Core Resources on Retirement Planning

Note: Regarding article links, many research journals require a subscription to access the published article. In these cases, I provide links to pre-publication working paper versions. 

Retirement Income Frameworks

“The Yin and Yang of Retirement Income Philosophies” A Whitepaper for Challenger (Australia). (with Jeremy Cooper)

“An Efficient Frontier for Retirement Income.” Journal of Financial Planning (February 2013)

“The Next Evolution in Defined Contribution Retirement Plan Design” A paper for the Stanford Center for Longevity and Society of Actuaries (with Steve Vernon)

“Why Retirees Should Choose DIAs over SPIAs” Advisor Perspectives

“Choosing a Retirement Income Strategy (Part 2): A New Evaluation Framework.” Retirement Management Journal (Fall 2012)

“Choosing a Retirement Income Strategy (Part 1): Outcome Measures and Best Practices.” Retirement Management Journal (Fall 2012)

“Spending Flexibility and Safe Withdrawal Rates.” (with Michael Finke and Duncan Williams) Journal of Financial Planning (March 2012)

“Rethinking Safe Withdrawal Rates: The Meaning of Failure” Advisor Perspectives

Safe Savings Rates

“Safe Savings Rates: A New Approach to Retirement Planning over the Lifecycle.” Journal of Financial Planning (May 2011)

“Getting on Track for a Sustainable Retirement: A Reality Check on Savings and Work.” Journal of Financial Planning (October 2011)

Systematic Withdrawal Strategies

“Does International Diversification Improve Safe Withdrawal Rates.” Advisor Perspectives

“How Much Can Clients Spend in Retirement? A Test of the Two Most Prominent Approaches” Advisor Perspectives

“New Research on How Much Clients Can Spend in Retirement” Advisor Perspectives

“Asset Valuations and Safe Portfolio Withdrawal Rates.” Retirement Management Journal (Fall 2013) (with David Blanchett and Michael Finke)

“The 4% Rule is Not Safe in a Low-Yield World.” Journal of Financial Planning (June 2013) (with David Blanchett and Michael Finke)

“Capital Market Expectations, Asset Allocation, and Safe Withdrawal Rates.” Journal of Financial Planning (January 2012)

“An International Perspective on Safe Withdrawal Rates from Retirement Savings: The Demise of the 4 Percent Rule?” Journal of Financial Planning (December 2010)
“How Do Spending Needs Evolve During Retirement?” Advisor Perspectives

Bond Ladders

“How to Use Bond Ladders in Retirement Portfolios” Advisor Perspectives

Income Annuities

“The Power of Deferred Annuitization” A Northwestern Mutual Whitepaper (with Michael Finke) Coming Soon

“Lifetime Expected Income Breakeven Comparison between SPIAs and Managed Portfolios.” Journal of Financial Planning (April 2014) (with Larry Frank and John Mitchell)

“The True Impact of Annuities on Retirement Sustainability: A Total Wealth Perspective.” Retirement Management Journal (Fall 2013) (with Michael Kitces)

“Your Clients’ Toughest Retirement Decision: The Debate Between Systematic Withdrawals and Immediate Annuities” Advisor Perspectives

Other Types of Annuities and Income Guarantees

“A New Approach to Retirement Income: Next-Gen vs. Traditional VAs.” A Whitepaper for Jefferson National

“Analyzing an Income Guarantee Rider in a Retirement Portfolio.” Journal of Retirement (Summer 2013)

“GLWBs: Retiree Protection or Money Illusion?” Advisor Perspectives

“Mitigating the Four Major Risks of Sustainable Inflation-Adjusted Retirement Income Whitepaper” A Whitepaper for the Annexus Research Institute (with Rex Voegtlin)

Reverse Mortgages

“The Hidden Value of a Reverse Mortgage Standby Line of Credit” Advisor Perspectives

Retirement Risks

“The Lifetime Sequence of Returns: A Retirement Planning Conundrum” Journal of Financial Service Professionals (January 2014)

“New Research on How to Choose Portfolio Return Assumptions.” Advisor Perspectives

Dynamic Asset Allocation

“Long-Term Investors and Valuation-Based Asset Allocation.” Applied Financial Economics (August 2012)

“Safe Withdrawal Rates, Savings Rates, and Valuation-Based Asset Allocation.” Journal of Financial Planning (April 2012)

“Retirement Risk, Rising Equity Glidepaths, and Valuation-Based Asset Allocation.” Journal of Financial Planning (forthcoming, 2015) (with Michael Kitces)

“Reducing Retirement Risk with a Rising Equity Glidepath.” Journal of Financial Planning (January 2014) (with Michael Kitces)

“The Pros and Cons of  Target Date Funds in the Accumulation Phase.” Advisor Perspectives

“Optimal Portfolios for the Long Run.” (with David Blanchett and Michael Finke)

“The Portfolio Size Effect and Lifecycle Asset Allocation Funds: A Different Perspective.” Journal of Portfolio Management (Spring 2011)

Core Resources on Retirement Planning

stock

Are You a Stock or a Bond?

By Moshe Milevsky

Audience: Households

Sophistication: Low

Explains personal finance, including the working and retirement phases of life. It’s an engaging explanation about how academics view the lifetime financial planning problem.

retirement-portfolios

Retirement Portfolios

By Michael Zwecher

Audience: Advisors

Sophistication: High

Provides a detailed framework for retirement income now known as “investment-based flooring.” See the author’s “One Whack at the Cat” guest post for an example of his style and approach.

someday-rich

Someday Rich: Planning for Sustainable Tomorrows Today

By Timothy Noonan and Matt Smith

Audience: Advisors

Sophistication: Medium

Includes many details on retirement income planning from the Russell Investments perspective, including a great explanation of funded ratio management.

conserving

Conserving Client Portfolios During Retirement

By William Bengen

Audience: Advisors

Sophistication: Medium

The best example of a book written from a probability-based perspective, this book provides a detailed analysis of systematic withdrawal strategies from volatile investment portfolios as based on U.S. historical data. The author created “the 4% rule.”

asset

Asset Dedication

By Stephen Huxley and J. Brent Burns

Audience: Advisors/Households

Sophistication: Medium

Explains their approach of using dedicated income (primarily, holding individual bonds to maturity) to precisely match spending goals in early retirement, and then using growth investments to cover long-term needs. (It’s a compromise between probability-based and safety-first.)

bigretirementrisk

The Big Retirement Risk

By Erin Botsford

Audience: Households

Sophistication: Low

Explains the safety-first school of thought on retirement income, which she calls Lifestyle Driven Investing. She describes an approach which is very different from “the 4% rule.”


Retirement Income Redesigned book cover

Retirement Income Redesigned

By Harold Evensky, Deena B. Katz, and Walter Updegrave

Audience: Advisors

Sophistication: Medium/High

Brings together key figures in the field of retirement income to summarize their areas of expertise. Topics include retirement risks, systematic withdrawals, annuities, and reverse mortgages.

pensionize

Pensionize Your Nestegg

By Moshe Milevsky and Alexandra Macqueen

Audience: Households

Sophistication: Low

The simple message is: in order to have a more comfortable retirement with less worries about money matters, it is important for retirees to “pensionize” (with contractual guarantees) at least part of their nest eggs.

7rules

The 7 Most Important Equations for Your Retirement

By Moshe Milevsky

Audience: Households

Sophistication: Low

Writes in an entertaining and engaging manner about the historical figures and circumstances behind seven key mathematical ideas for retirement income planning.

agesofinvestor

The Ages of the Investor

By William Bernstein

Audience: Households

Sophistication: Medium

Describes the goals-based approach to secure lifestyle needs and minimize risk with two separate portfolios: a “liability matching portfolio” structured to support desired lifestyle spending, and a “risk portfolio” with any remaining assets which can be used for luxuries and bequests.

deep-risk

Deep Risk: How History Informs Portfolio Design

By William Bernstein

Audience: Households

Sophistication: Medium

Distinguishes between deep risk (permanent loss of capital) and shallow risk (market volatility) for lifetime financial planning. The sources of deep risk (besides buying high and selling low) are: prolonged inflation, prolonged deflation, confiscation, and devastation.

calculus

Calculus of Retirement Income

By Moshe Milevsky

Audience: Academics

Sophistication: High

This is Moshe Milevsky’s most technical book, providing mathematical explanations of key issues for retirement income from the fields of actuarial science and financial economics.


Risk Less and Prosper book cover

Risk Less and Prosper

By Zvi Bodie & Rachelle Taqqu

Audience: Households

Sophistication: Low

Written from the safety-first perspective, with a special emphasis on just how risky the stock market can be for household investors.

personal-life-cycle

Personal Life-Cycle Economics

By Aaron Stevens

Audience: Anyone

Sophistication: Medium

A college textbook about lifetime financial planning from the academic perspective of lifecycle finance. Financial decisions are evaluated based on their impact on a household’s lifetime sustainable standard of living.

moneyforlife

Money for Life

By Steve Vernon

Audience: Households

Sophistication: Low

Provides a general overview and explanation about different retirement income tools.

life-annuities

Life Annuities: An Optimal Product for Retirement Income

By Moshe Milevsky

Audience: Advisors

Sophistication: Medium

Lays out the academic case for using life annuities (which I usually call income annuities – SPIAs & DIAs) as part of a retirement plan.

advisors-guide

The Advisor’s Guide to Annuities

By John Olsen and Michael Kitces

Audience: Advisors

Sophistication: High

Detailed examination of many types (fixed, variable, indexed) and features (taxation, costs, income, estate planning) of annuities.

annuities-for-dummies

Annuities for Dummies

By Kerry Pechter

Audience: Households

Sophistication: Low

A comprehensive account of annuities which will be more accessible to readers.