"The Surprising Factor That Shapes Your Retirement Lifestyle and Standard of Living"

The performance of the stock and bond markets is the single biggest determinant of your standard of living in retirement, with more importance than all other factors combined. The correlation between market returns and retirement portfolio returns is almost perfect. While it's tempting to focus on other aspects of retirement planning, such as logistics, the data suggests that a realistic assessment of the stock and bond markets' likely future performance should be the foundation of retirement planning. Projections indicate a 2.7% annualized return for a 60:40 portfolio over the next decade, below historical averages. Planning for this expectation allows for pleasant surprises if the markets perform better.