I am a big fan of Todd Tresidder at Financial Mentor, so I was excited to review one of his 60 Minute Financial Solutions books. How Much Money Do I Need to Retire? helps you accurately analyze all of the conventional assumptions in retirement planning in order to understand why they can be extremely misleading. This helped me a lot. I’ve always known that the whole “8% annual return” number couldn’t be entirely accurate, but Todd shows exactly why it’s such a dangerous assumption (the short answer is that it’s never a neat 8% return and the volatility of negative returns one year followed by positive returns the next can be devestating on your portfolio.) Next, even small changes in inflation can have dramatic eroding effects on your retirement portfolio. So when searching for that Magic Retirement Number, it helps to realize that actually, there is no magic number. You should calculate for a range that you feel comfortable with, based on different spending, saving, inflation and investment return scenarios. The book is worth your time and I just want to leave you with Todd’s two critical numbers that will help you best plan your retirement:
- #1: Percentage of income saved versus income spent
- #2: Return on investment minus inflation
There is a ton of helpful information and ideas in this book, even if you think you are many years away from retirement (I know I am). I like the Ultimate Retirement Calculator that lets you play with a bunch of variables. I also like that it delves into business and real estate assets as part of a retirement portfolio, since I really don’t think of myself ever retiring, I always want to be active in business, knee-deep in projects, and an owner of rental properties.
Giveaway: I have a copy to giveaway and entry is really, really easy! Either follow me on Twitter or show me some like on Facebook and enter using the Rafflecopter below. You’ll get this awesome book mailed to you!