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Understanding the Tools in Your Retirement Income Toolbox
You should be familiar with all the tools in your retirement income toolbox. Understanding how each of these resources works, including where its strengths and limits lie, helps you assemble a flexible plan that can adapt to market fluctuations, inflation, and the possibility of a longer life. Retirement plans can be built to manage varying…
Read MoreShould I Stay or Should I Go? Housing Decisions in Retirement
A plan to meet housing needs is an important part of a retirement income strategy. A home provides an emotional anchor, providing daily comfort and shelter, memories, and nearness to friends and community. Homes are also a major source of wealth for retirees and near-retirees. Home equity provides between 45 and 75% of median household…
Read MoreThe Continuum of Long-Term Care
As we age, the question of where and how we will receive long-term care becomes increasingly significant. While many envision institutionalized living as the inevitable solution, the landscape of care options has expanded significantly, allowing individuals to receive care in more familiar and comfortable environments. With proper planning, it is often possible to remain at…
Read MoreThe Importance of Planning for Long-Term Care
A well-designed retirement plan must cover predictable spending and include provisions for unexpected contingencies that may arise during a long retirement. One of the most severe and unpredictable expenses retirees may face is long-term care (LTC). This encompasses a broad range of services addressing physical, mental, social, and medical needs that arise from significant physical…
Read MoreRetirement Income Strategies with Annuities
Originally published in Forbes. Income annuities come in a variety of shapes and sizes. Knowing which makes the most sense for your situation can be overwhelming. In this article, I will explore how income annuities work and what options are available. When do income payments start? Annuities can be either immediate or deferred. An…
Read MoreWhich Is Better for Retirement Income: Insurance or Investments?
Retirement income planning has emerged as a distinct field in the financial services profession. But because it is still relatively new, the best approach for building a retirement income plan remains elusive. There are two fundamentally different philosophies for retirement income planning, which I call probability-based and safety-first. Those philosophies diverge on the critical issue…
Read MoreRisky Business: Why Younger Investors Should Take Risks in Their Portfolio
Millennials began their careers around the 2008-2009 downturn and are understandably gun-shy around stocks. They saw their parents’ losses and want to avoid having the same thing happen to them. As a result, most millennial investors are opting for the security of large cash positions or more conservative portfolios to make sure they don’t experience…
Read MoreDave Ramsey’s 8% Withdrawal Rate
Having spent the better part of the last 10 years in Japan, I have not been all that familiar with Dave Ramsey. Sure, I’ve heard from time to time that there is a radio show financial guru who talks about 12% market returns and an 8% withdrawal rate in retirement, but that sounded so farfetched…
Read MoreWithdrawing a Constant Percentage of Remaining Wealth
For almost all of my work on retirement withdrawal rates, I’ve assumed a constant inflation-adjusted withdrawal rate strategy. That is, the withdrawal rate is defined as an amount of income withdrawn in the first year of retirement as a percentage of retirement date assets. This income amount then adjusts for inflation in subsequent years. Since…
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