Htown Harry
Thinks s/he gets paid by the post
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- May 13, 2007
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This short article is built around a chart that makes good sense and illustrates concepts discussed here many times.
Picturing your retirement plan - MarketWatch
The author, a financial planner, links to her longer piece in the JFP:
Financial Planning: A Look from the Outside In
Picturing your retirement plan - MarketWatch
The author, a financial planner, links to her longer piece in the JFP:
Financial Planning: A Look from the Outside In
The ideas represented by this diagram have been rigorously developed and vetted in the economic literature for many decades. Plus, most consumers nod their head and are not surprised when they see this picture. Yet you probably have not seen it before or been keenly aware of the planning ideas it illustrates...
Much of our industry is still operating from a different planning paradigm, one that draws mainly from the pension world. Much of what you read and hear rests on the notion that retirement planning is mainly about building the biggest portfolio possible and then hoping an assumed withdrawal rate will keep you safe.
The diagram in this post summarizes a different point of view, one that addresses your actual planning challenges — and matches your gut instincts about how the financial world really works.
In the academic world, it is referenced as the theory of life cycle savings and investing. In the real world, it works!