The Retirement Can of Worms

Wow. Last week I opened a can of worms. And then I bit off more than I could chew. And then lost the entire contents of my tummy when Junior brought home a bug that let us both hurl yellow effluvium from both sides, in an unusual display of family unity.

As a result I did not write as much as I wanted to, and barely managed the emails.

Almost 300 emails about: the ideas people had (a few); the problems people faced (many, many more); how folk had lost it all when their firms went over a cliff (enough to scare the heck out of me); and how people were not going to retire because they had to work until they died (about 20). Some of the emails included spreadsheets, none of which catered for the effects of inflation after 65. It seems that very few of us are aware of it until it is too late.

We each make sense of money in our own way, and with our own distinct bias. We have varying PC skills. Our ages differ. What we have each done so far differs. And what we’re each worth today differs.

Those gaps make it hard to write something worthwhile for each of us, so I opted for a simple approach, spread over three weeks.

This week, I take a look at time honoured retirement planning. I have done my best to make this very simple, and left out the complex stuff. If you find it too simple, yell. (Feel free to explore if you feel the urge. Google has more data than you could ever read.)

Next week, a look at the biggest problem we face: The effects of inflation after 65. A quick look at what has happened in Zimbabwe will show what can go wrong with a ‘normal’ pension.

And the week after, my way out. I am not asking you to do what I am doing, simply sharing it. I hope it adds value. I hope that you can help me bash the square edges rounder. 97% of us are in this boat, often because we trusted a few folk that were wrong about the numbers.

I know it is taking a long way round, but I recall that the last time I published a spreadsheet on this subject I was plagued with questions about how to use it. (And nobody did anything with it.) This time I am going to try and show you a simple method to work this all out with a hand held R20-00 Casio, a pencil and maybe a ruler. (That Casio is faster and more powerful than the computers that got the first Apollo to the moon, so don’t be too afraid.)