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# Not all nesteggs need look like all the others
- URL: https://www.smdp.com/not-all-nesteggs-need-look-like-all-the-others/
- Published: 2006-08-10T15:00:00.000Z
- Updated: 2026-10-25T00:35:16.000Z
- Author: Guest Author
- Tags: Opinion, Santa Monica, #archive-import

*By BRIAN HEPP*

In a time of super spenders and discontinued company pension plans, saving for retirement has become an increasingly difficult task. Because we must rely primarily on our own plans and estimates, it is quite common for us to look to conventional wisdom when planning for life after we’ve quit working. Personal finance literature, savings programs and expert advice may seem endless, each offering ‘tricks of the trade,’ but it is important to examine each of our unique personal circumstances before settling with the standard. After all, nesteggs come in many different sizes and situations.

One of the most common ‘rules’ in retirement is to avoid tapping your tax-deferred accounts and instead generate cash by liquidating other investments. While this option can be beneficial in many circumstances, you may also want to consider those accounts with the lowest rate of return, regardless of whether they are tax-deferred or not. By historical standards, interest rates today remain relatively low. While core inflation also is low, the real return on fixed-income investments such as bonds may be lower than that of various equity securities. To illustrate, under this scenario, a hypothetical portfolio composed of 50 percent stocks and 50 percent bonds would likely last longer if bonds were withdrawn before stocks.

Another common retirement ritual is to begin taking withdrawals from Social Security. However, it is important to keep in mind the rules associated with these benefits. You may want to delay taking Social Security for as long as possible. Remember, your payouts will rise for each year you wait until age 70, but if you withdraw before your 70th birthday, there is a small increment of reduction for each month you take benefits early. And, the reduction is permanent. For example, if your full retirement age is 66, and you begin to take benefits at 62, each check you receive from that point on will only be 75 percent of the full amount you would have received had you waited.

Another bit of conventional wisdom deals with the percentage of your current income that you will need in order to have a comfortable retirement. Many say that the average American worker will need approximately 60 to 80 percent of their pre-retirement income in order to maintain their current standard of living. Before these numbers are set in stone, however, there are various factors to consider that may push you to strive for even more savings.

For example, health care costs are rising. In fact, during the coming years, the increase in health care costs is expected to continue to outpace inflation. Additionally, there is also the possibility you may need nursing home care. The U.S. Department of Health and Human Services estimates that about 40 percent of people aged 65 or older have at least a 50 percent lifetime risk of entering a nursing home.

Along with the increased burden of medical care, many retirees dream of exotic trips to faraway destinations during their golden years. Be sure to factor this in as well. While many of your expenses — commuting costs, professional attire and children’s needs — may go down once you enter retirement, different priorities or needs may meet or exceed your previous costs. These are just some of the additional considerations you need to be aware of when planning how much income you’ll need in retirement.

While personal finance and retirement planning advice seems plentiful in today’s world, it is essential for you to look at your specific situation in order to tailor a retirement plan that’s right for you. As your needs change and your nestegg evolves, you may find the need to question “convention” to meet your own retirement goals. (Brian Hepp is a financial consultant and (310) 453- 0077 or at)

*Originally published in the Santa Monica Daily Press print edition on August 10, 2006.* [Read the original PDF.](https://s3.us-east-1.amazonaws.com/smdp%5Fbackissues/081006.pdf?ref=smdp.com)