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Episode 3424:
Darrow Kirkpatrick exposes how even modest shifts in retirement planning inputs, like inflation, returns, or lifespan, can produce drastically different financial outcomes. Using a simple couple’s case study, he reveals how uncertainty compounds to the point where the difference between financial freedom and running out of money can hinge on a few percentage points.
Read along with the original article(s) here: https://www.caniretireyet.com/dealing-with-uncertainty-in-retirement-calculations/
Quotes to ponder:
"Retirement planning can be like [the game of Telephone]. Seemingly small differences in input can compound into gigantic differences in output."
"The longer you live, the more chance you’ll run out of money, so that’s a worst case for financial planning."
Episode references:
Social Security Administration Life Expectancy Info: https://www.ssa.gov/planners/lifeexpectancy.html
Rational Expectations by William Bernstein: https://www.amazon.com/Rational-Expectations-Asset-Allocation-Prosperity/dp/0988780313
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Optimal Finance Daily - Financial Independence and Money Advice