There are some important numbers that anyone seriously interested in planning for retirement should give some thought to. Here is my take "on your numbers" and what you should be thinking about.


Nest Egg...How much do you have in retirement assets?  Too many folks reach FRA (Full Retirement Age) with almost nothing saved for retirement. One tip here is that a modest nest egg goes a long way in establishing a secure retirement. (You don't need millions to retire or feel financially secure).


Expected Rate of Return...  What do you expect to earn on your investments and savings?  Consider a separate expected rate - one for investment accounts and one for insured bank or credit union accounts.


Inflation Rate...  The CPI (Consumer Price Index) may provide a guide here...consider using something in the 2-3% range for your expenses. Use a lower rate for expected increases in social security benefits. (The government has declared war on entitlements and like it or not, they consider social security and medicare their largest entitlement liability and they are giving increases of zero or .3%, far below the inflation rate).


Expense Ratio....  For money you have invested in mutual funds, brokerage accounts, or variable annuities, become familiar with the expense burden each account places on your money. Hint: the lower the expense load, the more money potentially available for you. In a low return environment, do you really want to be paying 2% in annual fees? If the return is 5%, the manager keeps 2% or 40% of your total return. 


Monthly Budget... Knowing how much money you need on a monthly basis after taxes and investment expenses will make planning possible and set your mind at ease if your projections show that you can easily manage the required budget. On the contrary, if your budget and the related projections of income look dismal, you can come up with a strategy to bridge the gap.



Todd's Tax Service LLC

What is your number?