I like to get to places early, I arrive at the airport really early, I check and recheck, I try to anticipate every possibility and have a plan to deal with every contingency I can think of … In other words, what if?
Sometimes my long-term strategies and my frugal planning get me into trouble … With my wife. I don’t spend money using a credit card unless I know in advance where the money is coming from to pay the bill and that it will be paid before the due date. I won’t buy something today if I think we may need the money for something else in the future. I have accounts for each major aspect of my life; bills, emergencies, travel, long-term investments and really long-term planning and never the twain (or more) shall meet. So, if I want to buy something and I don’t have the money in the everyday bill account, but I do have more than enough in the travel or emergency account, I don’t have the money and I don’t buy until I do. Weird uh? Or as my wife says, I’m just saving the money for my second wife. In reality it’s more like I’m saving the money so my wife doesn’t need a second husband.
All this planning stuff is exhausting and time-consuming and sometimes you get called names, but guess what? You sleep better at night, you really don’t argue as much and besides what else do you have to do?
My financial plan was always geared to age 95, but as I rapidly approach 70, I think I’ll up it to 100, just for luck … and that big what if? I used to think 70 was old, now I view it as middle age.
Some will argue you should live for today because tomorrow may never come. Others say why deny yourself what you want only because of what you may need in the future. In one way or the other the future always does come and what you (or your family) may need you will need.
Take a look at the info below and read the full article. It’s quite good.
Sometimes I am accused of being too much of a planner, and maybe I should plead guilty.
But if you don’t plan well, how can you know you’ll get where you want or need to go? When we talk about taking money out of your retirement portfolio, this becomes a very important question.
I know people who retire believing that they have enough money to get along just fine — and who then start spending whatever it takes to get what they want or what they think they need. No grand plan, just expedient spending. It’s a nice way to live if you can afford it, but how can you know that?
The biggest risk that retirees face is running out of money before they run out of life. Most of us can’t know how long we’ll live. But it’s possible (and prudent) to organize our finances so that it’s unlikely we will run out of money even if we live to age 100 or beyond.
There’s a simple way to do that, and I’ve helped thousands of investors deal with this question.
To apply this simple method, you need to know three things.
What is your annual cost of living in your first year of retirement?
How much income can you count on aside from your investment portfolio? This includes Social Security, pensions, annuities and perhaps rental income.
What is your retirement portfolio worth on the first day of your retirement?
Let’s look at a simplified example of how these numbers go together.
By Paul Merriman