Retirement Performance

Retire On Track LLC.

In order to optimize your retirement performance, you must first start with a solid financial plan.  Always keep in mind that the earlier you start planning the better, but it is never too late to start planning for your retirement. Start with the creation of a complete financial plan, which includes:

  1. Determination of your ideal asset allocation,
  2. Consideration of the impact of management fees has on your portfolio,
  3. Management of tax liability,
  4. The impact of inflation has on your portfolio, and
  5. Calculation of the appropriate withdrawal rate.

(1)    Determine your ideal asset allocation by taking a short quiz found at

(2)    Bob's free retirement calculator can give you a view of the impact that management fees have on your plan.  Usually, management fees account for roughly a one percent loss of your portfolio each year. One percent may not sound like an insignificant amount, until you consider that on a $100,000 portfolio, that means you will have to make $1,000 a year to just breakeven.

(3)    You can manage your tax liability by first investing in tax-free and tax- deferred investments.  These include - 401(k)s, 403(b)s, 457s, Tax-sheltered Annuities (TSA), IRAs, municipal bonds, and annuities. Use extreme caution with annuities - most are not good investments.  Financial guru Suze Orman is probably the most outspoken person on her distain for annuities.  While she supports investment in TSAs that many school and hospital employees are offered in their retirement plans, she thinks other annuities do not make sense for most people to invest.  You can read more about Suze's view on annuities in her book The Courage to Be Rich.

(4)    Do not underestimate the withering affects of inflation on your purchasing power.  Historically, the inflation rate has been about 3 percent.  Thus, with just the average inflation rate of 3 percent, your costs double every twenty-four years.   You can expect to spend as much time in retirement as you did when you worked.  Therefore, you can expect to see your expenses double during your retirement years.  Ouch!

(5)    Calculation of your appropriate withdrawal rate is extremely important.  You need to make sure you follow the government's minimum distribution requirements for retirement accounts.  This is another item that can easily be projected with the help of a good retirement calculator like the one found on this site Click Here

You are the best person to manage your money.  But, that does not mean you have to depend solely on your own financial talents.  Even the most seasoned investors need some professional retirement planning help.  To start building a financial plan, consider a FREE subscription to Financial Tips & Hints. Included with every subscription, is Bob's Retirement Calculator.  The newsletter contains short articles that are information-rich, just like this article. Delivered once a month, the newsletter is full of tips to help optimize your retirement performance.