Archive | Larry Frank’s Research Applied

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 […]

Continue Reading · 3
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 […]

Continue Reading · 1
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 […]

Continue Reading · 7
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 […]

Continue Reading · 0
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 […]

Continue Reading · 1
storm surge

Is ALL of your portfolio at risk of loss?

Is all of your portfolio at risk of loss during a down market? It shouldn’t be if it is properly diversifiedª. Let me explain using ocean waves to represent a portfolio. You see a properly diversified portfolio would mean that ALL of your stocks and ALL of your bonds have simultaneously gone to zero value! […]

Continue Reading · 9
cash flow sequence risk

Setting Retirement Income & Spending More in Retirement @AdviceIQ

How much can you spend in retirement? How might you get more comfortable with uncertainty in retirement? Two age-old questions that should be given more attention than most people do. The first article below answers the first question above. The second article below answers the second question above. Rather than go into detail here – please […]

Continue Reading · 1
AFS

How income may compare between Dynamic and Safe approaches

I recently attended an academic research conference for the Academy of Financial Services (AFS). I had the great pleasure of visiting with Wade Pfau, David Blanchett, Michael Kitces and Joe Tomlinson as well as the attending academics from the various universities across the country researching many aspects of personal financial planning. This article will discuss a few observations I made from […]

Continue Reading · 4
Linear_Regression_-_it_svg

When to adjust retirement income? Sooner? Or later?

Market cycles make predictions hard for those who like to make such predictions. I believe predictions are impossible, especially over the rest of your life when it comes to retirement. This doesn’t mean we all throw up our hands though. It means taking a measure of what is prudent based on facts as we know […]

Continue Reading · 1
withdrawal rates and POF

How to Use “Dynamic Updating” to Determine a Prudent Retirement Income Based on Age

This article is a brief summary of how all of our * research papers tie together to modernize the retirement income measurement from your investments. In other words, how to determine a prudent amount of retirement income. Advisers generally annually update plans with their clients. An important part of this update process is capturing new […]

Continue Reading · 1
https://www.googletagmanager.com/gtag/js?id=G-NBSYGWXDXE