A Floor with an Upside: The Best Strategy for Lifetime Income?

Could you live off your investment portfolio indefinitely, if you had too? The answer to that question lies in the relationship among your total assets, your living expenses, your investing skill, the length of your retirement, market valuations when … [Continue reading]

Constant Retirement Withdrawals: Realistic or Not?

"A foolish consistency is the hobgoblin of little minds…"  —Ralph Waldo Emerson There is a fatal flaw in most simple retirement models and rules of thumb. For example, the famous "4% rule," which states that you can … [Continue reading]

Why an Annuity Could Be in Your Future…

If you're like many independent-minded boomers who cut their teeth on the market conditions of the 1990’s, you may harbor serious suspicions about annuity products. Who needs an annuity? With the stock market averaging near double-digit returns in … [Continue reading]

Larceny and Road Kill: Self-Insuring Revisited

It's only human to form opinions based on experience. But reality often conspires to modify our views. When things don't go as expected, I find it's best to study what went wrong, refine your thinking, and keep moving ahead. I recently re-learned … [Continue reading]

Blueprint: Asset Allocation

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New Ideas for Retirement Income

How to save for and then generate enough retirement income is a central theme here. It turns out that the tools used to accumulate sufficient assets to retire — portfolio diversification according to Modern Portfolio Theory — are probably … [Continue reading]

Blueprint: Paying for College

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What is Your Personal Rate of Inflation?

Inflation is often seen as the termite of the financial world. Gnawing away at your assets over long periods of time, it's an insidious threat. Hard to detect over short time frames, it can seriously damage your assets over the long term, robbing … [Continue reading]

Blueprint: Retirement Health Care

Special Note (2014): The diagram below has been dated by the implementation of the Affordable Care Act (Obamacare). Until I'm able to update it, please do not consider it an accurate guide to the current state of retirement health care. … [Continue reading]

Three Wildcards for Boomer Retirement

The first wave of the post-war baby boom generation reached age 65 last year, and finally started coming to grips with retirement realities. These are the same realities that anybody contemplating retirement in the foreseeable future must face. … [Continue reading]

When Should You Self-Insure?

Some people have an affinity for insurance and buy all the coverage they can get. It gives them peace of mind, at a price. Others are suspicious of insurance and loathe paying premiums for services they may never use. Count me in that latter … [Continue reading]

Blueprint: Building Wealth

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Blueprint: Rebalancing

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How I Rebalanced Through Perilous Times

“Benign neglect, bordering on sloth, remains the hallmark of our investment process." —Warren Buffett To rebalance, or not to rebalance? When? How? We've reviewed the sometimes conflicting and arbitrary advice of a number of experts. … [Continue reading]

Blueprint: Can I Retire?

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Rebalancing: Should You Bother?

In my earlier post we analyzed when to rebalance your portfolio and discussed the mechanisms for how to rebalance. Now let's take a contrarian step back and question the entire rebalancing process. Does rebalancing actually pay off in the real world? … [Continue reading]

When and How to Rebalance Your Portfolio

Rebalancing your portfolio means adjusting the current asset allocation, moving it closer to some previously-chosen target. In theory, rebalancing captures a portion of the profits earned by your winning investments, and reinforces your losing … [Continue reading]

Diversification: Why Seeing Red Can be a Good Thing…

Can watching your investments go down ever be a good thing? To answer that, you need to know a little about my weekly investing routine.… For years I've tracked my investment portfolio on a My Yahoo page. It doesn't take much space: … [Continue reading]

A Guide to Retirement Health Care – How Will YOU Get It?

Health care is the single biggest obstacle to retirement for many Americans. My ongoing Reader Survey indicates that health care is also the most common concern for readers of this blog — trumping even running out of money, Social Security, the … [Continue reading]

My Top Investment Picks for the Future…

I'm often asked where I think the economy or market is headed. Readers of my CNN Money interview, or my recent article on overcoming the fear of stocks, might think I'm especially bullish on stocks. But that's not the case. I'm bullish on … [Continue reading]

Is the 4% Safe Withdrawal Rate Obsolete?

One of the first questions that comes up when looking at modern retirement is "How much money do I need to save?" Amazingly, there was little hard research aimed at answering this question until about the mid-1990's. Some of the first answers were … [Continue reading]