Page 77 - Ready Set Retire

Ready. Set. Retire!

one spouse being relied upon for income if that person dies
early in the game? The whole thing can go down the drain.
The key issue is the original premise that using risk-based assets
is an appropriate approach to generating income that is
predictable, stable, and permanent. It’s easy to understand
that’s like trying to put a square peg in a round hole. They just
don’t line up.
Retirement assets are accumulated to replace the income lost
when the retiree no longer has a salary. This is a very specific
requirement that must be a known quantity. People must pay
their taxes, mortgages, utilities, medical bills, food bills, etc.,
whether the market is up or down. These things don’t just get
put on hold when the market crashes. And when one is relying
on volatile markets for steady income, they will be
disappointed over a 20- to 30-year retirement.
There is another problem with these simulations: they are all
over the map. It’s not uncommon, for example, for a single
simulation to produce results that vary by hundreds of
thousands, or even millions, of dollars. Here is an example:

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