Saving for retirement

Simple Methods to Predict Your Retirement Income

Go To Retirement
Mark Patterson

Do you have a plan for generating retirement income? Do you have any idea how much retirement income you can expect to generate from your existing retirement investments? There are at least two fast and easy ways to make this prediction. (And forget the outdated and discredited “4% rule.”)  Stated another way, the CoRI Index number helps you estimate how much savings and investments you need today to generate a dollar of future, cost-of-living adjusted annual lifetime income starting at age 65.  For example, today’s CoRI index for my age (63) is $19.17.

The new retirement: Money

Katy Read

Doing the retirement-savings math can be a little scary. Or maybe a lot. At age 65, statistically speaking, you can expect to live another 18 to 20 years. Of course, you could be around a lot longer than that, so to be on the safe side financial advisers suggest you plan for retirement with the idea of living to 95 or 100. During those years, experts also say, you should expect your living expenses to remain at or near where they are now (some — wardrobe, mortgage — typically decline in retirement, while others — health care, travel — may increase).

The 80% Assumption, Maybe Not

Planning for retirement is usually over-simplified and full of bad assumptions, like this one: "Assume you will need 70%-80% of what you earned pre-retirement." Well you won't be sending your children through college and maybe you will have your mortgage paid off. And you won't have commuting costs, or still be trying to save for retirement. But on the other hand you will have much higher medical expenses, you may be sending your grandchildren through college, you may be providing financial assistance to your children or your parents.

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