This section will help you determine how much of your future retirement income will be supplied by Social Security, Military Retirement, or other government retirement system. 

In the section on Retirement Income we determine our total annual retirement income requirement, R_T.  We need to subtract the portion of our retirement income that will be supplied by Social Security, R_SS, because it is already (or will be) inflation-adjusted.  We will also subtract off any other inflation-adjusted income, R_M, such as Military Retirement payments, that might be received in retirement.  The remainder, R_O, is the supplemental inflation-adjusted retirement income that you must provide from your supplemental savings and investment plan.  The equation is as follows:

        R_O = R_T - R_SS - R_M

Since the actual Social Security and/or Military retirement benefits may not be paid for years, or even decades, and will be adjusted for inflation at currently unknown rates, plus probable adjustments in the federal legislation, we make our best guess now, with an eye to adjusting our estimate as changes occur.  We will want all of our estimates to be in current dollars. 

©2008, Simon Revere Mouer III
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