WE WON’T KNOW UNTIL we get there.
How much do we need for retirement and what will it take to amass that coveted sum? It sometimes seems like the entire financial advice business—brokerage firms, fund companies, financial planners, online calculators and more—is solely focused on this conundrum.
That’s mostly a good thing. It is indeed crucial to amass enough for a comfortable retirement. Still, let’s acknowledge an inconvenient truth: The resulting retirement projections imply a degree of precision that’ll likely look hopelessly naïve once the real world intervenes.

HOW DO DEFERRED income annuities work and how do they fit into a retirement portfolio? I’m a fan of DIAs—sometimes also called longevity insurance—because of their simplicity and range of benefits. Indeed, I sell them through the insurance website I run. But I also realize they aren’t for everyone.
With a DIA, you hand over a lump sum to an insurer in exchange for regular income payments. Like a standard lifetime income annuity, the payments are guaranteed,

AS I GROW OLDER, I realize how important money and good health are. If we have sufficient income to pay our retirement expenses and if our health remains good, we have the makings of something very special.
What is that special thing? It’s the ability to be independent—to live the life we’ve always lived with few limitations. We can continue to live in our home, drive our car, visit our friends and cook our meals.

IT’S IRONIC THAT WE often shortchange retirement savings during the first half of our working lives, because that’s when we can buy future retirement dollars at a huge discount—thanks to investment compounding.
How can we hammer home this point? My proposal: We should adopt a simple mental math rule that allows us to weigh today’s spending against future retirement dollars. That brings me to my ”6 to 2 times 200” rule. The rule covers five age groups: early 20s,

SHORTLY AFTER I retired in March 2017, I was asked to consult on some projects. I knew it was going to be a more complex tax year than I’d faced before. I had earned income from my previous employer, pension income and self-employment income from my consulting.
On top of all that, my wife started a new fulltime job the Monday after I retired. We switched to her benefits, but her company didn’t have a high-deductible health plan with an HSA,

HERE’S A SOBERING thought: Much—and perhaps most—of the money you’ll accumulate for retirement will reflect the raw dollars you sock away and not the investment returns you earn.
Consider a simple example. Let’s say retirement is 40 years away and your goal is to quit with $1 million. Let’s also assume you can earn an after-inflation “real” annual return of 4%, which is my best guess for the long-run return on a globally diversified,

WHENEVER I TELL people I’m an actuary, I often get the same response: “So you’re the guy who can tell me when I’ll die.” It was funny the first couple of times I heard it, but less so a few dozen occasions later.
Still, the comment is a good reminder of a key statistics principle: Probabilities work well for large groups, but are less useful for smaller sample sizes. Statistics help actuaries predict the number of deaths for a large population.

A DECADE AGO, a large financial firm ran a clever advertising campaign that showed people going about their everyday lives carrying a bright orange six- or seven-figure sum that represented their number—how much money they needed to retire. It was clever because we humans like to simplify—and sometimes oversimplify—complicated issues. It’s one of our cognitive biases.
I spent almost 40 years in aerospace engineering. I did a lot of detailed engineering analyses, calculating expected performance numbers,

WHEN I STARTED working fulltime in 1980, there were very few retirement savings vehicles available to the average worker. I remember setting up my IRA and contributing the $2,000 annual maximum—at the time the only retirement account I could fund.
Today, by contrast, there’s a slew of retirement choices on offer. Where should those new to the workforce focus their dollars? If you have access to a 401(k) or similar retirement plan with an employer matching contribution,

I’M ONE OF THOSE lucky folks whose employer had a traditional defined benefit pension plan. I worked in the aerospace industry, starting with GE in the 1980s. Various mergers led to us to become part of Lockheed Martin. Through these multiple sales and mergers, our benefits and pension plan stayed largely the same, though—to be honest—I didn’t pay a lot of attention in my early years and was only vaguely aware of the details.

ALTHOUGH IT’S ONLY been a few months since I first heard the term, I’m already tired of all the chatter about the financial independence/retire early (FIRE) movement. This so-called movement is so irrelevant that I don’t know why anybody, including me, writes about it—and yet my curmudgeonly instincts compel me to do so.
Don’t characterize me as a movement hater. To each his own. But consider a recent story in MarketWatch about a couple—he’s age 44,

I STILL KEEP IN TOUCH with three high school buddies. One of them, Brent, isn’t doing well. He has high blood pressure, poor eyesight caused by glaucoma and creaky knees that make it hard to get around, and he’s recovering from heart surgery.
My other friend, Robert, is a diabetic with poor vision, suffers from neuropathy pain in the foot, needs a cane to walk and is on medication for various ailments.
Burt, my third pal,

THINK OF IT AS THE ultimate financial Rorschach inkblot test. When you hear about the pitifully inadequate retirement savings of so many Americans, what’s your immediate reaction?
a) This is the inevitable result of stagnant wages coupled with soaring medical, education and other costs; or
b) This is what happens in a financially illiterate society with scant self-discipline and constant temptations to spend.
For me, these differing views were brought into sharp relief by two recent articles on HumbleDollar.

YOU CAN THINK of retirement as having four phases. Want to make sure you make the right decisions at the right time? An age roadmap can help.
Phase No. 1 is the preretirement period beginning at age 55. Why start then? If you leave your employer after this age, you can access your 401(k) without the usual 10% tax penalty on retirement account withdrawals before age 59½. To have this option, keep your 401(k) at your old employer,

I’M ONE OF THE LUCKY Americans with a pension. I know firsthand the sense of financial security that comes with steady monthly income.
Others don’t have it so easy. I worry a great deal about the majority of Americans—including my four children—who have no pension, and instead will rely on Social Security and their investments for their retirement income. My fear: Even if these folks are saving regularly, they don’t really understand how to invest or how to manage their nest egg once retired.