23

How to figure out how much you need for re- cast in stone by any means.
tirement
Budget and retirement budget: A full budget
cannot be completely shown here due to the
No matter what publications or surveys, in- limited space. So here’s what you should do
variably they state that the majority of up- now. Until February 1, 2016, go to EFMoody.
coming retirees do not know how much com and scroll down and you will see two
money they will need at retirement. Well, I video links: Budget one and Budget two. I did
have taught this for a long time and decided these a while ago but both are valid. They are
to show you how it is done by hand. Yes, you free. If you do not spend some time viewing
can use software programs on the web and these and implementing the basics, your rethey might help. I say ‘might’ since one has to tirement is screwed. (Click on the Daily Comknow what numbers to put in and why- and mentary to get an idea of what goes into my
also what the software is doing with them- thought process on a host of issues.)
next to impossible. You will find answerseven from major services like Vanguard, The budget is the main item to be revised if
Fidelity, T Rowe Price- to be
there is not enough current
remarkably different. Some of
funds to last your lifetime. It
you may have more convoluted
is possible to adjust the other
issues- vacation homes, rental
areas and while inflation will
real estate, collectibles, busichange with time- I doubt it
nesses, and more. In such caswill get beyond 4%/5% for a
es software programs with exvery long time given the realcel are needed- but you need to
ization by the bulk of world
understand the basics before
economies that letting it go
that is attempted.
to extreme has been shown to
completely destabilize their
So here are the inputs: retireeconomies and lead to major
ment budget, future inflation,
defaults. Your actuarial lifeactuarial lifetime and rate of
time for a healthy person may
return through the future. I will
be reasonably determined
tackle the budget first. It easily is the most and not much you can do here. Obviously if
important. However, as I go over the fun- health fails, the shorter time to live will redamentals month after month, please note quire less of a kitty. The rate of return- don’t
that, while the numbers are developed for plan on what has occurred in the past delifetimes up to 30+ years after age 65, they cades. A 5% total for an allocation (which
are only guesstimates that will change sub- generally contains bond funds) is about as
stantially. I don’t think they will be that valid high as you can get. See article on How to
after 5 years maximum- too much happens. Make a Killing with Bonds in 2016 elsewhere
Deaths, illnesses, children, divorce, parents, this month. These will all be touched on in
just plain bad luck and much more. No mat- more detail in the coming months.
ter how you develop the numbers, they are
really an approximate guide to what the fu- Remember to do your homework.
ture might financially bring. But they are not

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