In the spirit of Thanksgiving, what should investors be thankful for?
Low Fee Index ETF’s. Access to a liquid S&P500 Tracker for 0.05%, who-wouda-thunk? Fees are the silent killer of your portfolio, lower the fees more of the return you get to keep!
I am a strong proponent of loading up on I Savings Bonds issued by the US Government treasury. In treasury’s own words
I Bonds are a low-risk, liquid savings product. While you own them they earn interest and protect you from inflation.
- Sold at face value; you pay $50 for a $50 bond.
- Purchased in amounts of $25 or more, to the penny.
- $10,000 maximum purchase in one calendar year.
- Issued electronically to your designated account.
It’s a question we should have an answer to. What’s your retirement number, how much money do you need to live comfortably through retirement.
It’s a complicated question, and scares most people (it scared me :)) But have no fear, Excel to the rescue! You can build a rudimentary model to at least get a good idea of your number. All values in the model are post-tax numbers. Tax effects are for another post!
Some base assumptions:
- Retirement age is 65
- Life expectancy is 80
Lets break it down.