Moshe Milevsky Discusses Tontines for the 21st Century
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Retirement Income
Morningstar Research Quantifies the Value of Financial Planning for Retirement
New retirement income research from Morningstar provides a framework for quantifying the value of effective financial planning for retirement. Morningstar’s retirement research team uses the concept of “Gamma” to refer to the extra retirement income that can be attributed to better financial planning and decisions. The researchers concluded that retirees can generate roughly 29 percent more income using a “Gamma-efficient” retirement income strategy. This 29...
Are Inflation Adjusted Annuities Worth the Cost?
Inflation protection for fixed annuities would seem to be a sensible consideration given the fact that central banks around the world are doing everything they can to reflate in the wake of an historic deleveraging.
After all, the worst possible place to be if and when inflation does kick-in is on the receiving end of nominal (not adjusted for inflation) fixed payments, and most fixed annuities fit this description perfectly.
While the inflation protection makes sense in theory, it turns-out that inflation-protected annuities may not be so sensible in practice....
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Research Highlights Fixed SPIAs
Retirement researcher Wade Pfau published a research paper titled “An Efficient Frontier for Retirement Income .” Pfau’s paper analyzes the relative merits of equities, bonds, fixed single premium immediate annuities (SPIA), inflation -adjusted SPIAs and variable annuities with guaranteed lifetime withdrawal benefits ( GLWB ). Each of these allocation options are examined in the context of achieving retirement spending goals. Pfau creates an efficient frontier for a...
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On Withdrawal Rates
In a recent Barron’s interview, Ray Dalio discusses financial deleveraging and makes an interesting point about the relationship between nominal interest rates and nominal...
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