An interesting paper was recently released that concluded that fear keeps older Americans from experiencing their dream retirement.

“You have nothing to fear, but fear itself.” Nice phrase, but does it apply to retirement finances?

Spending all your financial resources is a real concern of most retirees.

They usually address this issue by living more frugally and spending less. Studies show that the amount left as legacy actually grows when they do that.

But a better solution may be to reduce that legacy in exchange for more retirement income. At 75, $100,000 can pay as much as $8,500 per year. That can help retirees come closer to their dream retirement and avoid becoming a burden on their children while they are still around.

Give your children something to appreciate while you’re still here–the knowledge that your golden years are just as you’d hoped.

A Morningstar article I read advocated, “Forget income replacement. Focus on supplying cash-flow needs.”

It was an informative article about figuring out your income needs in retirement.

I agree that using replacement ratios might be good for longer rate pre-retirement savings, but not for actually planning out your retirement budget.

While budgeting is absolutely critical, it may be a fruitless exercise if your retirement income plan doesn’t produce enough spendable (after-tax) income.

That’s why we like to start with knowing what risk-free income your savings can actually produce. With that number in mind, you may take a sharper pencil to your budget.