NestEgg News

How do I include anticipated savings prior to my retirement date?

There is an easy and straight forward way to do this. Just simply include in the balance sheet a line item in the cash column. Call it whatever you want: additional savings, payments, etc. then put in the anticipated value of those savings that you expect to have at retirement.

For example, if you still have 10 years left before your expected retirement date and you plan to save another $10,000 per year, then the total would be $100,000.  You can also use any simple interest calculator to show the impact of growth on the annual savings if you expect to save and not retire for at least another 5 years or so. If retirement is less than 5 years away, don’t make it more complicated than it needs to be…just drop in a lump sum that you think you may have saved by then. So put that value in the balance sheet and include those assets in one of the baskets.

What is nice is you can put in several hypothetical savings numbers and only “check” the one you want for each scenario to include it in the total assets available. Let’s say for example you are fairly certain you can sock away at least another $50,000 before retirement. More likely you expect another $100,000. If you are lucky you may be able to save another $200,000, but you feel that may be a stretch.

So you can look at all 3 scenarios (or as many as you like) by “checking” and “un-checking” this new savings asset in your balance sheet.

Now you have a low risk, med risk and high risk numbers to compare side by side.
Place all 3 of these in the balance sheet and only select one at a time to compare the different scenarios.

By doing this you can easily see the impact of saving additional money prior to your retirement date. How much more do you need to save before retirement?  Have you already saved enough but simply need to continue working for a few more years before you start to draw from you assets?

These types of questions can be answered by including an additional line item in the balance sheet that represents future money to be saved.

Blindly following the 4% withdrawal rule for your retirement plan is about as smart as planning for retirement without the assistance of a financial planner.

(please tell me you have a financial planner).

One of the most widely misunderstood rules of thumb is the 4% retirement rule. It simply states that if you draw 4% per year from your portfolio in retirement you should be OK.

Not so fast…NOT SO FAST!

Not all of your money is created equal and the 4% rule assumes it is all the same.

It is not.

Sure… if you have $1 million in your portfolio, the math is pretty straightforward; you can withdraw $40,000 a year and never touch the principle. But by the time you are in retirement for a few years that $40K just won’t buy what it used to. You have to account for inflation.

Nest Egg Software allows you to account for inflation in your retirement planning.

Timing is another problem with the 4% rule. It assumes your portfolio will gain 4% year after year, which of course is not true. Some years it will gain more and some years it will be less. Nest Egg Software allows you to put higher risk (therefore higher return) money in a separate “growth basket” that doesn’t depend on the returns being constant every year. It allows for reality; that some years your portfolio will be up and others years it will be down.

Our retirement calculator allows you to set an average return for the longer term investments to take care of the ups and downs.

As well as allowing you to set a different return for the shorter term investments. Usually at a lower expected return rate to reduce the risk. It is this money in basket #1 that you plan to draw from first in retirement so you need to treat it more like a CD, with lower expected return, but locked in.

The money in the longer term baskets can be treated like long term investment: your stocks and bonds.

Nest Egg Software allows you to assess your retirement plan by treating pieces of your portfolio differently, well because they are different. It is a much more accurate way to predict your financial future.

Nest Egg Software smokes the 4% rule.

To set up your personal retirement planning account only takes about 15 minutes, but if you’re dying to see what Nest Egg is all about you can test drive the software with a sample scenario we have set up for you.

Just simply go to the Log In Page and use the following log in credentials.

User Name:  sample
Password: sample

The username and password are case sensitive and they are both lower case for the sample scenario.

If you want to save changes to the scenario, you are more than welcome but please give it a new name when you save it so the next person who logs in to the sample account can view the original data settings we have set up.

We are sure you will want to set up your own account after you see the power of Nest Egg Retirement Planning Software. Remember it’s free …so go for it.

www.NestEggSoftware.com

Well not directly, but he would if he wasn’t so busy.

“To invest successfully for a lifetime does not require a stratospheric IQ, unusual business insight or inside information. What’s needed is a sound intellectual framework for decisions and the ability to keep emotions from corroding that framework” – Warren Buffett

That is exactly what the Nest Egg Retirement Planning  Software  “Basket Strategy” is all about. We provide an intellectual framework for your nest egg to grow, and you don’t have to have the IQ of Warren Buffett. Also our retirement planning strategy is designed to take emotions out of the equation.

Your longer term assets are placed in baskets 3 and 4 and are “hands off” in the short term. These are your more aggressive investments and you leave them alone so they have time to grow providing more money in your retirement years. The strategy helps manage your emotions because you know you have a guaranteed income in early retirement from baskets 1 and 2, so there is no need to screw around with baskets 3 and 4 trying to “guess” the market.

Not even Warren can do that.

It is sound Retirement Planning.

Basically you allocate your savings or nest eggs into 4 different baskets. Basket 1 and 2 are less aggressive holdings while baskets 3 and 4 are more risky.

Nest Egg Software is a sound intellectual framework for your retirement planning.

Just what Dr. Buffett ordered.

www.NestEggSoftware.com

Nest Egg has put together a quick overview of our retirement planning software to help new users get started. You can see it below.

You can also find more detailed tutorials in our retirement planning tour section.

Here at Nest Egg Software we have released a  new Nest Egg Users Manual for our retirement planning software and retirement calculator. The manual is easy to use and straightforward just like the software. Most people can use the software without having to read any of it, but we provide it here for reference or in case you run into something you need a little more information or help with.

If you can not find your answer to any questions you have about the software just e-mail us at info@NestEggSoftware.com and we will get right back to you with an answer.