Oct. 2, 2023
Catching Up On Your Retirement Fund (Getting Near 45 Years Old. Time To Make Up For Lost Time).
My friend asked me, "How about people starting their retirement fund later in life, like at 45, rather than the 25 to 35-year-old scenarios you already presented?"
My recent writings were on how anyone could build their retirement fund on their own. It was shown there were considerable advantages in doing so. The most valuable was providing a significant and increasing income stream for the rest of one's life once they retired. The emphasis is on the word increasing.
This paper, Catching Up On Your Retirement Fund, provides the underlying equations to rebuild and validate any of the presented scenarios. You can fire up your favorite spreadsheet and redo everything yourself. So, there is no secret sauce, only common sense stuff. If you do this, it will result in that kind of thing. The big question is: will you dare do any of it for yourself and your children? You will figure out ultimately that money spells freedom.
It is not because you are older that you should not retire with more than you need and be financially independent for the rest of your life.
This paper proposes building a retirement fund in two distinct phases.
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The building-up phase to feed your fund and grow it up to retirement.
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The withdrawal phase to generate the increasing income stream once retired.
Usually, the second phase does not provide increasing monthly income checks. It is more the outcome of some annuity with fixed payments for the duration of its contract. That contract might be time-limited to a preset number of years. You will find many options in these annuity funds, including lifetime annuities and indexed.
Most of these contracts have rates of return lower than 10%. You can often see ads in the 5 to 8% range. It usually results in barely maintaining your pre-retirement salary and often forces you to downsize and lower your lifestyle.
We will go another route in Catching Up On Your Retirement Fund. We will look at how you could do it all yourself. You will be in charge of building up your retirement fund and managing its increasing income stream once you retire.
PDF file: Catching Up On Your Retirement Fund, Getting Near 45 Years Old. Time To Make Up For Lost Time.
Created: October 2, 2023, © Guy R. Fleury. All rights reserved.