This is another one of the big questions related to retirement. How do you know what to save or how to invest if you don’t know what your income needs are?
It is a simple question on the surface, but to get the answer it can become complicated very fast. There are many resources available but that is part of the problem. With so much clutter and noise, it is hard to find something that provides a basic understanding of the problem at hand.
Thanks to Marlena Lee of Dimensional Fund Advisors for producing this excellent video. It provides a clear and concise overview of determining how much income you need in retirement. Here is a little more information about Marlena. As a vice president on Dimensional’s Research team, Marlena conducts research in asset pricing and macroeconomics. She shares the results through published research and in presentations to institutions and financial advisors who work with Dimensional. Marlena is also a member of the Investment Policy Committee. Prior to joining Dimensional, Marlena gained experience explaining complex financial concepts as a teaching assistant for several professors, including Professor Eugene Fama. She has also worked as an economic consultant on antitrust litigation cases and as a research assistant at the Manhattan Institute of Policy Research.
Marlena earned her PhD in finance from the University of Chicago Booth School of Business. She also holds an MBA from the Booth School of Business and an MS in agricultural and resource economics and a BS in managerial economics from the University of California, Davis.
Here is a link to Marlena’s video. All you have to do is click on the link: https://youtu.be/6oQBSqRQSGk
If you are intrigued by Marlena’s video, you may want to read her more detailed paper on the subject. Retirement_Income_Equation
Planning for retirement is complicated. Hopefully, this video and paper will help you understand one of the basic questions, “How Much Income Do I Need In Retirement?”
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