On Friday, the Social Security Administration announced that there would be no increase in Social Security benefits for 2011, representing the 2nd consecutive year that Social Security benefits have not increased... and prompting no small amount of outrage from many Americans who feel that they are falling further and further behind in their ability to keep up with their retirement expenses.
It is a popular trend these days in financial planning to talk about all the ways our clients behave irrationally, supported by a growing base of research in "behavioral economics" that demonstrates how our hunter/gatherer brains are ill-equipped to cope with today's complex world. We tend to talk about these behaviors in the negative, but what if we could use some of our irrational tendencies to our benefit, instead?
Yesterday, President Bush signed into law H.R. 7327, the Worker, Retiree, and Employer Recovery Act of 2008 (WRERA), which included certain provisions designed to suspend so-called Required Minimum Distributions (RMDs) for the upcoming 2009 tax year. But will that really do much to help our clients? Probably not in most cases.Read More...
As readers of my newsletter know, in May I published research that challenges the safe withdrawal rate as potentially being TOO safe in some environments, where market valuation is not at unfavorable extremes. However, in some feedback I've received from readers, another important point is being made - in some cases, the safe withdrawal rate may also still be too aggressive!
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Many financial planners are faced with the client question: "Which pension option should I choose?" Comparing various lump sum and annual pension payout choices based on client life expectancies has often been mathematically intensive and quite difficult - at least, up until now.
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An interesting article in the syndicated column of Scott Burns suggests that it may be a wise strategy for those at or around age 70 to withdraw from Social Security and reapply to increase their benefit. Is this a Social Security loophole, a great deal, a trap, or just another good arrow in the financial planner's quiver?Read More...
A new study from Sun Life Financial suggests that retirees may have a consistent sequence of extra spending goals throughout their retirement years. Of course, practicing financial planners have acknowledged for years that retirement spending isn't perfectly level from year to year, but Sun Life's new study suggests that there are some consistent patterns that can be gleaned.
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