Every financial plan, regardless of the way in which it was created, requires ongoing monitoring. Here is one way advisors can measure the “funded status” of a plan to determine if adjustments are necessary.
I will use an example and an actuarial model to compare the efficiency of three strategies for strengthening a retired or near-retired client’s balance sheet under both a lower and a higher assumed future inflation scenario.
I will outline a relatively straight-forward retirement planning process that advisors can use to help their clients find financial peace of mind in retirement and help them make better financial decisions.
Neglecting non-financial assets, such as Social Security and pensions, will misstate the risk in a retired (or near retired) client’s asset allocation strategy.
Financial advisors should incorporate actuarial financial planning process (or components of it) into their planning toolkits.
Incorporating actuarial methodology and the popular floor-and-upside approach to financial planning, I show how advisors can help their retired (or soon-to-be retired) clients make better financial decisions.
This article discusses situations frequently ignored by retirement researchers and other retirement experts when illustrating or testing proposed distribution/spending approaches. I address the budgeting and planning limitations of sustainable withdrawal plans and Monte Carlo modeling currently in use.
To better serve and retain retired or soon-to-be retired clients, advisors should use the actuarial budget benchmark, an annual spending plan developed using actuarial and financial economic principles.
Research has shown that individual and household spending declines in real-dollar terms upon and following retirement. Yet most financial advisors still use traditional retirement planning approaches that target constant real-dollar spending for the client’s planning period.
Your clients want to know how much they can afford to spend each year and meet their financial objectives, not how much they can withdraw from their investment portfolio. There is only one withdrawal plan that financial advisors should use for their clients.