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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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How to Retire Early

Here are some of the core principles that can help you become financially successful, and retire sooner too. This list comes from the article How I Retired Early, written shortly after I retired, explaining how I became financially independent. That original article is pretty long, so here are just the action items…. I found that …

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How Can You Be Certain About the Retirement Decision?

You’ve worked a long career — several decades, possibly more. You’ve saved diligently, paid off the house, put the kids through college. Your investments have recovered from the latest downturn, and the world seems relatively sane again, for now. You’ve amassed more assets than you dreamed possible when you were younger, and yet you hesitate. …

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Your Retirement Roadmap

This blog is a useful format for a range of topics related to saving, investing, and retiring. But I’ve also been asked for a more structured approach to retirement. So, after a lot of writing and organizing — and quite a bit of living, in order to learn the lessons described — I’m pleased to …

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How Much Will it Cost You to Live in Retirement?

Without a deep understanding of what it costs you to live, any discussion of retirement savings or income is pointless. Despite the oft-repeated advice that you will spend some standard percent (perhaps 60% on the low end to 100% or more on the high end) of your pre-retirement income in retirement, what it costs you …

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Most Financial Plans are Dubious Attempts to Predict the Future

“In preparing for battle I have always found that plans are useless, but planning is indispensable.” —General Dwight D. Eisenhower Many flavors of financial, investment, or retirement planning boil down to attempts to predict the future based on the past. Smart people and resourceful organizations develop clever models which give them confidence to market themselves …

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What Do We Mean by “Retirement”?

The idea of retirement is an invention of the last 75 years. Before then, people had no expectation of “retirement” in the modern sense. It’s worth analyzing this concept a little closer, before we arrive there, to make sure it’s a place we want to go. What is the purpose and meaning of “retirement” to …

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Can You Count on Social Security?

It’s trendy in some circles to discount Social Security completely. But when you look at the facts for those nearing retirement now, that just isn’t realistic. Social Security will be a key part of retirement for most of us. Social Security is in genuine trouble: According to a recent Social Security Statement of mine, “the …

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