The final task in the area of investments is to establish a monitoring system to evaluate investment performance and to determine whether the fund’s investment objectives have been met. This topic is the subject of a separate monograph published by the Financial Analysts Research Foundation, and it will not be covered at any length here. However, a few comments are pertinent. (more…)

Once the cash flows to be financed are determined, whether via a detailed version of the determination of planned expenditures or the simpler “rule of thumb approach,” the question of how each $1 of assets will be turned into an income flow must be addressed. How much income will each dollar generate, and for how long? This is the basic issue of longevity risk (the risk that a person will live either beyond, or not until, their “life expectancy”). This source of uncertainty presents perhaps the most significant challenge for cash flow planning in retirement. (more…)

A number of factors may result in your finding part-time rather than full-time work during your later years. One factor to keep in mind is that you can only earn a specified amount each month and still receive your social security benefits. Therefore, unless you decide to forego your social security benefits you will of necessity be limited in the amount you can earn. Of course, after age 72 you can earn as much as you want and still receive your social security benefits payments. (more…)

If you are asking yourself, how much to retire? You are asking yourself the wrong question. It should be how bad do I want to retire?

It is 2009 and 401K’s have turned into 201K’s…or worse. It is especially cruel to the baby boomers that have saved and saved only to see many years of steady gains disappear in their portfolios.

There is hope to still go ahead and retire if you are willing to examine some alternatives to “normal” retirement. (more…)