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One Retirement Number You Can’t Afford to Get Wrong

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I’ve long promoted using free retirement calculators, easily available on the web, to get a better handle on your retirement trajectory. These tools give you a sense for how much you need to save to retire, providing much-needed perspective and motivation.

I’ve also advocated for ignoring the hideously complex U.S. tax code whenever possible in your planning. Sometimes you can boil that tax code down to a simple “effective” tax rate. Further detail would just be intimidating and distracting for many prospective retirees early in the process. For example, I’ve shown that our taxes in early retirement are a relatively small expense, far less than we spend on either housing, health care, groceries, or recreation.

But, when it comes time for the major financial decisions, like leaving a career, or choosing an investment strategy in retirement, you can’t afford to ignore taxes. You need to get those details right, if you want a realistic picture of your financial status. Without accurate projections of your tax obligations, you run the risk of making serious financial mistakes with your retirement assets. Guessing at your retirement taxes using simplistic effective tax rates just isn’t good enough….

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Book Excerpt: Do You Need a Financial Advisor?

Businessmen talking on homemade can phone

Finally, I can talk about my second book, titled "Can I Retire Yet?" More than three years in the making, the text is in final draft. I expect it to be available on Amazon by early summer. Subtitled "How to Make the Biggest Financial Decision … [Continue reading]

My Retirement Income Taxes: 2016

Form 1040 with pen and glasses

On April Fool's Day I completed and filed my returns for the 2015 tax year. Normally I’m proactive about financial matters. But, for taxes, I wait until a few weeks before the mid-April deadline. That reduces the chances that a late-breaking 1099 … [Continue reading]

Dealing with Uncertainty in Retirement Calculations

Question mark on sticky notes

Remember the game of Telephone? Players whisper a secret message down the line from one to the next. When the message reaches the end of the line, it's repeated aloud to the group. And, without fail, it's been mangled beyond … [Continue reading]

The Best Retirement Withdrawal Strategies: Digging Deeper

gardening tools

A couple of months ago I published new research here. The topic was retirement withdrawal strategies. I was trying to answer a question that had long puzzled me. It's one that I hadn't seen addressed elsewhere: What is the best way to liquidate the … [Continue reading]

Retirement Health Care: What Are Your Options?

Stethoscope on laptop computer keyboard

For years, health insurance in the U.S. was a major roadblock to early retirement. If you dared to leave work before age 65, when Medicare starts, you were on your own for retirement health care. In my case, our assets were closing in on financial … [Continue reading]

My Favorite Retirement Calculators

Calculator on red heart

I've used many retirement calculators. More than 80 at last count. I relied on these tools to plan my own retirement trajectory, culminating in early retirement at age 50. Then I started a blog and began reviewing retirement calculators. Over time, … [Continue reading]

The Next Bear Market: How Bad Could It Get?

Grizzly bear

In November of 1972 the Dow Jones Industrial Average closed at a little above 1,000 points. Then it went down, and stayed mostly down, for the next ten years. While the Dow sat still, life went on.... The first U.S. space station and shuttle … [Continue reading]

My Investment Portfolio: 2016

stock certificates

It was another dull year for my investment portfolio. Until last week. In all of 2015, I made a single investing move. Then came the first week of 2016: Questions swirled around highly respected financial firms. I did some long-overdue portfolio … [Continue reading]

New Research: The Best Retirement Withdrawal Strategies

Horse race

Many retirees will use systematic withdrawals from an investment portfolio for retirement income. I've done new research into the best retirement withdrawal strategies. History shows that your success can vary widely using the same portfolio and the … [Continue reading]

Retirement Gifts: My Favorite Toys…

red tricycle

This blog is usually about serious financial topics -- saving, investing, retiring, real estate, health care, insurance. So it's time for me to lighten up! Given the season, I thought I'd review some favorite "toys" from my early retirement years. … [Continue reading]

Comparing the 2 Leading Social Security Calculators

Orange and apple

It was a mystery. I'd spent the morning sifting through results from the two leading Social Security calculators. I was running my eye down the column of numbers generated by the 2nd well-respected calculator. They summed to more than $700K in … [Continue reading]

New Social Security Rules: Do You Need a Calculator?

Calculator and question mark

The only constant is change. Do a little retirement planning, and you'll soon bump into that truth. Earlier this month the U.S. government gave us another reminder: The Bipartisan Budget Act of 2015 made some of the most significant changes to Social … [Continue reading]

Are You Feeling Lucky? The Two Schools of Retirement Income…

Golden dice

Are you feeling lucky? That's how the debate between the two schools of retirement income often shapes up. Do you keep your retirement assets in the stock market, where you'll have more flexibility and better odds for long-term financial … [Continue reading]

A Short Course in Investing

Empty chalkboard and supplies

You can commit a large chunk of your life to becoming a better investor, if you want. You can read articles, devour books, and enroll in classes. Some people, myself included, will take that full plunge. But in the end, most experienced investors … [Continue reading]

Running Low in Retirement: Income Strategies

Gas pump pumping gold dollars

Running out of money before you run out of life. It's the biggest fear many retirees face. And, for baby boomers and succeeding generations without guaranteed pensions, it's not just a night terror -- it's a realistic concern. Without adequate … [Continue reading]

Running Low in Retirement: Expense Strategies

Fuel pump nozzle

What can you do if you're running out of money in retirement? Even those fortunate enough to have a comfortable nest egg could find themselves feeling financially squeezed at some point. If that happens, what should you do? At the simplest … [Continue reading]

What to Do When the Market Tanks

Downward arrow

It was a Monday morning in the fall of 1987. I was young software engineer immersed in a technical project. The older guys in the office were talking about a crash in the stock market. It would become known as "Black Monday" -- the largest one-day … [Continue reading]

Traveling in a Small RV

Glacier

Travel is a key part of retirement for many. And traveling in a small RV can be a fun, flexible, and economical solution. Our Class B camper van has been fundamental to our retirement lifestyle. We’ve spent hundreds of nights in it, and can’t imagine … [Continue reading]

Summer Vacation: Retirement Towns, Adversity and Longevity

Bristlecone

Though I no longer work a regular job, it still feels like a vacation when I break from the usual routine. And, for the past four weeks, we've enjoyed a major break from our regular routine. In late July, we left Santa Fe for an extended road trip to … [Continue reading]

Is Early Retirement Irresponsible?

Hang gliding into sunset

Retirement is an invention of the last half century. Thanks to social welfare programs and longer life spans, more people could look forward to life after a career. But now it's possible for some dedicated and fortunate workers to put together the … [Continue reading]