Much has been written about determining safe withdrawal rates. From Bengen’s early studies to later ones from Evansky, Guyton(pdf) to Kitces. Unfortunately, each one has a number of glaring weaknesses. What if you are significantly older or younger than these studies used?  In other words what if your planning horizon isn’t 30 or 35 years? [...]

It is pretty amazing the spread is so large among developed nations.  As countries get into more debt I wonder whether the countries at the bottom of the list will be forced to migrate their average retirement ages significantly upward.

Defined benefit pensions are a dying breed.  While they are still common in federal and state government jobs, they are quickly disappearing in commercial companies.  So if a person wanted to create their own pension how much would that cost? Let’s take a quick look at the Federal Employees Retirement System (FERS). With 20 years [...]

When a company offers a defined benefit pension (i.e., one of those pensions whose benefits is based on years of service and ending salary), it has to pay an insurance premium each year to the Pension Benefit Guarantee Corporation (PBGC), a federal corporation formed under ERISA.  The PBGC steps in to continue pension payments in [...]

What if you have discovered that your risk tolerance is virtually non existant?  Here is a strategy that reduces risks to their bare minimum.  The next article will address those who are willing to take more risk. Investment Choice I am assuming that zero risk tolerance means only CD’s under FDIC limits, immediate/fixed annuities under [...]

I believe these will eventually become standard fare for retirees.  Unfortunately it is going to take a while for the field to settle down and figure out exactly how these should be configured.  I currently like Vanguard’s funds the best with the following caveats. Their distributions are too high.  The 7% should be 5% and [...]

Jim Miller provides an overview of longevity insurance.  It is basically an immediate annuity that doesn’t start paying until around age 85. These products are still new so I’m not confident that pricing has stabilized yet (i.e., enough competition to ensure you are getting your money’s worth).  The other issue is that they are not inflation [...]

Scot Burns addresses a recent study (pdf) which estimates that 84.4% of people are saving enough for retirement. You can skip over the math. The text has all kinds of fascinating statistics like whether peoples perception of their longevity affects their savings (no), or whether their desire to leave a bequest affects their savings (yes).

Natalie gives a great primer on 72(t) payments.  The one piece she didn’t cover was the ability for a person using the amortization or annuity method to step down their withdrawals to the RMD method (although you can’t go back once you make the change).

A recent paper looked at how earnings (e.g., salary level), investment acumen, or propensity to save contributed toward retirement readiness. The abstract states: “very little of this dispersion can be explained by chance differences in individual circumstances largely outside the control of individuals’….investment choice is not a major determinant of the dispersion in asset accumulation…conclude [...]