Many of the people I’ve met over the years want re-assurance that they will be able to enjoy the same lifestyle in retirement as they have had during their working years. Retirement is an exercise in cash-flow. The simplest version of a good retirement plan is simply making sure your monthly income will match, or even better, exceed your monthly expenses. Most people have a pretty good understanding of how much money they have saved, but many do not really understand how much money they spend. One way for you to have a greater sense of confidence in your retirement planning is to understand your spending. Once you understand your spending, you can get a rough idea if you have saved enough by multiplying your annual spending by 25. This assumes you will be taking a 4 percent withdrawal from your investments and are comfortable assuming historical returns and inflation will be similar to the future. This simple rule of thumb does not replace a well written cash-flow plan. We created software called Retirement Budget Calculator that can be purchased at to help people who are getting ready to retire better understand their spending.

As published in Mar/April 2018 Westsound Home & Garden