Talk:Replacement rate models of retirement spending

Figures
Wiki figures are not very flexible when it comes to formatting. One editing technique is to put figures inside a table. Take a look at the wikitext for the "Replacement Rate vs. Savings" figure. It looked better to have an outline and title. Images can be scaled, I set it to 350 px. There's no need to upload different resolutions (best quality is to upload at a higher resolution than you need). Feel free to change anything. Note that are comments. If this is too complicated, don't worry about it and just leave a request for someone to fix it later. --LadyGeek 17:55, 18 August 2011 (EDT)

--ThePrune 20:15, 18 August 2011 (EDT) ''LadyGeek, thanks for the mini-tutorial on inserting images. It definitely looks better now. I'll just copy and modify your wikitext in the future until I have time to study more at the Wikimedia site. The first several images I tried uploading had too low a resolution - they looked terrible in the Wiki. By the way, how do I delete these unneeded imaged from the Uploading area?''

The wiki keeps tracks of all versions. If you re-upload the same image, it shows as a new version - this is identical to editing articles. You can always undo an upload (revert to previous version). However, wiki editors cannot delete pages (or image files). This is by design and is an important part of why wikis work. Wiki administrators (like myself or blbarnitz) can take care of this for you. Is this the one: File:Replacement Rate 01.gif?

In actuality, deleted pages can be resurrected so there really is no such thing as true deletion. However, it's good to keep unwanted / incorrect content out of sight.--LadyGeek 15:23, 19 August 2011 (EDT)

Text Format
Anyone know how to modify equations in wikitext so that they look more natural. My equation
 * Gross Income (retired)   =    Gross Income (pre-retirement)   X    Replacement Rate

looks rather artificial because the spacing around the math symbols "=" and "X" is too small.--ThePrune 20:18, 18 August 2011 (EDT)

Wikitext is designed keep things simple. If we used math all the time, we could install LaTeX but with an additional complexity of understanding how to use it. See Manual:Math for what this could look like. For now, it's easier to use XML and HTML character entities.

I inserted a non-break space where needed (the wiki sometimes has a mind of its own, we need to help it occasionally) and used a proper multiplication sign.


 * Gross Income (retired)  =  Gross Income (pre-retirement)  &times;  Replacement Rate

--LadyGeek 15:23, 19 August 2011 (EDT)

Misc
--Linuxizer 02:34, 20 August 2011 (EDT) Looks great guys. I changed a few sentences, mostly for clarity. I also added a few bullet points in "Qualitative influences on desired replacement rates" and more closely aligned the public/private equivalents. These are only suggestions; feel free to change liberally.


 * Your additions were very good. Thanks for reading through the wiki. --ThePrune 15:18, 20 August 2011 (EDT)

Achievable replacement rates
I don't understand the sentence below.
 * What is the "vice-versa" rate? I can't make the connection with the example.

Some studies focus on the retirement income from just one source, for example just Social Security income or just pension income. When such studies give replacement rates, they refer only to that one source of income relative to pre-retirement gross income. To give a realistic example, it has been reported that Social Security benefits started at age 62 (in 2003) would have replaced 0.31 (31%) of the average recipient’s pre-retirement income. This rate is higher for those with lower pre-retirement income, and vice-versa, reflecting the progressive nature of Social Security's design.

--ThePrune 22:28, 25 August 2011 (EDT) ''That is a sentence that Linuxizer added; see his comments above under Misc. I think he was just trying to emphasize that the 0.31 Social Security replacement rate didn't apply to all retirees, just to the average retiree. As is generally known, for lower income retirees Social Security is purposely designed to supply a much higher replacement rate that 0.31. And VICE-VERSA, for higher income retirees Social Security will provide a lower replacement rate than 0.31.''

''If you want to delete the sentence, I have no objection. Maybe we ought to make it a footnote and rewrite for clarity?''


 * I deleted the sentence, as further clarification assumes the reader understands Social Security and would go off-topic for the article. You say average, which I think is clear. I also removed "Misc" from the section heading, as you can never find anything filed under "Misc." This section discusses properties of replacement rate (and its not discussed anywhere else). --LadyGeek 20:23, 26 August 2011 (EDT)

--ThePrune 22:46, 25 August 2011 (EDT) LadyGeek, pre-retirement really was correct. But the fact that you got confused reading the sentences is definite proof that they were in serious need of rewording. I gave it a shot. Let me know if you still find it confusing.


 * It's a little convoluted, but understandable. --LadyGeek 20:23, 26 August 2011 (EDT)

Replacement rate properties
What is meant by the "implicit" tax calculation below? I made one change, then put it back. It's not clear to me and I don't know how to fix it.

Achievable replacement rates are not affected by future changes in taxes on retirement income. This is because these replacement rates are not dependent on an implicit tax calculation. In general, this is the accepted approach. However, according to Scholz and Seshadri, the Life Cycle replacement rate model is influenced by changes in average effective tax rates.

--LadyGeek 10:37, 27 August 2011 (EDT)

Life Cycle replacement rates

 * Desired replacement rates in the GSU/Aon RETIRE study were calculated assuming an equivalent consumption lifestyle in the immediate time period before and after retirement. If the time period of equivalent consumption is broadened, the replacement rates should change.  If this time period is expanded to cover the entire working and retirement lifespan, then it becomes effectively identical to the Life Cycle approach.

Although you reference the Life Cycle paper in the above statement, there's no discussion. What is the Life Cycle approach? It's much more than simply extending the time period.

Reading further, I think you have glossed over the fact that Life Cycle Finance replacement rates are based on a totally different model. You jump from RETIRE / Aon Consulting right into Life Cycle Finance as if it was a simple extension of the same thing. That's certainly not the case. Consider explaining consumption smoothing and the other concepts as described in the paper's summary.

There are a number of forum threads discussing "Life Cycle Finance." In particular, this one: Upside Investing - A Retirement Program for the Risk-Averse. Additionally, Kotlikoff is a forum member: ESPlanner BASIC is free. Perhaps some of the discussion points could be included in the wiki.

--LadyGeek 20:25, 27 August 2011 (EDT)

Calculating after-tax income from replacement rates
I updated / reworded this section from "Spending" to "After-tax income" because, to me, spending is a rate, i.e. how many dollars per year. Income is a single total amount. This section is related to income as a total, not a spending rate. I also reworded the footnote.

--LadyGeek 21:12, 27 August 2011 (EDT)