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Our Retirement Expenses: Where Does the Money Go?

What will it cost you to live in retirement? You may be asking this question as you plan your future. You could try to answer it by looking at national statistics on living expenses. The Consumer Expenditure Survey from the Bureau of Labor Statistics, is widely cited. But truly, you are the only one with …

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What Will You Do When You’re Retired?

“If all the year were playing holidays, To sport would be as tedious as to work.” –Shakespeare Mention “retirement” at the office. Most people will be conjuring visions of sun-drenched beaches, lush golf courses, soaring mountains, or shimmering pool sides. Everybody knows that retirement has to be awesome, because vacations are awesome, and retirement will …

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Review: The Pralana Retirement Calculator

The reviews of free retirement calculators here have been some of the most popular posts on the site. There are certainly some useful free calculators available. And since no one calculator has a corner on predicting the future, it’s nice to have the option to run several and compare the results, without having to pay …

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Shopping Obamacare: Good Deal for Retirees?

Open enrollment under the new health care law closed for 2014 at the end of March. There won’t be another opportunity to apply for coverage until late in the year. There is nothing like a deadline to move someone to action. So, even though we are fortunate to have excellent retiree health benefits already, I …

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My Retirement Fears

Reading my story on this blog, you might think I’ve got it made. Thanks to a high-paying job and relatively frugal lifestyle, I managed to save a large sum by the time I was 50, and retire early. Since then I’ve pursued new interests, travelled extensively, and worked when and where I wanted. Recently, we …

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Should You Pay for a Retirement Calculator?

There are lots of retirement calculators. Naturally, people want to know which ones to use and trust. The reviews I’ve written of free retirement calculators have been some of the most popular posts on this site. There aren’t too many side-by-side comparisons of retirement calculators using realistic scenarios, so those posts generated a lot of …

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Early vs. Traditional Retirement

“Retirement” is a slippery concept. Yes, that R-word is commonly used, and that’s why I chose it for this blog. But it can describe radically different situations: a 20-something Internet tycoon; an extremely frugal 30-something software engineer; a 40-something ex-military officer on a pension; a 50-something who achieved financial independence with prudent investing; or a …

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The Ideal Retirement Location

What is your ideal retirement location? Do you dream of beaches or of mountains? Of your home state, or exotic international locales? Of urban skylines or of rural landscapes? Do you like snowy winters, hot dry summers, or moderate temperatures year round? Will you pack up and retire far away from where you worked a …

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The “Perfect” Retirement Calculator

The perfect retirement calculator doesn’t exist yet. But having just finished reviewing dozens of calculators in recent posts — The 3 Best Free Retirement Calculators and The Best Free Retirement Calculators: Round 2 — I can’t stop thinking about the possibilities…. For me, the perfect calculator isn’t one that is somehow more accurate at analyzing …

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The 3 Unknowns that Dominate Your Retirement Calculation

Retirement calculators are supposed to make retirement-related decisions easier, showing you how much you need to save, or how much you might be able to spend once you reach your retirement goal. But as soon as you open up one of these calculators you are plunged into a confusing world of interrelated and surprisingly arcane …

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The Best Free Retirement Calculators: Round 2

Last month’s post on the best free retirement calculators had the most comments ever on this blog. There were many good technical questions, a number of helpful suggestions, and even a bit of controversy. People are clearly fascinated by this topic. And for good reason. Retirement calculators are fundamental to retirement planning, playing a key …

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The 3 Best Free Retirement Calculators

Retirement calculators have an impossible job. They use various imperfect mathematical techniques in an attempt to predict the distant future. That can’t be done reliably. So they will inevitably be “wrong.” Add to that the difficulties in communicating the many variables involved, and all the possible simulation options, to everyday users with limited time. And …

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“Working” in Retirement

Working and retirement would seem to be contradictory terms, but today’s retirees, especially early retirees, know that isn’t so. CNN Money reports that “70% to 80% of preretirees plan to include part-time or some other type of work in their retirement routine.” Modern “retirement” is more about having the financial freedom to do the meaningful …

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How Much is Your Social Security Worth?

Despite its nearly 80-year history, and its status as one of the two largest government programs in the world (the other is Medicare), Social Security remains an enigma to many of us. Some say it’s going bankrupt and you shouldn’t count on receiving anything. Others believe they can count on Social Security and other government …

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Don’t Miss These 6 Investing and Retirement Blogs if You’re Serious about Financial Independence

Blogs are a uniquely modern communication medium. And when you marry the blog format to a weighty topic like personal finance, you get something even more singular — an offbeat mix of financial theory leavened by personal experience, liberated from stuffy corporate guidelines, uniquely authentic, and free from the usual conflicts of interest. As I …

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How Do You Know if You’re Running Out of Money in Retirement?

Conventional financial planning feeds off the mathematics of accumulation portfolios, where you’re still saving for retirement. We’ve all heard about the magic of compound interest, dollar cost averaging, and stocks for the long run…. But the math behind distribution portfolios, where you actually need to live off your money, is shockingly different. A distribution portfolio …

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Why Most Retirement Calculators Don’t Work

Most retirement calculators are broken. It’s not that the user interfaces are confusing, or the inputs are rigid and lacking, or that they have bugs — though many share those failings. No, the problems with most retirement calculators are theoretical, and go much deeper…. Let’s start with some simple division. Say you’re retiring at age …

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Constant Retirement Withdrawals: Realistic or Not?

"A foolish consistency is the hobgoblin of little minds…"  —Ralph Waldo Emerson There is a fatal flaw in most simple retirement models and rules of thumb. For example, the famous "4% rule," which states that you can withdraw 4% from a diversified portfolio, adjusted for inflation every year, and expect it to last for a …

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Three Wildcards for Boomer Retirement

The first wave of the post-war baby boom generation reached age 65 last year, and finally started coming to grips with retirement realities. These are the same realities that anybody contemplating retirement in the foreseeable future must face. Unfortunately the news is not particularly cheery. At best, modern retirement will be challenging. At worst, for …

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A Guide to Retirement Health Care – How Will YOU Get It?

Health care is the single biggest obstacle to retirement for many Americans. My ongoing Reader Survey indicates that health care is also the most common concern for readers of this blog — trumping even running out of money, Social Security, the stock market, inflation, and taxes! Stories of individuals trapped in jobs because of their, …

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Understanding the Two Sides of the Retirement Equation

It’s enough to make even a number-happy engineer dizzy: savings, expenses, interest rates, investment returns, inflation rates, tax rates, safe withdrawal rates…. I pity the prospective retiree who doesn’t like math! What are we talking about? The retirement equation: the essential relationships, now and in the future, between all the variables that determine how long …

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