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Early 50's retiring in 2028

Married couple close to retirement

Check out our scenario of a husband and wife retiring in their 60's and 5 years out from retirement. They are concerned as to whether they have saved enough in retirement and what to see what retirement might look like for them.

Working with Laptop
Late 50's retiring in 2025: Press Kit

This video shows the steps if financial planning and retirement.

Step 1: Add a new scenario.

Step 2:  Click on the blue info tab and enter the info needed such as name, age, desired retirement age for scenario, and the life expectancy.

Step 3:  Enter the current balances of all accounts such as 401k's, brokerage accounts, money markets etc. Enter the projected growth rate for each account and use a conservative estimate.

Step 4:  Add all sources of income such as salary and/or self employment currently and then add all future sources of income such as pensions and social security. For each income source make sure the start dates and end dates are correct. Also estimate the annual increase (if any) of each income such as a 1.5% annual salary increase. Add any 401k or IRA contributions being made on a monthly or annual basis under this tab also.

Step 5:  Add all expenses under this tab. It is best to estimate high on annual expenses. Since one might not know the exact annual cost of living it may be best to enter each expense, then go to the loan payments, and finally add any one time future purchases that aren't reoccurring such as a vehicle purchase. Make sure the begin and end dates are correct and enter an annual inflation for each category. Loan payments do not have inflation

Step 6:  Once all of the information is entered in its entirety, look at the future cash flows until the end of the life expectancy and make sure there is capital left over and that the money doesn't run out before the end of the life expectancy. Check out the surplus each year to see how much one might save or spend each year to cover the cost of living. Does the money run out before the end of the life expectancy (see step 7)

Step 7: Take a look at changing some of the future plans to see if the money might last. One option would be to increase the retirement age and work longer, or another one might be to retire on course but work part time to generate some extra income. You could also try increasing the 401k contributions, delaying the social security age, investing more aggressively (don't get to crazy on the growth rates), reducing expenses and so forth. You could also check to make sure all the capital was input. If an inheritance is expected you could enter a sum of money and put the start date as a future date. Also if a spouse dies and there is life insurance, you could make sure those cash flows are added as well in the future.

Step 8: Print a PDF report of the scenario and save it in the file to compare against cash flow projections each year and to ensure financial independence.

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