Читать книгу Personal Finance After 50 For Dummies - Eric Tyson - Страница 74

When Eric was working as a financial counselor, one of his favorite parts of the job was going over the retirement analysis with clients who had accumulated more than they needed to achieve their desired lifestyle. Often, this was a surprise to the client, so some folks had a hard time believing the good news.

If you find yourself with extra money, the good news is that you can have peace of mind and more confidence about achieving your desired standard of living during retirement. In this situation, consider taking either of the following actions:

 Enhance your retirement. We’re not suggesting that the only way to a happy retirement is to spend money, but don’t be afraid to enjoy yourself. While you’re still healthy, travel, eat out, take some classes, and do whatever else floats your boat (within reason, of course). Remember that come the end of your life, you can’t take your money with you.MONTE CARLO RETIREMENT SIMULATIONSWhen you start doing number crunching for retirement planning, you begin to realize that the outcome is dependent on many variables, which we discuss in the “Understanding assumptions and how they work” section in this chapter. In addition, other factors, such as how investment returns change over time, can have a significant impact, especially over the short term, on your retirement plans.Over the past century, the rate of inflation has averaged about 2 to 3 percent per year. Growth-oriented investments, such as stocks, have returned about 9 percent per year historically. Bonds and other fixed-income investments have returned about 5 percent per year.Those are long-term averages, which are all well and good, but suppose a worker decided to retire around the year 2000, and, like most retirees early in their retirement, he still had a healthy chunk of his investments in stocks. Because the stock market experienced severe downturns both early and late in the 2000s, his standard of living and ability and comfort with taking withdrawals from his retirement funds may have been impacted.A Monte Carlo simulation runs many different scenarios and calculates the likelihood (percentage of the time) that you will accomplish your retirement goal. The T. Rowe Price retirement calculator we walk you through in this chapter does Monte Carlo simulations and tests about 1,000 market scenarios to see how your retirement plans will work out in many different market conditions.

 Earmark a portion of your assets for your beneficiaries. You may want to leave something for your family members as well as other beneficiaries, such as your place of worship and charities. If so, you need to determine the approximate dollar amount for each of the beneficiaries. Estate planning is so important that we devote Part 4 to it.

Of course, life can throw you unexpected curveballs that may cause you to incur higher-than-expected expenses. But if you’re always preparing for rainy day after rainy day, you may lead a miserly, unenjoyable retirement.