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Wealth Odyssey: The Essential Road Map For Your Financial Journey Where Is It You Are Really Trying To Go With Money? 0th Edition
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Learning Leadership: The Five Fundamentals of Becoming an Exemplary Leader
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Top Customer Reviews
Current research has refined, and is continuing to refine, a sustainable withdrawal rate for retirement. How does such a withdrawal rate need to change with the markets of 2007 and 2008? Up until 2009, sequence risk (bad market sequences for retirees living on their portfolios) was not widely researched. My website (BetterFinancialEducation) has links to current research applying the dynamics of time which has launched a second generation (the first generation was based on static time frames and "initial" withdrawal rates developed) perspective on withdrawal rates and portfolio distributions using terminology such as "current," target end age, dynamic, based on probability of the person and of the portfolio. The difference between first and second generation thought is that second generation thought recognizes that the withdrawal rate can increase as you age, in addition to an inflation adjustment. My colleagues and I have refined the decision rules to aid retirement decision making during poor markets based on probability of failure. We have also introduced modeling that, for the first time, includes integration of longevity statistics so that the distribution period is also dynamic (rather than fixed as in first generation models). I keep my website up-to-date with current research in the increasingly important area of sustainable retirement income.
The Wealth Rule in the book still applies. What is now different is that, rather than a fixed 4% for example, the withdrawal rate changes based on age. This is because, as you age, the distribution period gets shorter; thus, the withdrawal rate may increase as you age.Read more ›
Frank states he does not like the 70% to 80% income replacement ratio rule-of-thumb advocated by the AON/Georgia State surveys. He says he doesn't have any clients who want to take a 30% reduction in spending when they enter retirement.
Frank advocates the approach of calculating actual current spending versus the 70-80% rule-of-thumb. He uses the easier approach of gross earnings minus (SS + fed taxes + state taxes + savings) to get actual spending. This approach is much simpler than keeping records on all the budget line items you have expenses for.
Frank correctly emphasizes the pay yourself first rule. If you have your savings automatically deposited in your 401K via payroll deduction.....you will meet your savings goals. If you try to save the money you have left over at the end of each month......you will always run out of money and therefore have no savings.
My favorite story for why to pay yourself first......is the US government. The Government was concerned that people would not be able to pay their income taxes if there was an annual tax bill due.......so they started automatic payroll deduction to make sure they got their money first. Why not use the same trick our Government does to make sure you get your money saved?
Frank also applies his same 5% SWR to figuring out how much life insurance you need. A 5% SWR equates to 20X the income level you need. If you need $60K of income to support your family if you die.....Read more ›
Most Recent Customer Reviews
Author Larry R. Frank Sr., in his book "Wealth Odyssey: The Essential Road Map For Your Financial Journey - Where Is It You Are Really Trying To Go With Money? Read morePublished on October 28, 2006 by W.H. McDonald Jr.
Larry Frank Sr, gives you a guidebook or "road map" for your financial goals or journey. If you are lost and need some help setting up a long term plan, this is the book for... Read morePublished on May 26, 2006 by Michelle Dunn