Longevity Risk
RIO (Part 1): What Are the 4 Ls of Retirement Income Planning?
Last year, my colleague Alex Murguia and I spent considerable time developing and testing a Retirement Income Optimization (RIO) Map™ for commercial use at McLean Asset Management, where I serve as the Director of Retirement Research. In this series, we will outline the importance of a retirement income framework, how you can implement your own,…
Read MoreWhich Are You More Worried About: Running Out Of Money While You’re Alive Or Dying?
As David Blanchett says: failure is really only failure if wealth is depleted while you are still alive, not just over an arbitrarily long time period.
Read MoreHow Much You Should Spend In Retirement Depends On How Long You Think You’ll Live
In regards to my last column, I find it helps to visualize the data, and Exhibit 1 shows the specific spending rates for a variety of asset allocations and retirement lengths. It also shows the withdrawal rates implied by the required minimum distribution (RMD) rates set by the IRS for tax-deferred retirement accounts.
Read MoreShould You Plan On Your Retirement Lasting 30 Years Or 40?
The 4% rule has a planning horizon of thirty years. But is that a long enough horizon?
Read MoreHow Long Can Retirees Expect To Live Once They Hit 65?
Life expectancy is tricky. Average life expectancy at birth is 71 years, but it’s constantly changing depending on your age and myriad other factors.
Read MoreThree Questions To Evaluate Longevity Risk For Retirees
Longevity risk—the risk of running out of assets before running out of time—is fundamental to retirement. We know about the distribution of longevity for the overall population, but an individual cannot know in advance precisely where he or she will fall in the distribution.
Read MoreWhich Is Better for Retirement Income: Insurance or Investments?
As I mentioned last time, 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.
Read MoreJustifying a Delayed Claiming Age for Social Security
With an understanding about how benefits are calculated, the important question to consider becomes how to develop a Social Security claiming strategy. When should you apply for benefits?
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