Page 122 - Ready Set Retire
P. 122
Stephen J. Kelley
Figure 24: Cost of Forward Planning model
In other words, I need $720,000 minimum if I am going to
make it through without running out of money, assuming I live
four decades. That seems like a lot, but remember, a married
couple age 65 has a 45% probability that one of them will reach
age 90, and an 18% probability that one will reach 95.7 So, do
I plan for a shorter life or a longer life?
To put this in perspective, the odds that your house will burn
down are 1:1200. The odds one spouse will live into their 90s
is about 1:2. In what sane world would virtually everyone
purchases insurance for an event that rarely happens, but
ignores something that happens nearly half the time? Not
many. So, most people confronted with this scenario would
WANT to take the “Less Now, More Later” approach, as
disappointing and unpalatable as that may seem.
However that drives the income which can be withdrawn from
your savings to such a low amount – around 2.8% – most
7 (Vanguard, 2017)
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