Are you going to be broke in retirement?

So I am not a sales person and try not to be pushy, but I have to share with you some of the results of the recent 2010 Retirement Confidence Survey.  The survey shows that 44% of all workers in the US just took a guess (is this a random guess?) at how much money they needed to save for retirement!  The next statistic is even more concerning.  Almost 30% of Households with annual income of $75,000 or greater thought they only needed $500,000 or less for retirement!

There is a rule of thumb that says you can withdraw about 4-5% of your portfolio per year throughout retirement.  This would mean that at 5% the household would only be drawing $25,000 ($500,000 * 5%) a year from their portfolio!  This would be a HUGE decrease in standard of living!

If you don’t know how much you should have saved, find a planner at www.napfa.org

Source:  http://www.ebri.org/pdf/briefspdf/EBRI_IB_03-2010_No340_RCS.pdf  (check out page 23)

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How do I manage cash flow?

Managing your day-to-day finances can seem like a daunting task. Computer programs such as Microsoft Money and Quicken can be cumbersome to learn and use given all their capabilities and set up time. With recent developments in technology, you can put your budgeting and cash-flow management on auto-pilot. You may want to consider using the user-friendly website at www.mint.com.

Mint allows you to set up a free account and add login information for your online financial accounts; including credit and debit cards and bank and investment accounts. As you spend, save, and invest, Mint automatically records transactions and categorizes them. For instance when you buy a mocha frappe from Starbucks, the budgeting program automatically categorizes the purchase under Food & Dining–Coffee Shops. Additionally, when you purchase an investment, it will be recorded in your Investments tab. You can use Mint.com to track and manage your spending, track your investments, or even build a comprehensive personal balance sheet, showing assets, liabilities, and a net worth figure.

Photo thanks to wibbly pig on flickr.com