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Kitces: Phrases That Should Be Banished From Retirement Planning
10-22-2014, 05:49 AM
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#1
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Thinks s/he gets paid by the post
Join Date: May 2007
Posts: 1,525
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Kitces: Phrases That Should Be Banished From Retirement Planning
Michael Kitces has posted an interesting essay that examines some of the common phrases used in retirement planning. The concepts he discusses are frequent subjects here on E-R.org.
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As the research into behavioral finance has shown, the words we use and how concepts are framed can have a powerful impact on how we see the world and consider the opportunities that may lie before us. A strategy can go from being appealing to terrifying based solely on how it’s explained. And in the context of retirement, there are a lot of words and phrases that may unintentionally be hampering our efforts to have a productive planning conversation.
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He proposes the following substitutions:
probability of failure probability of adjustment
probability of success probability of excess
retirement income retirement cash flows
retirement financial independence
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...reframing retirement as financial independence goes beyond just what one will do in that “retirement” phase; it also changes the context of the retirement goal, where the target instead is simply to reach that point of financial independence, and to recognize that the accumulation of assets is just part of the transition of replacing income-from-work with cash-flows-from-assets instead. The approach allows for a much more productive transition into “partial retirement” as well; after all, for many people, their “financial independence” job might actually still be a job that does generate some income, which means the transition point to “financial independence” may be far closer than what it takes to “fully retire” instead.
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Financial Independence In Lieu Of Retirement, And Other Phrases That Should Be Banished From Retirement Planning | Kitces.com
What words would you banish from retirement planning discussions? Why?
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No doubt a continuous prosperity, though spendthrift, is preferable to an economy thriftily moral, though lean. Nevertheless, that prosperity would seem more soundly shored if, by a saving grace, more of us had the grace to save.
Life Magazine editorial, 1956
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Kitces: Phrases That Should Be Banished From Retirement Planning
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10-22-2014, 08:08 AM
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#2
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Thinks s/he gets paid by the post
Join Date: Mar 2012
Posts: 1,555
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Kitces: Phrases That Should Be Banished From Retirement Planning
I'd forbid FAs from saying, "oh, YOU don't pay me - the company pays my fee..."
Yea. Right.
Sent from my iPad using Early Retirement Forum
__________________
"Growing old is no excuse for growing up."
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10-22-2014, 09:44 AM
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#3
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jul 2006
Posts: 11,401
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"Safe investment". It's an oxymoron.
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10-22-2014, 09:50 AM
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#4
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Thinks s/he gets paid by the post
Join Date: Mar 2009
Posts: 2,985
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Call it what you want the facts remain the same. LBYM, save and invest and you'll be OK.
I guess new buzz phases are what keeps these guys in the news.
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Took SS at 62 and hope I live long enough to regret the decision.
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10-22-2014, 10:01 AM
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#5
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Full time employment: Posting here.
Join Date: Aug 2014
Posts: 584
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I must admit to being irked by the new Voya TV ad. They are going to help me "think different about money". Really only difference is they changed their name. Stupid marketing! Yeah you got me to go to your web site but all you did was waste my time and piss me off.
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10-22-2014, 10:13 AM
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#6
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 17,263
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Quote:
Originally Posted by ArkTinkerer
I must admit to being irked by the new Voya TV ad. They are going to help me "think different about money". Really only difference is they changed their name. Stupid marketing! Yeah you got me to go to your web site but all you did was waste my time and piss me off.
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Personally, I think differently every time I see one of these ads.
__________________
Comparison is the thief of joy
The worst decisions are usually made in times of anger and impatience.
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10-22-2014, 10:15 AM
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#7
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Full time employment: Posting here.
Join Date: Aug 2014
Posts: 584
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Your English teacher would be proud of you...
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10-22-2014, 11:46 AM
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#8
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Thinks s/he gets paid by the post
Join Date: Feb 2012
Posts: 1,495
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Wealth management? Pffft.
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10-22-2014, 02:08 PM
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#9
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Moderator
Join Date: Jul 2010
Posts: 7,941
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Good article. I agree that the words we use are important because of the images they bring up - especially words such as "failure".
I would eliminate "free dinner".
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"One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute." William Feather
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ER'd Oct. 2010 at 53. Life is good.
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10-22-2014, 02:14 PM
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#10
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Thinks s/he gets paid by the post
Join Date: Nov 2012
Location: Madeira Beach Fl
Posts: 1,403
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I never understood where "cut the mustard" came from, as in "that investment really cuts the mustard". Maybe it is being mistaken for "passes muster"?
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_______________________________________________
"A man is a success if he gets up in the morning and goes to bed at night and in between does what he wants to do" --Bob Dylan.
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10-22-2014, 02:50 PM
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#11
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Thinks s/he gets paid by the post
Join Date: Jun 2010
Posts: 2,139
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Quote:
Originally Posted by heeyy_joe
I never understood where "cut the mustard" came from, as in "that investment really cuts the mustard". Maybe it is being mistaken for "passes muster"?
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According to phrases.org.uk
Cut The Mustard -
There has been an association between the heat and piquancy of mustard and the zest and energy of people's behaviour. This dates back to at least 1672, when the term 'as keen as mustard' is first recorded. 'Up to mustard' or just 'mustard' means up to standard in the same way as 'up to snuff'. 'Cutting' has also long been used to mean 'exhibiting', as in the phrase 'cutting a fine figure'. Unless some actual evidence is found for the other proposed explanations, the derivation of 'cutting the mustard' as an alternative way of saying 'exhibiting one's high standards' is by far the most likely.
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And whatever your labors and aspirations in the noisy confusion of life, keep peace in your soul. With all its sham, drudgery, and broken dreams, it is still a beautiful world. Be cheerful. Strive to be happy.- Desiderata by Max Ehrmann
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10-22-2014, 03:00 PM
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#12
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Moderator
Join Date: Feb 2010
Location: Flyover country
Posts: 25,356
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Quote:
Originally Posted by Htown Harry
What words would you banish from retirement planning discussions? Why?
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"This time it's different."
"This approach has been thoroughly backtested and has worked every time."
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10-22-2014, 03:01 PM
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#13
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Full time employment: Posting here.
Join Date: Feb 2014
Posts: 731
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For retirement planning, why wouldn't one want to keep the phrase "probability of failure" - that SHOULD cause pause and fear for a poor plan.
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10-22-2014, 03:02 PM
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#14
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jan 2007
Location: New Orleans
Posts: 47,500
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Quote:
Originally Posted by ArkTinkerer
Your English teacher would be proud of you...
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I would agree with him/her. If we don't defend proper English to the best of our abilities, the adverb could disappear before long. I am not a role model when it comes to good English, but I do like adverbs. 
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
Happily retired since 2009, at age 61. Best years of my life by far!
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10-22-2014, 03:04 PM
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#15
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Thinks s/he gets paid by the post
Join Date: Jun 2010
Posts: 2,301
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Quote:
Originally Posted by BBQ-Nut
For retirement planning, why wouldn't one want to keep the phrase "probability of failure" - that SHOULD cause pause and fear for a poor plan.
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Probably because he has to spend time educating his clients on what exactly failure and success mean whereas everybody makes adjustments (no explanation needed).
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10-22-2014, 03:24 PM
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#16
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Dec 2007
Location: Denver, Colorado
Posts: 6,258
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Quote:
Originally Posted by braumeister
"This time it's different."
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So it is this time? I knew they were wrong.
__________________
"It's tough to make predictions, especially when it involves the future." ~Attributed to many
"In theory, there is no difference between theory and practice. But, in practice, there is." ~(perhaps by) Yogi Berra
"Those who have knowledge, don't predict. Those who predict, don't have knowledge."~ Lau tzu
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10-22-2014, 03:37 PM
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#17
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Thinks s/he gets paid by the post
Join Date: Nov 2008
Posts: 3,408
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Quote:
Originally Posted by heeyy_joe
I never understood where "cut the mustard" came from, as in "that investment really cuts the mustard". Maybe it is being mistaken for "passes muster"?
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Makes me smile when on a cruise ship going to the lifeboat drill and people are wondering why we are having a mustard drill. 
Cheers!
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