Retirement planning
-
Financial Planning for a Disabled Child, Part II
Have you planned ahead for the financial well-being of your disabled child? Make sure your loved one doesn’t have money worries after you’re gone. This is the second of two posts on how a family with a disabled child can plan ahead to provide financial security for their loved one. In the first post, I reviewed government programs that can provide vital health coverage and income to those with disabilities. Read that post here. Financial Security for the Long Run As a parent of a child with a disability, one overriding worry I can’t shake is the concern of every parent everywhere: what will happen when I’m no longer around? …
-
Financial Planning for Families with a Disabled Child
For most of us, retirement planning involves saving money consistently, helping it grow through investment and the power of compound interest, and eventually spending down our nest egg at a sustainable rate to fund a comfortable retirement. If something remains at the end of the line, that’s great, but not really that important. Your grown children, whom you have loved and nurtured, and perhaps helped through college, are able to fend for themselves. But what about the parents of a child with a serious physical or mental health disability? This child may be unable to work and may need assistance to accomplish daily activities that most of us take for…
-
Should You Hire a Financial Manager? Human or Robot?
There’s nothing like a raging pandemic to bring home the reality that your mortality is not just a theoretical possibility. Not unlike the effect of knowing one will hang on the morrow, the current situation has motivated me to give some serious thought to what happens when I’m gone. While I’m quite comfortable managing our finances, my wife’s ability to find an excuse whenever I try to sit down and go over things makes me realize that she doesn’t share my zest for this financial stuff. So what would happen if I were no longer around to monitor our far-flung accounts, rebalance things periodically, and hunt for the best CD…
-
Cabin Fever? Curl Up with a Good Finance Book
As the world hunkers down to weather the coronavirus, you find yourself in an alternate reality. Just weeks ago, you were busy working, volunteering, seeing friends, traveling, going out to restaurants and shows. Suddenly, you are confined to quarters, venturing out only for daily exercise and essential needs. You have unaccustomed time on your hands. You feel a certain sense of accomplishment from having binge-watched all twelve seasons of Red Dwarf, but what should you do next? “You’ve …binge-watched all twelve seasons of Red Dwarf, but what should you do next?” Here’s an idea: why not read some of those personal finance and retirement planning books you’ve been meaning to…
-
The Market Just Crashed! What Should I Do?
As I write this post, the Dow Jones Industrial Average has just dropped 1,000 points – the sixth 1,000 point move in the last 12 days. The Dow and the S&P 500 are 13% below their most recent high, well into correction territory. The interest rate on 10-year Treasuries, a safe haven in times of market turmoil, has dropped to a record low 0.7% — substantially less than inflation and only slightly better than stuffing your money in a mattress. (The interest rate on Treasuries, as with all bonds, is inversely related to its price. As panicky buyers bid up the price, the corresponding interest rate is driven down.) The…
-
Make Your Own Retirement Spreadsheet — Part II
In the previous post, I suggested reasons why you might want to create your own financial planning spreadsheet, and described the nuts and bolts of setting one up. But there’s still the problem of choosing reasonable inputs and interpreting results in a way that gives you insight into your financial future — rather than leading you astray. In this post, I go over how to make the most effective use of your spreadsheet plan: how to handle inflation, what you might assume about investment rate of return, how to do sensitivity and what-if analyses, and how to check your results against other tools. Inflation — What to Do With It…
-
Make Your Own Retirement Spreadsheet
In my last post, I encouraged those so inclined to create their own financial planning spreadsheets. However, I didn’t provide enough detail to allow the motivated reader to go and set one up. This post fills that gap, providing enough specifics to enable anyone who knows how to use a spreadsheet to map out her financial future on a home computer. If this sounds like something you might want to do, read on! Why Go to the Trouble? But, you may ask, why should you put the time and energy into making your own planning spreadsheet from scratch when there are plenty of powerful software programs out there that will…
-
Create Your Retirement Plan: the Eightfold Path
Do you have a financial plan for your retirement? Do you need one? What exactly is a retirement plan, anyway? If your answers to these questions are a bit vague and uncertain, read on! This post will lay out why you need a plan for the years after you stop working (yes, you should have a plan), and how to go about creating one. The good news is it’s not that hard to do. In fact, if you’ve been reading my posts until now (and, of course, following up on my recommendations!), you’re 80% of the way there already. This post pulls the pieces together into a single whole; eight…
-
10 Great Retirement Planning Blogs
There are quite a few excellent financial planning blogs out there – so many that I sometimes wonder why I’m adding my own site to what is already a crowded space in the blogosphere. Then I recall how much of what is out there is misleading, self-serving or just plain incomprehensible. My goal is to provide sound retirement financial planning ideas and advice, written in plain English, without any underlying agenda. I believe investing and financial planning are really quite straightforward if you can tune out the noise. I try to provide enough explanation and references that the curious reader doesn’t just have to take my word for what I’m…
-
What the Heck is Monte Carlo Analysis?
In reading about personal finance, you may have come across references, often hushed and worshipful, to a mysterious thing called Monte Carlo analysis. Perhaps you wondered: What is it? Is it really the gold standard for financial planning? Are there any alternatives? If this sounds like you, read on! What is it? Monte Carlo analysis, developed by mathematician and nuclear scientist Stanislaw Ulam while working at Los Alamos in the 1940s, is an important tool for modeling a complex system when a key variable is unpredictable, but whose possible values can be described with a distribution (such as a bell curve). Monte Carlo essentially substitutes an entire probability distribution…
