Revisiting Capacity for Loss In Retirement
There's a lot of confusion around assessing capacity for loss, particularly for clients drawing down their portfolio. Much of it stems from the fact that the Regulator doesn't really seem to know how it should be assessed.
There appears to be two camps in this debacle. On one side, you have an ex-regulator, paraplanners and compliance consultants who seem to think that capacity for loss is the be-all and end-all. We’ll call them the ‘compliance camp’. On the other hand, you have financial planners at the coal face.
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How AUM Fees Affect Sustainable Withdrawal
One of the great misconceptions about the Sustainable Withdrawal Rate (SWR) framework is how an adviser (and fund) fees affect withdrawals from a retirement portfolio.
This analysis shows that 1%pa translates into around 6%-12% (UK) and 9%-13% (US) of the client's overall income and capital, depending on the scenario. A total fee of 2%pa wipes out around 13%-26% (UK) and 19%-28% (US) of the overall fund, depending on the scenario.
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Bengen’s 4% Rule Around The World
How much can I draw from my retirement savings without running out of money?
This is the 64-million-dollar question Bill Bengen attempted to answer in his seminal 1994 paper published in the Journal of Financial Planning.
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Retirement Income Plan For The Miggins II
The Miggins are back. See here for details but the headline is John and Jo Miggins are 65, recently retired with £300k in their retirement pot and a house with no mortgage.
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Retirement Income Plan for The Miggins
John and Jo Miggins have worked hard all their lives. They saved as much as they could and now they’re ready to retire.
They've paid off their mortgage and their home is worth £260k. Between them, they have £300k in their pension pots. And that’s it!
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Article
Mon, Mar 25, 2019
Lessons from 119 years of capital market data
The latest Credit Suisse Global Investment Yearbook (excerpt here) compiled by Professor Elroy Dimson and his colleagues Paul Marsh and Mike Stanton, is a treasure trove of information. It covers asset class return and inflation in 26 different markets over the 119 years between 1900 and 2018.
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Announcements
Wed, Dec 12, 2018
David Blanchett: Sustainable Withdrawal Rates: A Smart Alternative to Reducing Life Expectancy
Did you know that retirement costs more than double what it did 30 years ago?In this light-hearted video, David Blanchett's PhD, CFA, CFP shares his thoughts on what people can do about it.
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Announcements
Tue, Dec 11, 2018
David Blanchett: Retirement crisis? What Retirement Crisis…?
In this video, David Blanchett PhD, CFA, CFP poses the question, is there a retirement crisis? Meaning, will everybody run out of money?
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Announcements
Wed, Nov 28, 2018
David Blanchett: Sustainable Withdrawal Rate - A UK Perspective
In this video, David Blanchett's PhD, CFA, CFP looks at how the now famous 4% rule developed.
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