A Safety First Approach to Retirement Planning and the Problems with the 4% Rule with Dr. Wade Pfau

[@davidfolts5893]

Wade Pfau reminds me of Jack Bogle, both Princeton graduates and wicked smart.

[@mrb552]

Excellent interview and great questions! 👍

[@johngill2853]

If you really listen to this guy you can learn a lot. 4% is still viable (he estimates 70% of the time), you just have to be flexible if the worst shows up.

[@ExcessReturns]

Thanks John, appreciate you watching and commenting. Wade has many good/important insights in this interview.

[@garya2223]

Now we need a video about the "tax efficiency" of the different types of income - SPIA/DIA, FIA, MYGA, WL, IUL, etc. These types of income will affect taxation of SS differently.

[@hardcor1313]

Mixing it up in retirement for myself has been going like this, | 2019 (2.364%) | 2020 (3.171%) | 2021 (2.75%)| 2022 (2.46%) |. I'm comfortable with this for now, but it only meets my expenses. So far my portfolio balance continues to go up with this type of risk management approach. 4% is too high for me even though it would be nice to have more income. Need to rebalance my portfolio and make those decisions we all struggle with in retirement.

[@jamesmorris913]

...very elderly upon initially funding the annuity and/or, opened it with an ENORMOUS initial sum, in relation to your anticipated spending needs/life expectancy, to protect against inflation.

[@johnnorris4509]

Very nice and bright man you are Wade . Are you still sure 2.8% will be a good withdrawal from savings

[@johngill2853]

Nobody is sure. They make predictions If they were sure of market performance they would be the richest person in the world

[@jamesmorris913]

This video was from nearly a year ago, when FEW people (maybe not even Dr. Pfau) could not have imagined the highest inflation-rate, in 40+ years; that we are currently experiencing! This is my big hesitation about ANNUTIES. To my knowledge..there is no such thing, as an inflation-protected annuity..so in my estimation, an annuity would NOT be "safe" for a retiree, unless you were VERY elderly. What am I missing, here?

[@ExcessReturns]

Thank you for watching and commenting James. You are correct, inflation is very problematic for most annuities. I did a quick Google search, and it looks like there are inflation protected annuities, at least according to this article. Although it looks like they come with a pretty steep cost in order to get that inflation protection. www.annuity.org/annuities/types/inflation-adjusted/

[@tricord2939]

What is the alternative? Stock market and hope.

[@jonathanratliff4780]

Indeed from a Mutual life insurer, most have most have dividend sharing income plans. So annuitant has a contractually guaranteed base income, and then annual dividends added to base that grows income to aid in inflation adjustment. Dividends are not guaranteed, but the cream of the crop Mutual insurers have declared generous dividends every single year even in worst of times for generations of time. Once dividends are declared they cannot be reversed and are then guaranteed for life

[@johngill2853]

You buy the annuity with a part of your money and invest the rest in a high percentage of stocks Also you can buy a COLA adjusted SPIA, while it doesn't increase by the stated inflation rate not everyone feels inflation the same way. For instance somebody who owns their own home won't feel inflation like a renter. Inflation rates are average and not everybody is average

[@johngill2853]

​@@tricord2939 Hope no, calculated risk yes. That is investing . You always have the choice to stick your money in the bank or under your mattress.