Retirement: I QUIT Traditional Retirement Planning and You Should TOO!
I've been making some notes with plans to write some sort of "my first year of retirement" post. I might still do it, but saw this video today and thought I should share it.
I've worked with a financial planner and been through the probability of success exercise. This video correctly points out that probability of success does not take into account your behavior when the stock market takes a dive. Someone with a low probability of success may need to watch their nest egg more closely and be willing to adjust, but to be honest, I think most of us will be doing that anyway.
I feel like I need to look at this guard rail approach more closely.
At the end of the video, he shares the odds of future market downturns over the course of a typical retirement. That's worth paying attention to.
https://www.youtube.com/watch?v=JSYbdgB0JBw
Feedback
Hi Mark,
Another great video. Feel free to share if desired:
It's very similar to our situation. The Monte Carlo percent success is a useful tool in that it creates a starting point. Basically, if your percentage is probably less than 70% at the start of your planning (before you retire), then you have two choices:
- Work longer to increase your SSA and pension.
- Spend less in retirement.
If your analysis shows close to 100%, then you can live very well/leave lots of $$ to your kids or you should retire very soon (assuming that the love of your life is not Corning). If your percentage is say 70-90%, then you need to dig deeper into your retirement plan like this video does.
For Vicky and I, it's simple. If we stay in our 40 year-old house as long as we can walk up stairs, the percentage is very high and that is partly why I retired when I did. If we move to a more expensive house in the area or move to another state, then the analysis in this important video comes into play. We are in the middle of going through this type of analysis with our CFP right now.
Ray