The five critical estimates that you must make before starting the retirement planning process are to estimate (1) how many years you have until retirement, (2) how many years you will be in retirement, (3) the average rate of return you will receive on your investment portfolio before retirement and the rate of return you will receive on your investment portfolio before and during retirement, (4) what the rate of inflation will be both before you retire and while you are in retirement, and (5) the average tax rate that you will likely pay during retirement.
The first step is to set retirement goals and estimate how much money you will need at retirement.
It is important to include inflation in calculating how much money you will need to save for retirement so that the amount of money you accumulate for retirement has approximately the same buying power as that which you have planned for.
The two ways in which you can sell your home are (1) for cash, and (2) through a reverse mortgage.
Your investment shortfall is the amount of money that you must invest (above and beyond the estimated future value of your assets) in order to meet your retirement goal.
