Retirement Blog

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For its February retirement planning issue, Consumer Reports surveyed 24,270 online subscribers age 55 and up about their finances and satisfaction with their lives. The results were clear: You don't have to be rich to be happily retired.

The survey found that:

• 75 percent of retirees with more than $1 million in net worth were satisfied with their retirement, but satisfaction didn't increase among those who had saved a lot more.
• 50 percent of those with a net worth of $250,000 also said they were satisfied with how they were living in retirement.
• 57 percent of retirees said they had regrets about the financial decisions they had made when they were younger.
• 39 percent said they regretted not starting to save for retirement earlier in their lives.

Another interesting part of this report was the result of an analysis by Consumer Reports Money Lab of the performance of Vanguard Managed Payout funds. Consumer Reports concluded that the savings of someone invested in a managed payout fund who withdrew his money at a rate somewhere between 3 percent and 5 percent a year between 1989 and the end of 2009, would have continued to watch his savings increase. Even if  he had taken out 7 percent every year in that time frame, his account total would have stayed about the same. The analysis suggests that whether you invest in a managed-payout fund or carefully manage your money yourself, sticking to the 4 percent withdrawal rule is a pretty safe bet.

A final tidbit I found interesting was the discussion of annuities. The article hearkened back to the '70s and '80s when inflation was devastatingly high and said that should those times come again, a retiree better be prepared. It pointed to deferred annuities as a possible solution. In one scenario, if a 65-year-old retiree puts about 11 percent of his assets into a deferred annuity and the rest into zero-coupon bonds -- which pay all their interest at maturity -- the magazine calculated that he would have "34 percent more money to spend during the subsequent two decades than if he had invested only in the bonds."