Financial Reviews and Planning in Retirement

December 26, 2013

Financial planning for retirement at times seemed like a simple (in theory) exercise in accumulating assets, determining the appropriate investment allocation for those assets given the expected retirement ages for me and my wife and managing down debt over time.

Once in retirement, I am now living the plan and it is important, I think, to pause from time to time and review how well the plan is working and what, if any, changes are called for. A review might be occasioned by an event (a death, change in health status, market decline), changed expectations (life expectancy, inflation outlook, anticipated behavior of politicians) or simply the passage of time from the last substantive review.

Before retiring, I took the financial plan I had constructed and reviewed it with a fee-for-service financial planner. He concluded it was a conservative, reasonable approach and I went forward with it. I was then, and remain, a fan of the investment approach described in John C. Bogle’s Common Sense on Mutual Funds.

Since retiring I have reviewed the plan on my own every couple of years and have not made any significant changes. This year, since I am a bit more than ten years into retirement, I decided to do a more thorough review and to have a professional planner take a look at it also. I devoted about ten-twelve hours to the review and looked at the plan from a variety of perspectives which I then reviewed with the professional. He generally endorsed it and gave me a few additional options to consider for the future. All time well spent.

While doing the review I found several tools to be quite helpful:

The T. Rowe Price Social Security Benefits Evaluator can help you determine your expected benefits and the optimal time and form for taking those benefits. You can find it here.

Wade Pfau is a Professor of Retirement Income at The American College. He publishes a blog called Wade Pfau’s Retirement Researcher Blog in which he discusses assert allocation, retirement fund withdrawal rates, annuities, bond ladder building among other topics. It is found here.

W. Van Harlow is Director of Research at the Putnam Institute and has done some interesting work on managing downside risk in asset allocation. You can find his paper here.

Nobel laureate William Sharpe has a helpful blog on Retirement Income Scenarios. It is found here.

Happy Planning!

R. Kevin Price

© 2008-2013 R.K. Price