Category: Retirement

This follow-up article keeps exploring Time Value of Money concepts in the context of early retirement. The intent is to find a flexible way to manage one’s portfolio savings and annual spending levels in combination with various types of irregular cash flows while waiting for stable fixed income (e.g. social security, pension) to settle in.
As we have seen in Part 1, a few spreadsheet formulas can go a long way. Such ‘annuitization’ approach involves some extra risks though and this follow-up article will discuss ways to mitigate such risks.

This article will explore Time Value of Money concepts in the context of early retirement. The intent is to find a flexible way to manage one’s portfolio savings and annual spending levels in combination with various types of irregular cash flows while waiting for stable fixed income (e.g. social security, pension) to settle in. As we will see, a few spreadsheet formulas can go a long way.

A previous blog article explored income-centric risk and reward definitions, more suitable to retirement than the usual academic definitions. Corresponding quantitative analysis of some simple US portfolios was provided.
This article extends this investigation by taking the perspective of investors located in various developed countries (a form of ‘out of sample’ testing).

Financial literature from academics has been strongly influenced by the ground-breaking work of Harry Markowitz and William Sharpe, and the concept of risk & reward for a multi-asset portfolio. Although brilliantly innovative, this work is often misused, equating risk with (portfolio) volatility and reward with (portfolio) returns, and applying such principles without acknowledging the fundamental differences between investors and speculators, or accumulators and retirees.
This article will explore risk and reward from a perspective more suitable to retirement, and perform corresponding quantitative analysis of some simple portfolios.

Michael Kitces wrote an intriguing article in 2008, which notably quantified the (empirical) relationship between the Cyclically Adjusted PE ratio (aka CAPE) and safe withdrawal rates (SWR) of subsequent retirement cycles. This blog article extends this study, adding ten more years of data (i.e. up to 2017), and then ponders about the practical applicability of such findings.

This article is a follow-up to the “short study of the recent Japanese crisis” which was published on this blog a few days ago. The study was actively discussed on the Bogleheads forum. Various interesting questions were raised that weren’t directly addressed by the original write-up, and triggered the author to do more research about domestic tilts (or lack thereof), variable withdrawals, and past performance of the stock market in Japan.

This is a guest post from Bogleheads® forum member Bobcat2. Definition Funded ratio – The ratio of a pension plan’s assets to its liabilities. A funded ratio above 1.0 indicates that the pension plan is able to cover all payments it …

Monitoring Your Retirement Goal – the Funded Ratio Read More »

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The U.S. Department of Labor has issued  its Conflicts of Interest Proposed Rule, a proposal which seeks to establish a fiduciary standard for investment professionals rendering advice to retirement savers. The proposed regulation was published in the Federal Register on …

U.S Department of Labor proposes new fiduciary standard for retirement savings Read More »

Note: A Treasury press release from July 2017 set out the reasons for why the myRA program is ending. As noted in that statement, “The U.S. Department of the Treasury today announced that it will begin to wind down the …

The myRA Read More »

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If you inherit an IRA (traditional or Roth) account there a number of guidelines and  key deadlines that you should be aware of.  Sound decisions can maximize the value of the account, both for yourself and for your beneficiaries. We …

Inheriting an IRA if you are not a spouse Read More »

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