Life Expectancy & Retirement

The Five Cent Nickel recently put out an adroit post that urges readers to consider their life expectancies in your preparation for retirement. He gives a pretty impressive breakdown of how to budget your retirement expenses adjusting for how long you should expect your money to last. My word of advice on the matter is to prepare for longevity--after all, this is not an area of your life that you want to find yourself unprepared for--and expect to live thirty years in retirement. Generally speaking, you can afford to withdraw 3-4% of your nest egg throughout retirement, but often, you're particularly at the mercy of the overall economy during the early stages of your retirement. If say, a recession like the one we saw in 2008 struck during the early stages of your retirement, you'd find yourself with a lot less money to live on than you had probably planned. But if a bull market like the one we saw in 1999 occurred during your first year in retirement, then that might give your assets a boost that would enable you to withdraw 5% of your savings throughout retirement. And unfortunately, these macroeconomic factors are completely out of your hands as you prepare for retirement. To check out a great article on life expectancies and retirement savings, check out this great article at Five Cent Nickel: http://www.fivecentnickel.com/2011/07/06/life-expectancy-retirement-and-the-your-investment-time-horizon/