Including a whole life policy under assets makes sense from an estate tax point of view. If the decedent owned the policy, then the proceeds are considered an estate asset. Most people with large amounts of whole life transfer ownership of such policies to an ILIT (or similar trust, possibly) to get the proceeds out of their estate.
Yes, I agree that whole life insurance policy should be under Assets, but my surprise was having such a policy at all because it's an expensive insurance product. People are usually advised to buy a term life insurance instead of universal or whole. Or do people consider buying whole life insurance once they become quite wealthy (not sure what number of millions defines wealthy in this case) just for legacy planning purposes?
An update:
I have to say that overall it's a pretty good book if you overlook annuities. Maybe Wade Pfau isn't really pushing to go for annuities, but sounds very conservative plus being a PhD in retirement research academia you cannot cheer for stocks too much. It would probably be considered irresponsible, IMO.
Even though I kind of attentively skimmed through the book, the reason I liked is that everything related to retirement preparation is right there in the book. I would say that it's so comprehensive it can be intimidating
for inexperienced (me too, btw).
It was interesting to read about SS and what goes into SS claiming decision. But overall Wade advises to use one of the SS calculators (including Mike Piper's free calculator) and decide then what to do.
It was also interesting to read about Medicare and the soup of complex flavors that goes with it. Per author, it would be best to discuss all the options with a good independent MC broker especially before starting MC. My take away on this topic is being careful when considering Advantage plan and most likely it's better to go with Medigap plan for us.
Ch.10 "Tax Planning for Efficient Retirement Distributions" is fascinating and sounds very complicated. I don't know how we'll approach our distributions yet, but it was interesting to read about various issues with tax planning in one long (50 pages) chapter.
There is also good info on legacy planning and non-financial aspects of retirement but I didn't really read them.
Overall I would say it's a good book for those on the journey to retirement, but not so much for the knowledgeable folks on this forum and who are already retired.
The author says that he's planning to update this book in a few years (I suspect when tax rates revert back to the higher brackets). If he does, I might consider buying it at that time. We're quite a few years to SS and MC, so lots of things might change until we must start planning for them.
BTW, Wade Pfau isn't aware of any good retirement calculators that he could recommend to DIY'ers but he considers doing research on them in the future. He claims that his Funded Ratio is the simplest and probably most reasonable. My problem is that I don't know what discount rate I should choose for my calculation if I wanted to explore our Funded Ratio and I don't know if his zero discount is overly conservative. I think it is but I am also not very well versed in NPV or FV to know if I'd choose the right rate either and fool myself as if we are over or under-funded.