January 25, 2024 Personal Wealth Episode 289 – Retiring Retirement Income Myths with the Retirement Income Dream Team Does the 4% rule still work? In this episode, we welcome three esteemed experts to counter a recent controversial claim made on the Dave Ramsey Show regarding the validity of the 4% rule in retirement planning. Joining us is David Blanchett; the Managing Director and Head of Retirement Research for PGIM DC Solutions, Michael Finke; a distinguished professor of wealth management at the American College of Financial Services, and Wade Pfau; Director of Retirement Research at McLean Asset Management. In our conversation, these experts shed light on the intricate world of retirement income planning, dispelling misconceptions and advocating for a more nuanced approach. Discover the flaws in Ramsey’s assertion and explore the dynamics of sequence of return risk in retirement planning. Unpack the complexities of investing in bonds for retirees and the evolving risk profiles of stocks over varying investment horizons. We also uncover the significance of variable spending rates, debunk the fallacies behind aggressive withdrawal suggestions, a safety-first approach in retirement finance, and much more. Tune in for an enlightening journey through retirement planning and equip yourself with expert insights to pave a secure path for your financial future! Key Points From This Episode: (0:07:26) The motivation for addressing Dave Ramsey’s 8% retirement spending rate claim. (0:09:48) Unpack the holes in Dave Ramsey’s 8% claim. (0:15:08) How important sequence of return risk is for retirement planning. (0:17:57) Discover if investing in bonds is risky for a retiree. (0:21:55) Learn how the risk of holding stocks changes for longer versus shorter investment horizons. (0:24:04) Subjective risk tolerance and how it is influenced by market fluctuations. (0:30:10) Going all-in on stocks compared to strategies that involve both bonds and stocks in your investment portfolio. (0:35:23) They share their thoughts on Dave Ramsey’s notion that the 4% rule is depressing. (0:37:28) Overview of the issues and misconceptions surrounding the 4% rule. (0:40:06) Alternative approaches to spending money from a riskier investment portfolio. (0:43:01) Dynamic spending strategies to improve the initial withdrawal rate from investments. (0:50:05) Explore other financial products, like annuities, for retirement planning. (0:58:46) Mindset hurdles and adjusting expectations for financial planning. (1:02:24) Dissect the concept of delaying government pensions and its impact on investors. (1:07:52) Insights into the pros and cons of delaying social security for higher-earning women. (1:09:30) Final words of wisdom the guests have for listeners. Participate in our Community Discussion about this Episode: https://community.rationalreminder.ca/t/episode-289-retiring-retirement-income-myths-with-the-retirement-income-dream-team-discussion-thread/27348 Links From Today’s Episode: Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582 Rational Reminder Website — https://rationalreminder.ca/ Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/ Rational Reminder on X — https://twitter.com/RationalRemind Rational Reminder on YouTube — https://www.youtube.com/channel/ Rational Reminder Email — info@rationalreminder.ca Benjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ Benjamin on X — https://twitter.com/benjaminwfelix Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/ Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/ Cameron on X — https://twitter.com/CameronPassmore Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/ Michael Finke — http://www.michaelfinke.com/home.html Michael Finke on X — https://twitter.com/finkeonfinance Michael Finke on Facebook — https://www.facebook.com/mfinke David Blanchett — https://www.davidmblanchett.com/ David Blanchett on X — https://twitter.com/davidmblanchett David Blanchett on LinkedIn — https://www.linkedin.com/in/david-blanchett-b0b0aa2/ Wade Pfau — https://retirementresearcher.com/wade-pfau/ Wade Pfau on LinkedIn — https://www.linkedin.com/in/wpfau/ Wade Pfau on X — https://twitter.com/WadePfau Retire With Style Podcast — https://risaprofile.com/retire-with-style/ Episode 89: Wade Pfau: Safety-First: A Sensible Approach to Retirement Income Planning — https://rationalreminder.ca/podcast/89 Episode 137: David Blanchett: Researching Retirement — https://rationalreminder.ca/podcast/137 Episode 254: David Blanchett: Regret Optimized Portfolios and Optimal Retirement Income — https://rationalreminder.ca/podcast/254 The Ramsey Show — https://www.youtube.com/@TheRamseyShowEpisodes The Ramsey Show: You Can’t Win With Money if You Don’t Know Where Your Money Is — https://www.youtube.com/watch?v=Xg4Z8EQY3Ao ‘Supernerds Unite Against Dave Ramsey’s 8% Safe Withdrawal Rate Guidance’ — https://www.thinkadvisor.com/2023/11/13/supernerds-unite-against-dave-ramseys-8-safe-withdrawal-rate-guidance/ RISA profiler — risaprofile.com/rationalreminder ‘Quasi-empirical bootstrap sampling paper’ — https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4590406 Jason Fichtner — https://bipartisanpolicy.org/person/jason-j-fichtner/ ‘The Value of Delayed Social Security Claiming for Higher-Earning Women’ — https://dx.doi.org/10.2139/ssrn.3849653 Tune Out The Noise — https://film.dimensional.com/podcast/login?redirect=%2Fpodcast Discount Code for Tune Out The Noise — RATIONAL Share: Facebook Twitter LinkedIn Email CIRO Advisor Report
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