Should You Keep International Stocks in Your Portfolio?
There will always be some asset class that does poorly. Over the last few years, one of those asset classes has been international stocks. They have underperformed US stocks each of the previous three years, and it’s looking like they’ll do it again this year. Given this underperformance, we’ve had some people ask why we […]
How 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.
Three 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.
What Type Of Retirement Spender Will You Be?
In August 2015, J.P. Morgan Asset Management released a study about retirement spending by Katherine Roy and Sharon Carson. In analyzing the expenditures for their diverse consumer base, they identified four retirement spending profiles and an additional category of miscellaneous individuals.
What Is Age Banding And What Does It Mean For Retirees?
Another important contribution in the area of retirement spending patterns is Somnath Basu’s 2005 article “Age Banding: A Model for Planning Retirement Needs.” Though it provided a comprehensive retirement planning framework, I want to focus specifically on the findings that covered post-retirement spending patterns.
Retirement Spending Increases And Decreases Over Time
An important simplifying assumption in William Bengen’s research is that retirees spend constant inflation-adjusted amounts throughout retirement. This may be at odds with the spending patterns of many retirees.
What If Retirees Don’t Want To Run Out Of Money In 30 Years?
Traditional safe withdrawal rate literature regularly makes the assumption that retirees will choose a withdrawal rate that will leave precisely no wealth after the final withdrawal in the thirtieth year of retirement. This can leave them playing a game of chicken as their wealth plummets toward zero.
Should You Lower Your Distributions If Your Portfolio Underperforms The Stock Market?
Another optimistic assumption of classic safe withdrawal rate studies is that retirees are able to earn precisely the underlying index returns net of the risks. But three truths dispute that idea.
Should Your Portfolio Include Commodities?
When it comes to investing, a whole bunch of magical investment solutions seem to be floating around out there, but should you really do anything differently?
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.
