Archive | Larry Frank’s Research Applied

You’d never guess what factor is most important for retirement income!

You’d never guess what factor is most important for retirement income!

What is the most sensitive factor in the computation of retirement income? Time! It is the one input that is largely ignored. Time … or better said, aging …  has succumbed through the common use of a fixed age such as 95 or 100. You may click on the graph to enlarge it (hold shift key […]

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Model

Just where does the fear of outliving our money come from? Part II.

The foundation to answer where does fear of outliving money come from was laid in yesterdays’ post (Part I). Why is all of this important? The fear of outliving your money also (there’s another reason listed below) comes from behaviors of the present self not considering the impact of present actions on your future self. Chile’s […]

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nov2016jfp_webcvr

Just where does the fear of outliving our money come from? Part I

You see the headline all the time that has something to do with basically these four words: Risk, Outliving, Longevity and Money. The viewpoint that you may outlive your money because of increasing longevity (people are living longer) is based on a faulty assumption! That assumption is built into calculations the profession uses when estimating retirement […]

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1 C Retirement Distribution Process

A Simple Retirement Income Process

Working or retired, the focus of most people is keeping their check book full of money for the monthly expenses they have. While working, the source of the money is obvious … it is from you working. While retired, the source of the money is less obvious … it is from your money working. So […]

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02014_Syrena_automobile

How Should You Buy a Car in Retirement?

You are retired and need to replace your car. How do you do that? Buy it with cash? Or get a loan? The answer is not a simple as one might think – it depends on how old you are and how expensive the loan and/or car are. This question refers to those who are […]

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Standard_deviation_diagram-300x212

What returns give, volatility takes away.

Many people focus on just returns, thinking that the higher the return the better their results. The consequences of such a focus while saving money are not felt as much (buying low) as they are once retired (selling low) and trying to manage the pot of money to give income for the rest of one’s life. Let’s take […]

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Outliving older ages

You Should Expect to Get Older, as You Get Older

Most people think of retirement planning as determining how much money they need to save up in order to spend it over a fixed, or set predetermined, number of years in retirement. This is wrong! The number of years one may have in retirement is not fixed! So the profession works around the dilemma of uncertain […]

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Two views of retirement

Summary: Two schools of thought on retirement income.

Retirement income management boils down to basically two schools of thought … Probability Based School and the Safety First School. Wade Pfau has a summary on his blog, and I’ve written on the comparisons as well. Wade is an advocate of the Safety First School in general while I’m an advocate of the Probability Based […]

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waves approach beach1

Why Volatility Isn’t So Bad @AdviceIQ

Nervous retirees often worry that they might lose everything in a volatile market. Yes, if you only own one stock, you could lose it all. But if your portfolio is diversified, the majority of it remains stable like the water beneath the waves. Below the wave height line, much of the water is undisturbed. Lots […]

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rebalancing

Rebalancing benefits during retirement. Is that all?

Michael Kitces wrote an interesting article comparing “Decision Rules” vs. Rebalancing. He finds that rebalancing under a total return approach has essentially the same results using the “Safe Withdrawal Rate” (SWR) decision rules. I posted a blog a short time ago that compares the SWR approach to a Dynamic Updating approach. I have always maintained […]

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