"Can I Retire" is the seventh easy to read and understand book by Boglehead, Mike Piper, webmaster of The Oblivious Investor. Few (if any) books contain so much sound investing advice in so few pages. These are excerpts:
"If you're unsatisfied with your purchase for any reason, let me know, and I'll be happy to provide you with a refund of the current list price of the book."
"It's likely that at retirement age, you will have more assets than you've had (or will have) at any other time in your life."
"The complexity involved with a retirement-stage portfolio is far greater than that of an accumulation-stage portfolio."
"Most investors do not need a financial advisor if they're willing to take the time to learn all the ins and outs of managing a portfolio.
"From what I've seen, most investors never actually take the step of creating a concrete plan."
"There's no viable alternative to sitting down and calculating how much income you are going to need."
"Because of the negative effects of volatility and inflation, it's important to use a starting withdrawal rate that's lower than the return you expect to earn on your portfolio."
"4% is typically thought to be the highest starting withdrawal rate that you can use for a 30-year retirement."
"Reliably earning above-market returns is extremely difficult. Attempting to do so involves taking on significant risk of underperforming the market."
"Many annuities are a raw deal for investors. That said, one specific type of annuity can be an extremely useful tool for retirement planning: The single premium immediate annuity (SPIA).
"For the most part, I'd suggest steering clear of variable annuities.
"Check the financial strength of the insurance company before purchasing an annuity."
"Know the limit for guarantee association coverage of annuities in your state."
"Study after study has shown that low-cost mutual funds tend to outperform high-cost funds."
"Because of their low-costs, broad diversification, and transparency, index funds and ETFs are excellent tools for constructing a buy and hold portfolio."
"By buying just three (total market) index funds, you could have a portfolio consisting of thousands of companies from across the globe."
"If you left your job at age 55 or older, and you plan to retire prior to age 59 1/2, you may want to postpone rolling over your 401k until you reach age 59 1/2."
"Your own risk tolerance, age at retirement, expected lifespan, ability to cut spending or return to work, and several other factors will play a role in determining your own appropriate allocation."
"The unfortunate truth about asset allocation is that nobody can say ahead of time which allocation is best."
"Rebalancing more frequently than once per year is likely to be harmful to performance."
"Volatility is not a good thing for a retirement portfolio."
"TIPS are ideal for the bond portion of a retirement portfolio because they protect against inflation."
"In order to reduce currency risk, it's probably a good idea for a U.S. retiree to keep the majority of her stock holding in U.S. stocks."
"If you're currently in a lower tax-bracket than you expect to be in later in retirement, you may be able to save money by converting your traditional IRA (or a portion of your traditional IRA) to a Roth IRA."
"The question of which account to withdraw from is largely a function of tax brackets and how you expect your future tax rate to compare to your currrent tax rate."
"Strategically planning which accounts to spend from first can reduce your overall tax burden throughout retirement."
"A financial planner who is knowledgeable about tax planning and Social Security planning has the potential to save you a great deal of money."
"Asset location is the process of determining which investments to keep in which accounts."
"From a tax standpoint, it's beneficial to tax-shelter your bonds before tax-sheltering your stocks. Why? Because stocks are already more tax-efficient than (taxable) bonds."
"Remember: With very few exceptions, even the most tax-efficient investments are better off in a tax-sheltered account than in a taxable account."
"In taxable accounts choose tax-efficient investments whenever possible."
"Higher turnover always leads to higher costs in terms of commissions and bid/ask spreads. And, if you're investing in a taxable account, higher turnover leads to higher taxes as well."
"For it to make sense to invest in municipal bonds, they must offer a higher after-tax yield than Treasury bonds of a similar maturity."
"Owning balanced funds and target date funds in a taxable account is generally not a good idea for a handful of reasons."
"In taxable accounts, if you have a large unrealized capital-gain built up in a tax-inefficient investment, it may not make sense to sell that investment in order to your your money into something more tax-efficient."
"My hope is that the books in the "100 pages or less" series can help readers achieve clarity and understanding of topics that are often considered complex and confusing."
Thank you Mike Piper
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