Decisions, Decisions, Decisions

We, here at How Much Can I Afford to Spend in Retirement, advocate the use of basic actuarial and financial economics principles to help our users make better retirement-related financial decisions. We don’t claim to address every possible decision you may need to make before or after you retire. For example, we don’t address the tax ramifications of withdrawals from after-tax vs. pre-tax accounts (or any specific tax strategies for that matter) or how much you should spend on insurance products vs. self-insuring your risks.

Keeping It Simple

In our post of April 5, we encouraged you to develop a strategic plan for retirement that considers your spending goals, your tolerance for risk and your other preferences. We suggested that you could accomplish this task by using our Recommended Financial Planning Process, which we believe is a relatively simple and straightforward process. Of course, what may seem simple to one person may be complicated to another. While our recommended process does involve calculations of present values, our Actuarial Budget Calculator (ABC) workbooks perform these present value calculations for you, thereby significantly simplifying the process in our opinion.

Aligning Your Strategic Plan in Retirement with Your Spending Goals, Tolerance for Risk and Other Preferences

This post is a follow-up to our post of January 31, 2020—How to Develop and Implement a Strategic Plan for Your Retirement. In that post we encouraged our readers to assume responsibility for their own retirement by developing a strategic plan that aligns their spending and investment strategies with their retirement goals. In this post, we will encourage you to also consider your tolerance for risk and other preferences you may have, as recently suggested by two prominent retirement researchers. We will also discuss how you can accomplish this task relatively easily if you are using our Recommended Financial Planning Process. If you are not familiar with this process, you can find a description of it here.