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Episode 3157:

Erik Carter underscores how embracing a margin of safety, a buffer against unpredictability, can transform your entire approach to financial planning, from investing and retirement to insurance and emergency savings. By preparing for less-than-ideal outcomes, you reduce financial stress and increase confidence in your long-term goals, all while building a more secure path to financial freedom.

Read along with the original article(s) here: https://www.financialfinesse.com/2013/09/05/the-3-most-important-words-in-retirement-planning/

Quotes to ponder:

"A margin of safety gives you room for error to be wrong."

"Entering numbers into a retirement calculator that are overly optimistic will produce a case of the old garbage in, garbage out."

"You also don’t want to assume an average life expectancy. After all, there’s at least a 50% chance that you’ll live past average."

Episode references:

Fidelity Retiree Health Care Cost Estimate: https://www.fidelity.com/viewpoints/personal-finance/plan-for-rising-health-care-costs

Stocks for the Long Run by Jeremy Siegel: https://www.amazon.com/Stocks-Long-Run-Definitive-Investment/dp/0071800514

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