How to Model the Retirement Income Gap

The textbook, or fairy tale, version of retirement goes something like this: you work your entire career, until you save your retirement "number," or reach the pension or Social Security age around 65 (later for many boomers). Then, your … [Continue reading]

Luxury or Essential?

It's safe to say that most of us in line to become financially independent or retire early do not lead lives of luxury. For example, I shave with bar soap, buy socks at Walmart, don’t pay for cable, and still don't own a Smartphone. I’m just a … [Continue reading]

8 Tips for Saving Big and Retiring Earlier

A key aspect of financial independence and retiring early is controlling your expenses. While developing your career to earn more gives you powerful leverage over the retirement equation, saving more is a simple strategy that you can apply every day. … [Continue reading]

My First Dip Into Principal: Market Timing or Cash Management?

This isn't one of those full-disclosure "reality" blogs where I document every lurid detail of our financial life. I'm a pretty private person by nature and it's been a long, drawn out process just for me to talk about our finances as much … [Continue reading]

The Optimal Mix: How Much Annuity Do You Need?

Lately I've been writing about the case for annuities and my gradual acceptance of their likely role in my own retirement. (See Why an Annuity Could Be in Your Future and A Floor with an Upside: The Best Strategy for Lifetime Income?) Unless you … [Continue reading]

Blueprint: Retirement Income

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What I Learned from the World’s Best Personal Finance Bloggers

I've just returned from Denver and FinCon12, the annual financial blogger conference. Here's a little of what I learned about money, business, and life from some of the best personal finance bloggers on the planet…. J.D. Roth, founder of Get Rich … [Continue reading]

3 Sure and Simple Indicators for Stock Market Success

Up until the mid-1980's, canaries were used as an early warning system in coal mines. The birds' high metabolism and rapid breathing rate, on top of their small size, meant they would concentrate atmospheric toxins in their bodies quickly. Deadly … [Continue reading]

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 … [Continue reading]

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 … [Continue reading]

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 … [Continue reading]

Choosing a Compact RV or Camper for Retirement Travel

An article I posted a while back about our solution for cheap retirement travel — a small RV — continues to receive a lot of traffic.... Nearly 10% of U.S. households own an RV of some sort, and the number is rising. Of households … [Continue reading]

A Floor with an Upside: The Best Strategy for Lifetime Income?

Could you live off your investment portfolio indefinitely, if you had too? The answer to that question lies in the relationship among your total assets, your living expenses, your investing skill, the length of your retirement, market valuations when … [Continue reading]

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 … [Continue reading]

Why an Annuity Could Be in Your Future…

If you're like many independent-minded boomers who cut their teeth on the market conditions of the 1990’s, you may harbor serious suspicions about annuity products. Who needs an annuity? With the stock market averaging near double-digit returns in … [Continue reading]

Larceny and Road Kill: Self-Insuring Revisited

It's only human to form opinions based on experience. But reality often conspires to modify our views. When things don't go as expected, I find it's best to study what went wrong, refine your thinking, and keep moving ahead. I recently re-learned … [Continue reading]

Blueprint: Asset Allocation

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New Ideas for Retirement Income

How to save for and then generate enough retirement income is a central theme here. It turns out that the tools used to accumulate sufficient assets to retire — portfolio diversification according to Modern Portfolio Theory — are probably … [Continue reading]

Blueprint: Paying for College

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What is Your Personal Rate of Inflation?

Inflation is often seen as the termite of the financial world. Gnawing away at your assets over long periods of time, it's an insidious threat. Hard to detect over short time frames, it can seriously damage your assets over the long term, robbing … [Continue reading]

Blueprint: Retirement Health Care

Special Note (2014): The diagram below has been dated by the implementation of the Affordable Care Act (Obamacare). Until I'm able to update it, please do not consider it an accurate guide to the current state of retirement health care. … [Continue reading]