Wednesday, July 12, 2006

Lack of realism in retirement planning

There was  a short article by Paul Magnusson on page 22 of the July-August 2006 issue of the AARP Bulletin entitled "Color Me Confident - Why many Americans may be working when they retire". I thought my own retirement planning was in sad shape, but so many Americans are in far worse shape than me. As the article subtitle suggests, many people will have little choice but to continue working well past their normal retirement age. Even worse, a lot of these people simply don't know how bad off they really are.

This article, and another by Jane Bryant Quinn, convinced me that I need to take an even more conservative view than I already have. I need to more carefully think through my assumptions about rates of return, both before and during retirement, and also adjust them and the principle of my nestegg by relatistic expectations of inflation. 

-- Jack Krupansky


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