What’s the “nastiest, hardest problem in finance”? According to Nobel Prize-winning economist William Sharpe, it’s turning retirement savings into retirement spending or, as today’s article puts it, “knowing how to strike a balance between having enough income to meet your current needs (and wants, assuming you’ve saved enough) and having enough to get you through your lifetime.” What insights does Sharpe – who created a computer program that assessed 100,000 retirement-income scenarios – have on how retirees can better tackle this problem? CLICK HERE.
With most financial experts advising that primary wage earners delay taking Social Security until age 70 (as delaying can result in payments that are 70% higher), the author of today’s article acknowledges that “for those who do want to maximize their benefits, that means utilizing other assets in the meantime which requires some strategizing.” He proceeds to outline one potential strategy – the Spend Safely in Retirement Strategy – that allows you to effectively create your own annuity or pension income stream. For more, CLICK HERE.
Today’s article calls it “the nastiest hardest problem in finance”: retirement spending strategies. And unfortunately, despite the complexity inherent in retirement spending strategizing, it is often subject to simplistic rules of thumb, most notably the 4% rule. The author outlines the dangers associated with the 4% rule, how it “can go very badly”, and the implications of this for the FIRE (financial independence, retire early) movement. For more, CLICK HERE.
When it comes to retirement planning, the author of today’s article notes that “What’s been missing for most people is a simple way to calculate the level of spending that can be generated from a given savings amount, that takes into account realistic assumptions about a retiree’s longevity as well as a forecast for market returns.” However, there is a new tool available that seeks to fill that need – and it only requires two simple inputs to generate spending estimates. For more, CLICK HERE.
Leading up to retirement the goal is producing enough income to build a sizable nest egg. Upon retirement the goal shifts to spending what has been built up in such a way that you don’t outlive your nest egg. And while the general rule of thumb has been the 4% rule – that retirees could safely withdraw 4% of their assets each year – there is much debate over whether this rule is still valid today. As such, today’s article outlines several strategies that retirees can use to help ensure their nest egg lasts throughout their lifetime. To find out what these strategies are, CLICK HERE.