This post is a follow-up to our post of April 16, 2023. In that post, we said,
“In our ‘real world,’ lots of things can happen in the future that can affect the ratio of household assets to household spending liabilities, including variations in:
- Annual investment returns (i.e., past performance is not a guarantee of future results),
- Longevity,
- Annual inflation (or other rates of increases or decreases in household expenses),
- Spending (this is a huge source of potential variability) and spending goals,
- Sources of income (i.e., Social Security or rental income)
- Assumptions about the future
All these things make it very difficult to predict the future with any degree of accuracy.” In light of these variations, we therefore concluded that it was prudent for retirees to plan on future adjustments in their retirement plans.
