What Not To Do In Retirement Planning
Forbes recently ran an article by Scott Reeves called What Not To Do In Retirement Planning. Here are some highlights:
Consider the basics when drafting a retirement plan–housing, transportation, routine living expenses and health care–but there are so many variables that putting together a plan cookbook-style is almost certain to create future financial problems.
“Retirement planning is highly personal,” says Joseph Weiss, an actuarial adviser for Ernst & Young in Hartford, Conn. “There aren’t many rules of thumb.”
On making trade-offs:
It’s also possible to make unplanned trade-offs during retirement to hold on to what’s important. For example, if you planned to live on caviar and champagne in retirement, you can easily cut back to hamburgers and beer, if that means holding on to the vacation home.
Remember that you can’t plan precisely for a potentially catastrophic medical problem, which may change everything. Health care is the wild card, and planning based on current expenses may not cover future costs.
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