Budgeting for retirement - Veterinary Economics
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Budgeting for retirement


VETERINARY ECONOMICS

Q. I'm looking to retire in a couple of years. How long would $600,000 last me if I withdrew $31,000 annually? I want my purchasing power to remain constant, with no decrease in my standard of living.


Fritz Wood
Veterinary Economics Personal Finance Editor Fritz Wood, CPA, CFP, says that a reasonably diversified portfolio—60 percent stocks, 30 percent bonds, and 10 percent cash—has an 80 percent likelihood of annually dispersing an inflation-adjusted $31,000 for 25 years. In other words, if you're retiring at 65, that $600,000 has an 80 percent chance of lasting you until you're 90 years old.

Wood recommends accessing a retirement income calculator online such as the one at http://troweprice.com/ric. But be aware, he says, that the retirement income calculator isn't a substitute for a comprehensive financial plan, and you shouldn't rely on it as your sole or primary means for making retirement planning decisions. "The projections are hypothetical—they simulate 500 future economic scenarios," he says. "The projections don't reflect actual investment results and aren't guarantees of future results."

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Source: VETERINARY ECONOMICS,
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