Retirement Planning - Essay Example

Apart from these regular expenses education will also be not needed at that time because children will become established and will be the earning family members when I will be retire from my job. So, I am expecting to get an annual post retirement withdrawal amount of at least 25% of the last annual income. I need this amount to be increased every year because of possibility of the increase of the inflation rate. This will result to increase in cost of living. So as the pre retirement income increases every year, the post retirement annual withdrawal amount will need to be increased.

For getting 25% of the last annual of income after the 60 years of my age I need to save 20% of my total annual income. Rate of saving need I will increase at rate of increase in the annual income and for th8is purpose I am also considering the average inflation rate and the average percentage increase based on the past five years growth rate. I do not want a fixed amount after my retirement and for this reason I want a regular income from my savings and also this income from needs to be increasing in order each year so that I can withdraw increasing amount each year after my retirement.

For this amount of withdrawal I have to save 20% of savings each year with increase rate of savings of 1.5% due to the expected increase of cost of living is 3% per year. The total amount will be $1,934,985 including the total interest earned in my retirement account at the last date of work (MSN, Plan Your Retirement). This amount is excluding the amount of saving which I am do9ing at the rate of 20% of my current income with an increaser rate of 1.5% annually. I follow the age vs. risk taken capabilities for my investment portfolio.

According this gives optimum output from an investment portfolio. For this reason I will make rearrangement of my portfolio after the regular time interval of five