nun
Thinks s/he gets paid by the post
- Joined
- Feb 17, 2006
- Messages
- 4,872
The more I read about retirement planning, the more it just seems like common sense......I've been doing the “guaranteed floor / upside potential” thing all my working life. Since when is it a novel idea?
Retirement Researcher Blog: Safe Withdrawal Rates: Have I been barking up the wrong tree?
Also why is everyone so amazed when a planner suggests modifying a withdrawal rate according to portfolio performance....that' s also just common sense. Anyone going into ER without a stable foundation of income or a plan to comfortably reduce spending in the advent of a market melt down is asking for trouble.
Retirement Researcher Blog: Safe Withdrawal Rates: Have I been barking up the wrong tree?
An alternative approach to retirement income planning that is gaining traction is the “guaranteed floor / upside potential” approach. With this approach, you first build a floor of very low-risk guaranteed income sources to serve your basic spending needs in retirement. The guaranteed income floor is built with Social Security and any other defined-benefit pensions, and through the use of your financial assets to do things such as building a ladder of TIPS or purchasing single-premium immediate annuities (SPIAs). GLWBs could also play a role here. Not all of these income sources are inflation adjusted, and you do need to make sure your floor is sufficiently protected from inflation, but this is the basic idea.
Also why is everyone so amazed when a planner suggests modifying a withdrawal rate according to portfolio performance....that' s also just common sense. Anyone going into ER without a stable foundation of income or a plan to comfortably reduce spending in the advent of a market melt down is asking for trouble.