This month, I’ve come across an intriguing and beneficial concept that becomes especially relevant as we age and face the risk of cognitive decline.
Let’s take a deep dive into some of the most effective retirement calculators available and explore why they might offer varying results even with identical inputs. These resources will also shed light on the uncertainties tied to key assumptions that you’ll need to input into these retirement planning tools.
We’ll discuss different approaches to determine your retirement spending capacity and address challenges found in the home and auto insurance sectors. As we wrap up, we’ll explore resources that help define what "enough" truly means and finding joy beyond financial freedom.
Protecting Yourself from Cognitive Decline
Mike Piper offers insights from a CPA’s standpoint on reducing the financial risks associated with cognitive decline. If there’s just one article you read this month, I’d suggest this is it.
Retirement Calculators
Recently, I examined the Pralana Online retirement calculator. Readers have been curious about how it compares to Boldin, both tools we proudly recommend. Pralana’s advantage lies in the detailed modeling capabilities, while Boldin is praised for its user interface and ease of learning. Ultimately, both offer robust financial modeling solutions. The key is selecting a tool you’re comfortable with and mastering it thoroughly.
Rob Berger has put together an insightful video illustrating how these calculators can generate vastly different results from the same inputs, depending on their methods of number crunching.
Assumptions
Beyond the mathematical differences, all calculators rely on certain assumptions, which can lead to errors. As the saying goes, making assumptions can be problematic. Bill Bernstein discusses why he avoids using retirement calculators entirely, while Allan Roth takes a closer look at Vanguard’s projected returns for the next decade.
How Much Can You Spend in Retirement?
Christene Benz takes on the complex topic of balancing Safe Withdrawal Rates with Required Minimum Distributions (RMDs).
Insurance Challenges and Tips
In recent years, I’ve been particularly interested in the challenges facing home and auto insurance markets, largely due to high inflation and an increase in severe weather events. A fascinating discussion on The Journal podcast details State Farm’s policy cuts just before the fires struck. Fellow advisor Maggie Klokkenga shares five strategic steps to reduce your home and auto insurance costs, with the fourth suggestion being especially insightful and underappreciated.
Beyond Dollars and Cents
While money is often at the forefront of personal finance conversations, the personal aspect of retirement planning can be even more challenging. I recently published a guest piece by Kara Johnson, who shared her journey of finding purpose and community post-financial independence. In a similar vein, Jonathan Clements writes about the profound concept of "enough" in his piece "Never Enough." Arthur Brooks contributes to this dialogue with his appearance on the Rich Roll Podcast, discussing happiness as a guiding principle.
Valuable Resources
For those looking to engage in detailed retirement simulations, there are top-tier calculators available that can help model withdrawal strategies, tax implications, healthcare expenses, and more. Monitoring your investment portfolio is also crucial, and a free Empower account can provide insights into your asset allocation, performance, net worth, and more.
Chris Mamula, who successfully retired at 41 inspired by traditional retirement strategies and innovative lifestyle choices, is a wealth of knowledge in financial independence. From poor financial industry experiences, he educated himself and later contributed significantly by writing and advising on financial planning. For inquiries about the blog or financial planning, Chris can be reached at his respective emails.
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