Peter Tsui
Former Director, Global Research & Design, S&P Dow Jones Indices
Unconventional Sources of Retirement Income
The three pillars of conventional retirement income are social security retirement benefits, pensions from employment, and personal savings. There are, however, other potential sources of retirement income that are not mentioned often enough. These include (a) the cash value of one’s whole life insurance policy, (b) the home equity value of one’s residence, and (c)…
- Categories Uncategorized
- Tags insurance, pensions, retirement, retirement income, social security
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Why Does Sequence of Returns Risk Matter for Retirement?
Sequence of returns (SoR) risk refers to the situation when the market experiences random movements in such a way that returns are not uniformly distributed. For example, in the 32-year period from 1966 to 1997, the DJIA had an annualized return of 8%. However, the returns were not evenly distributed over time. For the first…
- Categories S&P 500 & DJIA
- Tags asset allocation, DJIA history, retirement, Sequence of Returns Risk
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- S&P 500 & DJIA
Optimal Timing and Strategy for Claiming One’s Social Security Retired-Worker Benefits
The decision to claim social security benefits is not as straightforward as it seems and involves a number of key considerations. Given that it is a one-time decision and locks in one’s benefits permanently, aside from periodic cost of living adjustments, it is important for retirees to rethink whether there is an optimal timing and…
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- Tags retirement, social security
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Potential Risks When Constructing a Sustainable Lifetime Income
In retirement, financial ruin is taken to mean when one’s savings have been depleted before one passes away. If one’s savings are invested in a diversified portfolio, financial ruin is taken to mean the combined effects of withdrawals and adverse market conditions that can potentially deplete the portfolio before one’s passing. Financial ruin to one’s…
- Categories Uncategorized
- Tags financial ruin, longevity, retirement, sustainable life income
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Is There an Optimal Strategy for Withdrawing Funds From a 401(k) Savings Account?
Conventional wisdom tells us to maximize our contributions to a 401(k) account and to grow the balance as much as possible for retirement. However, we may not have considered the decumulation side of retirement income. If one waits till reaching the age of 70 ½, when the 401(k) balance is larger, he/she may face a…
The Lifetime Income Disclosure Act of 2017
Earlier this month, both the Senate and the House introduced bipartisan legislation to amend the Employee Retirement Income Security Act that would mandate annual income disclosures on 401(k) and other defined contribution account documents. The language in the legislation is identical to a bill introduced in 2009, early in the Obama administration. This new effort…
The Little Cousin to TIPS
We explored the topic of building a 30-year TIPS portfolio in a previous blog. If the numbers we threw around seemed too big (USD 5,000 or USD 10,000 per year over a long period of time) for a Millennial, don’t lose heart. The U.S. Series I Savings Bonds (or I Bonds) provide an easy way…
- Categories Equities
- Tags retirement; I Bonds; Millenials
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- Equities
How to Build a TIPS Ladder Portfolio for Millennials
In his January blog post entitled “Try a TIPS Mixer in Your Equities Cocktail,” Phillip Murphy described the potential benefits of including Treasury Inflation-Protected Securities (TIPS) in one’s portfolio. In this blog aimed at Millennials, I would like to propose an easy way to build up a 30-year TIPS portfolio for retirement. Let us assume…
- Categories Fixed Income
- Tags retirement, TIPS, TreasuryDirect
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- Fixed Income
How Much Is Your Social Security Benefit Worth?
Social Security benefits are the gold standard of retirement income. As Nobel Laureate Robert Merton commented in his article “The Crisis in Retirement Planning,” published in the Harvard Business Review (July/August 2014): “Ask someone what her pension is worth and she will reply with an income figure: ‘two-thirds of my final salary,’ for example. Similarly,…
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- Tags annuity, retirement, social security
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