The Investments Channel

The Four Horsemen of the Retirement Apocalypse

In biblical tradition, the four horsemen of the apocalypse are a quartet of immensely powerful entities personifying the four prime concepts – war, famine, pestilence and death – that drive the apocalypse. For today’s investors, the equivalent is historically high equity valuations, historically low bond yields, increasing longevity and, as a result, the increasing need for what can be very expensive long-term care.

How to Rescue an Underfunded Retirement

Americans have under-saved and will need more than withdrawals from savings to survive retirement. An optimal withdrawal strategy and asset allocation, delaying Social Security, annuitizing, tapping home equity and possibly working longer need to be evaluated. Let’s take a typical American couple and evaluate which options improve retirement consumption.

Weighing the Week Ahead: Will Inflation Data Spark Another Leg Down?

The economic calendar is heavy. In the battle of competing explanations for the market declines, the inflation story has taken center stage. With both PPI and CPI scheduled for release this week, I expect many to be asking: Will rising inflation spark another leg down for bonds and stocks?

The Best Strategy for Retiring Without Adequate Savings

Most research on retirement strategies assumes that people have saved adequately. But data on household savings shows that many households fall short, and will need to call on relatives or other sources for support. This raises questions about the best withdrawal or annuity strategies when savings are insufficient. It turns out that which strategy works best is different than for adequately funded retirements.

Wade Pfau’s Important Book on Retirement Planning

Wade Pfau has written an important book: How Much Can I Spend in Retirement?: A Guide to Investment-Based Retirement Income Strategies. It should be read by not just financial planners, but also all investment advisors who work with individual accounts.

Insurance & Annuities Poll: The Results

Annual Beneficiary Audits: As Important as a Will

Many investors assume a will dictates where their assets will go. But without properly designated beneficiaries, investors may not reach their legacy goals.

Retirement Income Planning Takes a Flexible Approach

If you are like many people, you probably have put plenty of thought into what your ideal retirement would look like. Maybe it involves exotic travel, pursuing a favorite hobby or spending more time with friends and family.

What’s Behind the Anti-Fiduciary Mindset?

In case you missed it, on September 7, APViewpoint hosted one of the best debates ever regarding the fiduciary standard and the DOL rule. It was notable because unlike most of what you’ve been reading, it covered both sides of the topic, and the debaters forced each other to provide deeper rationales for their beliefs. Here are my key insights, particularly those that illustrate the thinking behind the anti-fiduciary mindset.

Coping with Sequence Risk: How Variable Withdrawal and Annuitization Improve Retirement Outcomes

A strategy that combines variable withdrawals with partial annuitization using a single-premium immediate annuity maximizes the cash available for consumption.

Income Opportunities in CEFs and Emerging Markets

Closed-end funds and emerging-market debt offer opportunities for income investors. We also look at Vanguard’s most recent announcement about its bond ETF and what to expect from the FOMC this month.

Masters Series Interview with Richard H. Thaler, PhD

Richard Thaler, PhD, is considered one of the founding fathers of behavioral economics, the nexus of economics and psychology—specifically how people and organizations make decisions that may have negative consequences and how they frequently repeat these mistakes. 

The Five Points that Belong on Every Advisor’s Website

Shouldn’t clients be able to look on a financial planner’s website and see what services they can expect to receive for the fees they expect to pay? Shouldn’t the profession evolve a pricing model where people who do more for the client can charge more, and those who do less will charge less?

The Impact of Dynamic Approaches on Optimal Retirement Income Strategies

Researchers often assume that retirees make decisions only at or just before retirement. But retirees and their financial advisors can dynamically adjust strategies over time. Doing so improves the likelihood of financial success in retirement.

This presentation will explore:

•Why dynamic models result in higher retirement-spending rates
•Which withdrawal approaches work best
•Why annuities are less important in a dynamic framework
•How to make optimal portfolio allocations

What Advisors Need to Know About Annuity Mortality Credits

Although the general concept of mortality credits is widely understood, the underlying math is not. Understanding the math can help with decisions such as the best age to purchase an annuity and which type of annuity to purchase. Such an understanding can debunk some popular beliefs about annuities.