Monte Carlo Retirement Planning - Have You Stress Tested Your Retirement Plan?

Retirement planning is all about managing the unknowns. Nobody can be certain of how their investments will perform, how well they'll be able to stick to their savings plan, or how much their retirement spending will really be. Yet, each of these variables must be estimated in order to build a solid retirement plan. To make matters worse, investment results are anything but uniform from year to year, and large variations in annual portfolio returns can wreak havoc on even the best retirement plans. Yet, despite all this, many seasoned financial planners are still using archaic tools that don't account for the uncertainty and volatility that's inherent in all long-term planning.

Fortunately, thanks to some powerful new retirement planning research, you are no longer constrained to those simple minded approaches. Breakthrough research has led to a new retirement planning approach called Monte Carlo Simulation. Monte Carlo retirement planning can be used to help manage the unknowns and give planners and future retirees better information about the risks and potential pitfalls hiding along the retirement road that lies ahead.

Monte Carlo Simulation is a planning technique that provides answers in the form of probabilities, or a likelihood of success. Instead of a simple yes or no, black and white answer, a Monte Carlo retirement calculator returns the percentage chance that the plan might work. A retirement plan with a 50% probability of success has the same chance of failing as it does succeeding. Odds like these that would leave most very unsettled. On the other hand, a plan with a 95% probability of success has only a one in twenty chance of failing. Now those odds would make for much sounder sleep.

Another important benefit of this powerful approach is that it allows you to easily build a "model" of your retirement and run experiments with it. Today, the best retirement plans are "stress tested" to expose the weak points and vulnerabilities. Are you worried about what the expenses of long-term care might do to your retirement plan? You can model them in your plan. Are you concerned about the effects of a 20% stock market crash, five years into your retirement? Simulate it. The possibilities are endless for modeling or simulating expected and unexpected situations that could impact your plan. These tools put you in the drivers seat so risk and uncertainty can be kept in check.

You'll be able to use the insights you get from stress testing to make better decisions about how best to protect yourself down the road. Perhaps a long-term care insurance policy is called for, or maybe the simulation will show you that your plan is robust enough to weather even this storm, saving the premiums for a fine European cruise! You thought you wanted to invest your portfolio aggressively for the highest returns, but seeing real numbers that clearly show the potential downside of that high risk portfolio might lead you to reevaluate your risk appetite.

So, you're thinking this sounds good, Where do I start? Well, if you're working with a financial advisor, this is certainly something you should take up with them. Ask them if they use Monte Carlo Simulation as part of their planning process. If you're a do-it-yourselfer, you might like to try a free online Monte Carlo calculator called the flexibleRetirementPlanner that lets you run your own retirement simulations.

Either way, it's clear that the days of leaving retirement planning to chance are over for good. Now, you have the power to manage risk and uncertainty and build a retirement plan that's just right for you and your family.

Financial Freedom Retirement Planning - Achieve Your Objectives Starting Today

Financial freedom is very important for retirement planning? Obviously, everybody wants to live the wealthy lifestyle in their later years. Unfortunately, the vast majority of people fail to live the lifestyle they've always wanted when they are done with work, due to lack of money.

In many cases, they are forced to continue working well past retirement age just to make ends meet. This regrettable situation could have been easily changed with some simple planning and investing. Here are some tips to help you achieve the financial freedom and lifestyle you've always wanted in your golden years.

First of all, keep in mind that the most important part of any retirement planning activity is to know where you want to be at the end. All too many people have no idea of the kind of lifestyle they wish to live when they retire, and yet they attempt to conduct retirement planning without any clear objective in mind.

This is akin to getting in the car and driving without knowing your final destination. Therefore, an important step for you to take before retirement planning is to sit down and write out exactly what you want to accomplish for retirement. Write out the kind of house you want to live in, car you want to drive, lifestyle you want to live, etc. hold nothing back in this process.

Now, put that sheet in a place where you can view it often. This instills in your subconscious mind your retirement planning goals, and you will come up with ideas to help you achieve it, just by merely looking at it and visualizing already having it.

Once you have this financial freedom lifestyle in mind, determine how much money you will need to live the lifestyle, and then find out the investment vehicles that will help you get there. I highly recommend you learn retirement planning investing for yourself, so you can take charge of your financial future.

All too many people entrust their financial freedom retirement planning to a financial services company when they should take control of it themselves. Simply read every book you can find on the topic of investing and making money. Follow these tips, and you will be well on your way to living achieving financial freedom in your golden years.

Business Investing Retirement Planning-Achieve Your Retirement Goals With The Right Investing Plan

So you want some business investing for retirement planning tips? Unfortunately, in today's day and age, many get to the end of their working years completely broke, and are forced to continue working long into what was supposed to be retirement.

You don't want this to happen to you. Retirement should be a time to experience the things you never had a chance to while you were working; don't let a lack of finances rob you of these experiences, especially when they are so easy to obtain.

First of all, in order to achieve your retirement objectives (and therefore know which business investing avenues are best) you need to know what you want to do after you retire. Do you want to own a beach house in California? Travel 10-15 times per year? Just stay around the home and relax?

Knowing this info is critical. Without this, how will you ever know if you are closing in on achieving your goals?

Once you have your goals planned out, now it's time to figure out how much they will cost. This is where a retirement planning calculator comes in. often times, you can find a free one online.

Many companies give these tools out hoping that you will decide to go with them to receive retirement planning advice. Whether you do or not, at least use the tools to figure out the money you will need to retire on.

Now that you know this, figure out how much money you make now, and how much you will need to earn between now and retirement to accomplish your objectives. Only now should you begin looking for an investment vehicle that will get this for you.

For instance, if you have loftier ambitions, and want to travel 15 times a year, then you will obviously need more money than if you were just planning to relax around the home. If this is the case, and depending on when you are beginning investing for retirement, you will want to invest in a more aggressive investment vehicle (of course, this varies depending on whether you are starting at a young or older age).

Once you've found one that provides a sufficient rate of return and will continue to do so until retirement, stick your money in there, and then keep close tabs on it. Remember, nobody else is responsible for your financial state; it's only you.

If you don't know enough about business investing for retirement planning to spot a good opportunity, then either learn yourself or hire a financial planner to figure this part out for you. The most important thing is that you have a plan, and stick to it. This way, you will achieve your retirement goals faster and more easily than you ever imagined possible.

Retirement Planning - When Should You Retire?

Retirement planning is not just about how much you have saved in your retirement account. Your state of mind and ability to fill your days with rewarding and productive activities are just as important as the amount that is stashed away in your retirement account.

Here are some questions to ask yourself:

1. Do you reluctantly go to work each day? If not,. and you still enjoy your job, you're probably not ready to retire - - keep maximizing your contributions to your workplace retirement account, particularly if it is employer matched. If yes, you may be ready to retire (or to change your job).

2. Do you know what you want to do when you retire? If not, it's time to think about the possibilities. If yes, you may be ready to retire.

3. Will your retirement lifestyle and interests require additional income? (Ex: travel, golf). If so, have you saved enough to afford these luxuries? If no, you'll need to modify your interests or keep on saving. If yes, you may be ready to retire.

4. Do you plan to work part time or in a less demanding job in your retirement? If yes, you may be ready to retire. Be sure to calculate this income in your retirement income planning.

5. Do you plan to start a long dreamed-of business, and do you have with the additional capital needed for your enterprise? If yes, you may be ready to retire. Good luck with your business.

6. Are your children self-sufficient? If no, when do you anticipate they will have graduated and entered the workforce? You might want to wait until that time. If yes, you may be ready to retire.

7. Have you and your spouse sat down to discuss how you want to spend your retirement time? Do you agree? If not, it may be time to have that conversation? If yes, you may be ready to retire.

8. Will your spouse continue working? If yes, are you able to keep busy and fulfilled during retirement without the company of your significant other? If yes, you may be ready to retire.

9. Is your mortgage paid off (or almost)? If not, are you ready to move to a smaller house or a less expensive location? If yes, you may be ready to retire.

10. Are you over 62 and qualified for social security benefits? If yes, you may be ready to retire.

11. Are you over 59 ½ with a sizeable IRA or 401(k) account? If yes, you may be ready to retire. If not, do you have another source of income to that will support you in your retirement? If yes, you may be ready to retire.

12. Have you already saved enough in your retirement account to sustain your lifestyle until you are 90? If not, it may be time to increase your retirement income savings contributions. If yes, you may be ready to retire.

13. Did you answer yes to 10 or more of these questions? If yes, you're probably ready to retire.

Retirement Planning Tips For Women

A lot of the attention to retirement planning lately has been spent on preparing men for retirement. That's a crock since women are going to live longer than men. And still have the rest of the retirement savings, what's left of it anyway, to use for the rest of their years.

But, if a majority of male baby boomers are having trouble saving for retirement, are female baby boomers in the same boat?

You don't have to answer. I'll pretend you nodded.

This article will talk about how women can plan for their retirement and start saving for their retirement lives.

Setting up a retirement plan and saving for your retirement may be many years away for you but, if you start early, especially in your twenties and thirties and do that until you retire in your fifties and sixties, you'll have a much more comfortable retirement than your female counterparts who didn't save anything and now are relying on the government to help them out.

Planning for your retirement may seem too far in the future but it can be here before you know it and the sooner you start saving the better off you'll be when it sneaks up on you.

Studies show that there are 60 million working women out there and a little less than half are enrolled in a retirement plan. It will be hard to have a retirement fund if there are no contributions to it.

Women don't work as long as men do at the same job. This is due to taking time off to care for the family to raise the kids. So women don't build up the required years to qualify for a sizable pension or retirement plan, leaving them with little or no savings from the companies they are working for.

Women live longer than men. If you retire at 55, you can expect to live another 27 years on average. Men can expect to live another 23 years on average. If you're married and your husband was the bread winner and you have no retirement savings of your own, where will the income come from for those extra 4 years?

Women also are risk averse when it comes to investing, choosing to invest in conservative investments and bonds which have guaranteed returns but lower overall returns. You'll preserve your capital but you won't have much to show for it when you retire and start drawing on those savings. So the choice is either have more money working for you in low, but safe, investment vehicles as you near retirement or invest more aggressively.

Either way, women need to read about retirement planning as much or even more so than men because you will be spending more of your life in retirement. Talk to a financial advisor, read retirement planning books and check out all the free resources out there to help you save for your retirement. Most people have less than $60,000 saved in a 401k or IRA. There is no way this will last men or women for 20+ years of retirement. The government is not going to be able to supplement everyone...