Bond prices are sensitive to interest rate changes, and bond duration is a measure of just how sensitive. For instance, in Exhibit 1.1 (shown in my last article), an increase in interest rates for the simple bond from 3 percent to 4…

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…

This article is part of a series; click here to read Part 1. The safety-first school of thought was originally derived from academic models of how people allocate their resources over a lifetime to maximize lifetime satisfaction. Academics have studied these models…

Within the world of retirement income planning, the siloed nature of financial services between investments and insurance leads to two opposing philosophies about how to build a retirement plan. There is an old saying that if the only tool you have is…

This article is part of a series; click here to read Part 1. Spending shocks Unexpected expenses in retirement come in many forms, including: unforeseen need to help family members divorce changes in tax laws or other public policy changing housing needs…

This article is part of a series; click here to read Part 1. The fundamental risk for retirement is unknown longevity, which is summarized in the question, how long will your retirement plan need to generate income? It is the risk of…

It is important to understand from the very outset how changing risks are primarily what separate retirement income planning from traditional wealth management. Retirees have less capacity for risk, as they become more vulnerable to a reduced standard of living when risks…

As I have attempted to summarize the key messages and themes that have underscored my writing and research, I find that the following eight guidelines serve as a manifesto for my approach to retirement income planning. It is helpful to start with…