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Repositioning Assets

It's interesting to see how much pride of ownership people take in their investments. I can understand the attachment that you may have to the investments that you have purchased; however, I do want to make the point that you may want to look at repositioning some of your assets if they don't meet your retirement goals. It's amazing that you can pick up percentage points just by changing where you currently have your assets invested. It's even more amazing to see the impact of that 1 or 2 percent compounded over time.

For example, let's say that you have created a long-term goal of taking four vacations a year after you retire at age 65. You do the math and determine the assets required to generate enough income to cover your goal for four vacations a year over your remaining life expectancy. Assuming historic inflation and a current cost of $8,000 a year for the vacations, the inflation adjusted amount for a 45-year-old retiring at age 65 would be roughly $15,000 a year at age 65. When you run the numbers, you'll see that you will need $250,000 to fund this one goal.


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