Comments on: What Does “NAVA” Stand For? http://allfinancialmatters.com/2007/07/10/what-does-nava-stand-for/ A personal finance blog dedicated to discussing such topics as budgeting, asset allocation, 401K, IRA, cash flow, insurance, financial planning, portfolio management, and other areas in personal finance. Sat, 11 Feb 2012 20:32:19 +0000 hourly 1 http://wordpress.org/?v= By: Minimum Wage http://allfinancialmatters.com/2007/07/10/what-does-nava-stand-for/comment-page-1/#comment-119768 Minimum Wage Wed, 11 Jul 2007 01:23:30 +0000 http://allfinancialmatters.com/?p=1880#comment-119768 NAVA is like JAVA but without the caffeine. NAVA is like JAVA but without the caffeine.

]]> By: Matt http://allfinancialmatters.com/2007/07/10/what-does-nava-stand-for/comment-page-1/#comment-119710 Matt Tue, 10 Jul 2007 21:20:31 +0000 http://allfinancialmatters.com/?p=1880#comment-119710 Looks like Ben Stein wants us to win our own money :) I thought it was interesting how he used a replacement rate of income to calculate how much is needed for retirement (in the the first video). I think the general consensus in the financial planning community is that this is actually a poor metric, since if your income is high and your retirement expenses are low, you're going to get a number that's way off. It's better to use a % of your total assets in retirement, since you're not going to spend more than you have actually saved. Annuities may are a good solution (and incidentally the replacement rate calculation is promoted by insurance companies that sell annuities), but within that group there are a lot of options, some more appropriate than others. The problem is that if you pass away early you're going to leave a lot of money on the table. Money that you could pass on to family members or charities. This may be worth it for the peace of mind it creates, though. Looks like Ben Stein wants us to win our own money :)

I thought it was interesting how he used a replacement rate of income to calculate how much is needed for retirement (in the the first video). I think the general consensus in the financial planning community is that this is actually a poor metric, since if your income is high and your retirement expenses are low, you’re going to get a number that’s way off. It’s better to use a % of your total assets in retirement, since you’re not going to spend more than you have actually saved.

Annuities may are a good solution (and incidentally the replacement rate calculation is promoted by insurance companies that sell annuities), but within that group there are a lot of options, some more appropriate than others. The problem is that if you pass away early you’re going to leave a lot of money on the table. Money that you could pass on to family members or charities. This may be worth it for the peace of mind it creates, though.

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