Your Retirement Income : The Numbers You Need To Hit

Every time the market drops as it did today – I get emails and calls from clients asking if their retirement is in jeopardy.

Our planning services aren’t subject to one bad day or even several bad years. True the recent great run was interrupted today but that will hardly effect the 4 % return we have seen this month.

There is the issue of good  financial  management and planning  – here is a summary if you are considering a retirement plan:

The Numbers 

We are assuming as an example here an individual who makes $50,000 in their first working year at age 25 and they continue to work for 20 years. At age 45 they were unemployed and earned $0 for the year.  They then worked from age 46 to 65, but started at an income that was 5% lower than what they had at their old job.If you earn more and can save more your results  will improve over this scenario.

We assume that they grow their income by 4% a year until age 55, and then the income doesn’t increase at all in the final 10 years. This assumption is based on studies of income by age and the fact that incomes tend to grow by more than inflation in the first 3/4 of a career, and growth slows meaningfully towards the end.

We assume that the portfolio has average earnings of 7.5% a year from age 25 to 49. Average earnings of 6.5% a year from 50 to 64, and average earnings of 6.0% a year from age 65 onwards.Jack A. Bass Managed Accounts are going to provide much more than that but let us be conservative.

We assume that the first year’s pension amount is 65% of the final year’s salary, and the payout grows by 2.5% a year.

We have not factored in tax refunds on contributions nor tax payments on withdrawals.

The net results are:

The pension could pay fully to age 90 and still leave $2.5-million for an estate.

It is never too late to start to save or invest.

If yo would like assistance on your plan email or call Jack direct at 604-858-3202 – same time zone as Los Angeles .There is no cost or obligation for an initial consultation.

Jack A. Bass Managed Accounts added to the KWK holdings – what did you do ?


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