Most investors I know think about retirement savings from the perspective of fixed annual percentages. That is, they seek to answer:
- What percentage of my income should I save every year during my working years, and
- What percentage of my portfolio can I spend every year during my retirement years?
As retirement researcher Wade Pfau explains in two articles this week, many economists favor the “lifecycle finance” model in which the only thing that is fixed is how much you spend per year (in dollars). And your savings rate (and later, withdrawal rate) are what fluctuate over time.
- Lifecycle Finance: An Alternative For A Lifetime Financial Plan from Wade Pfau, at Forbes
- Lifecycle Finance: Upending the Old Retirement Rules (a followup piece, at MarketWatch)
- The Best Investment Strategy: Getting Out of Our Own Way from Carl Richards
- Does International Diversification Improve Safe Withdrawal Rates? from Wade Pfau
- Beat the S&P 500 with the S&P 500 from Rick Ferri
- What’s the #1 Sign an Investment Is Riskier Than It Sounds? (my answer, at WSJ)
- Are Savings Bonds Still a Good Gift Option for Kids? (my answer, at WSJ)
- Should Investors Have Less Money in Bonds Because of Low Interest Rates? (my answer, at WSJ)
Other Money-Related Articles
- Education Tax Benefits from Jim Blankenship
- 6 Reasons Nothing (after 50) Matters More Than Your Retirement Date from Jim Dahle
- Make Backdoor Roth Easy on Your Tax Return from The Finance Buff
Thanks for reading!