November 16, 2017

Realism-v-reality – working part-time as retirees

Are you planning to boost your retirement income by doing some part-time work once you eventually retire? Perhaps you have included the expectation of some paid work in your calculations about how much you need to finance your retirement. If so, this leads to another question: How realistic is that expectation? A recent research paper, Retirement transitions in four countries, may help provide some answers. More than 5560 pre-retirees (who are planning to retire within 10 years) and recent retirees (who retired over the past 10 years) age 55-75 took part in the study covering Australia, the United States, United Kingdom and […]
November 8, 2017

How to develop a “dynamic” approach to retiree spending

As we recently discussed, the combination of historically-low yields, expected muted investment returns and growing life expectancies are making it particularly challenging for retirees to calculate how much to draw down from their retirement savings. A critical issue here is how much retirees can withdraw from their portfolios each year to finance their current spending and to generate future income for the rest of their lives, no matter how long. It’s challenging. Two traditional approaches are to draw down a set percentage each year of a portfolio’s value or to set a dollar amount to withdraw in the first year of […]
November 1, 2017

How our investment past can damage our investment future

Most investors can probably have investment experiences that have shaped how they behave as investors in the future. For instance, an investment, in say, a single stock, may have been highly profitable as you happened to buy and sell at the right time. However, such an experience may give you make you overconfident in your abilities as an investor, including in your perceived ability to somehow pick future winners. By contrast, a past investment loss from perhaps buying when markets were at a high and selling after markets had heavily fallen may lead you to having an excessive aversion to […]