Retirement Needs Analysis

Free CFP Exam lesson in Retirement Savings and Income Planning. 16 min read, ~2,326 words.

Replacement ratio (70-80%) gives a quick estimate; the expense method builds a precise budget from actual spending. Use whichever the scenario provides. 4% rule withdraws 4% of the initial portfolio balance, then adjusts that dollar amount for inflation each year, never 4% of the current balance. Capital preservation keeps principal...