The Actuarial Approach described in this website
automatically adjusts spending not only for market declines (or spending more
than the budget) but also for favorable experience (or spending less than the
budget). So like the slogan in the old
Prego commercial goes--"Its in There!"
Financial Decisions in Retirement Made Easier by Focusing on Your Funded Status
Wednesday, February 26, 2014
The Actuarial Approach and Withdrawal Policy Statements--Its in There!
In his February 26 post, Michael Kitces encourages
the use of a written Withdrawal Policy Statement to ensure that retirees have a
plan for dealing with market declines.
Friday, February 14, 2014
Anticipating "Lumpy" Expenditure Needs
As indicated in previous
posts, I believe it is not unreasonable to manage risks in retirement
by diversifying sources of retirement income. This article discusses research that
explains why individuals are "more likely to select an annuity option when
a 'partial' option is offered instead of an 'all or nothing'
option." I especially liked the comment from one of the researchers
who said, “If you anticipate lumpy expenditure needs in retirement (e.g.,
out-of-pocket medical expenses), you want some liquid wealth to cover those
expenses."
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