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Why the Retirement Train Wrecked

"[L]ife expectancy at birth has increased from 47.3 years in 1900 to 68 years in 1950 to 78.2 years in 2009.... A second contributor has been the stagnation of middle class incomes over the past 30 years.... A third contributor to the train wreck is medical cost inflation.... A final contributor ... has been under-saving by Baby Boomers.... Corporations stopped pooling retirement risk for us and left us to handle it on our own. This put a tremendous savings burden on the middle class. Costs went up dramatically while incomes remained flat, so there wasn't much left to save. We enjoyed longer lifespans so retirement costs even more. Most of us had no idea this was transpiring."

Adding Risk to the Retirement Income Model, Part 2

"[If] you are willing to take more risk of a lower standard of living in late retirement, of not reaching late retirement, or of not encountering many large, unexpected expenses, you can increase your spending in early retirement. Spending won't depend solely on your income and expenses, it will also depend on your risk tolerance."

The Ideal Strategic Retirement Planning Process

"The typical retirement plan report is centered around a spreadsheet that purports to anticipate our future wealth annually for the next three decades despite all evidence that such forecasts are well beyond human capabilities.... [A]nalyzing a retirement plan using such a projection as the central assumption is unwise. We end up with retirees looking at their plans and saying, 'Wow! In thirty years, I'll still have $10,264.32 in my bank account! I'm set.' "

Early Retirement: The Cost of Spending Sooner

"The cost of early spending is greater than the cost of forgone savings and the two combined are substantial.... Retiring at 70 allows the retiree to contribute $56,000 more to savings in this example. Five more years of 7% annual returns with no withdrawals provides over $530,000 more in portfolio savings.... Because the 70-year old has a 4-year shorter remaining life expectancy, he can spend 4.6% of this portfolio [each year] ... which is 15% more than the 4% he could spend at age 65. The increase in spending from 4% of $1.18M to 4.6% of 1.71M is more than $30,000 a year."

The 'Future' of Retirement Planning

"if you have planned your retirement with a spreadsheet model, you should take another look, especially if your plan shows a single straight path to doubling (or more) your initial portfolio. It could happen; it just isn't likely and if it does happen it certainly won't be a smooth path. If you're using an online calculator, make sure it incorporates simulation.... But simulations have issues, too, so they're only a starting point."

Spending During Retirement: Realistic Estimates for Replacement Ratios

"[R]eplacement ratios compare costs for the first year of retirement to the year before. Hopefully, your retirement will last longer than a year and it is unlikely that if you decide to travel the world at age 65, for example, you will still be flying at 85.... Even if the retirement you envision requires a 130% replacement ratio, that increase won't last forever and probably won't require doubling your pre-retirement savings target, though it will increase it."

Expense Risk in Retirement

"The most you can lose of your savings is 100% of your portfolio, but you can have unexpected expenses far greater than your savings -- a medical catastrophe, for example.... Most retirement research assumes that you will only spend a 'sustainable' amount of your savings portfolio ... but in reality, you will spend whatever life costs. Spending a sustainable amount of your portfolio is 'retirement savings insurance', not bankruptcy insurance."

Unraveling Retirement Strategies: Floor-and-Upside

"The basic idea behind floor-and-upside is that a retiree devotes some of her retirement funding assets to building a lifetime stream of income and the remainder to an investment portfolio to provide liquidity and the possibility of increasing wealth over time.... [S]ince most Americans are eligible for Social Security retirement benefits, most Americans have a 'floor.' ... [I]magine that you are 85 and your upside portfolio balance just went to zero ... What is the least amount of income you could have remaining that would not make your life an economic misery?"

What Do You Find Most Confusing About Retirement?

"Social Security benefits are confusing, as is the process for identifying optimal claiming ages.... I have trouble finding a good retirement planner.... Figuring out the most tax-efficient way to distribute from IRAs, Roth IRAs, and taxable accounts at the right time is just a few too many variables for me and Excel.... The potential for early retirement.... Continuity of investment and household expense management if I die or become disabled and where to find emotional, decision making, and day-to-day support in very old age, when we're less sharp and mobile."

Retirement Savings and Annual Spending

"[The Motley Fool] took data from a GAO report that includes the current financial status of households between the ages of 55 and 64.... [T]he median annual income implied by the [Motley Fool] chart is only $4,085 for households that buy an annuity and $3,098 for households that go with the '4% Rule'....Realistically, families that have saved less than the median savings would probably be better off using the savings for emergencies rather than annuitizing them."