For example, if your dream was to live abroad and travel extensively in the early years of retirement and then simplify your life when in your 80s, the above methods would likely lead to a surplus of funds late in life that should have been applied more effectively to living your retirement dream to its fullest potential.
Flexibility is the most important aspect of many soon-to-be and current retirees' plans.
For experienced retirement-planning advisors, some flexibility is usually built into their clients' plans. For example, you can often anticipate the sale of a property or a transition from one residence to another. You might also be able to conservatively factor in an expected inheritance. And it's common to expect retirees to spend less money on lifestyle in their later years.
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The custom approach involves conversation and counsel. It also includes experimenting with "what if" scenarios designed to test the limits of a plan and provide the pre-retiree or retiree with a much clearer perspective of what's possible.
In the end, retirement-income calculations and planning are likely best addressed by looking beyond a cookie-cutter formula, or what is considered the rule of thumb.
Optimal retirement planning is ultimately about defining where you are today, envisioning what your tomorrow could look like and then implementing a well-thought-out customized plan to turn that vision into a reality.
—By Robert Leahy, CEO of Leahy Wealth Management Group