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Does The 4% Rule Work Around The World?
From a global perspective, asset returns enjoyed a particularly favorable climate in the twentieth-century United States, and to the extent that the U.S. may experience reversion in the twenty-first century, present conceptions of safe withdrawal rates may be unsafe.
Navigating One Of The Greatest Risks Of Retirement Income Planning
The financial market returns experienced near retirement matter a great deal more than most people realize. Even with the same average returns over a long period of time, retiring at the start of a bear market is very dangerous.
What Do Market Expectations Have To Do With Safe Withdrawal Rates?
Rather than asking for the probability of success associated with a particular withdrawal rate, we could calculate the highest sustainable withdrawal rate linked to a particular probability of success.
The Advantages Of Monte Carlo Simulations In Retirement Income Planning
One of the classic approaches to studying retirement withdrawal rates is to use Monte Carlo simulations that are parameterized to the same historical data as used in historical simulations.
Does Asset Allocation Affect Withdrawal Rates?
One other important factor from William Bengen’s original study is asset allocation. In particular, he recommended that retirees maintain a stock allocation of 50-75%, writing, “I think it is appropriate to advise the client to accept a stock allocation as close to 75 percent as possible, and in no cases less than 50 percent.”
What Can We Learn from the Market Disasters of the 1970s?
Throughout history, when bad news and events touched the daily lives of investors and caused
Sustainable Retirement Spending and Market Returns
What happens to sustainable spending rates as the planning horizon extends, or
if we build in a constraint to preserve wealth and avoid portfolio depletion?
Business Owners: Did You Know You Are a Fiduciary?
Employer-sponsored retirement plans — such as 401(k)s or 403(b)s — are one of the primary sources of retirement savings for Americans. If you are an employer who has set up such a plan, you might not be aware of the responsibilities that come with your role as a plan sponsor.
With Retirement Longer Than Ever, What Is the New 4% Rule?
One of the most hotly contested debates in personal finance is over the safe withdrawal rate for retirement. How much can you expect to spend sustainably from your investments during retirement? What do we need to do to be safe?
The Hidden High Costs of Index Funds
Here we cover the basics of index funds. Today, many investors use index funds because they provide an easy way to gain cheap, diversified exposure to specific areas of the market. The question is this: Is an index a precise representation of the sector of the market it describes?
Are You Paying Too Much For Your Retirement Plan Advisor?
This post will dive deeper into what you should expect from your retirement plan advisor and how they should be compensated.
Understanding How Financial Advisors Are Compensated
With the value provided by good financial decision making and the impediments people face to achieve good financial outcomes for themselves, it is worthwhile discussing more about the advisory profession and understanding how advisors are paid, if for no other reason than in the interest of increased transparency.
