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What is a Reverse Mortgage?
Reverse mortgages have gotten a bad rap. Admittedly, a lot of it was deserved. A
What Bond Liability Means For Your Retirement Plan
Bond prices are sensitive to interest rate changes, and bond duration is a measure of just how sensitive. For instance, if a increase in interest rates from 2% to 3% caused a bond’s price to fall by 8.5%, the bond would have a duration of 8.5, meaning that a 1% rise in interest rates leads to an 8.5% drop in price.
Your Retirement Number Is Meaningless
Retirement is this big unknown for so many folks, that when someone offers to nail it down to a concrete number, of course people will line up. The only problem is, it’s meaningless.
Do You Need to Diversify Your Bonds?
We spend a lot of time talking about the importance of diversification. We have to look at bonds a little differently; they come with different risks than stocks.
Do You Understand How Bonds Work?
Before we can discuss bonds in depth, it is important that we establish a common understanding of what bonds are and how they work. As a starting point, a bond is a contractual obligation to make a series of specific payments on specific dates.
3 Ways To Incorporate Bonds Into Your Retirement Strategy
Bonds can be incorporated directly into a retirement strategy in three broad ways:
1. An assets-only approach to build a total returns investment portfolio,
2. Matching the duration of bond funds to the duration of the retirement liability, and
3. Holding individual bonds to maturity to generate the desired cash flows to fund expenses on an ongoing basis throughout retirement.
Understanding Bond Returns
Bonds may not be as flashy as stocks, but they form the bedrock of your portfolio, so you should understand how they work.
Dynamic Programming Methods For Retirement Income
In addition to other methods we’ve discussed, a third type of variable spending model uses dynamic programming methods. These methods rely on complex computing power and mathematical equations to integrate spending and asset allocation decisions more completely over the life cycle.
Dynamic programming provides a road map at each point in time for optimal spending and asset allocation, which have been determined by first considering optimal future behavior stemming from today’s decisions.
What are Longevity Goals?
Of all of the different goal types, longevity goals are probably the least intuitive. Your
Comparing Retirement Spending Rules Using Historical Data & The PAY Rule™
Thus far, we have looked at applying a 4% initial withdrawal rate to the different retirement spending strategies. In such cases, we did not use an XYZ rule to calibrate the level of downside risk as the initial spending rate was always the same.
Do You Need an Emergency Fund in Retirement?
Most retirees struggle with how to deal with their emergency fund. It’s there to help you deal with, well, emergencies. Retirees are just as prone to emergency as others, if not more so.
What Happens to Your Pension If Your Former Employer Goes Bankrupt?
Pensions, along with Social Security, are the core of most people’s reliable income in retirement
