Retirement Income Redesigned

Clients nearing retirement have some significant challenges to face. And so do their advisers. They can expect to live far longer after they retire. And the problems they expect their advisers to solve are far more complex. The traditional sources of retirement income may be shriveling, but boomers don't intend to downsize their plans. Instead, they're redefining what it means to be retired—as well as what they require of financial advisers. Planners who aren't prepared will be left behind. Those who are will step up to some lucrative and challenging work. To help get the work done, Harold Evensky and Deena Katz—both veteran problem solvers—have tapped the talents of a range of experts whose breakthrough thinking offers solutions to even the thorniest issues in retirement-income planning: Sustainable withdrawals Longevity risk Eliminating luck as a factor in planning Immediate annuities, reverse mortgages, and viatical and life settlements Strategies for increasing retirement cash flow In Retirement Income Redesigned, the most-respected names in the industry discuss these issues and a range of others.

Acknowledgments ix About the Contributors xi Foreword by Walter Updegrave xxiii PART ONE: FACING THE NEW REALITIES 1 1 Boomers: A Force for Change 5 Deena B. Katz 2 Maslow Meets Retirement 17 Mitch Anthony and Lewis J . Walker 3 Decision Making at Retirement: High Stakes for the Long Haul 33 Donald G. MacGregor 4 Reinventing Retirement 49 Mitch Anthony PART TWO: ASSESSING THE RISKS 65 5 Psychological Impediments to Retirement-Income Planning 69 Mathew Greenwald 6 Lifelong Retirement Income: How to Quantify and Eliminate Luck 77 Jim C. Otar 7 Balancing Mortality and Modeling Risk 97 Cynthia Saltzman 8 Monte Carlo Mania 117 Robert D. Curtis 9 Understanding Required Minimum Distributions 141 April K. Caudill PART THREE: SHAPING THE SOLUTIONS 157 10 Risk Management During Retirement 163 Moshe A. Milevsky With Anna Abaimova 11 Withdrawal Strategies: A Cash Flow Solution 185 Harold Evensky 12 Asset Allocation: The Long View 203 Laurence Booth 13 Sustainable Withdrawals 217 William P. Bengen 14 Tools and Pools: Strategies for Increasing Retirement Cash Flow 237 Robert P. Kreitler 15 Creating Portfolios With Lower Volatility 255 Louis P. Stanasolovich 16 Reverse Mortgages in Distribution Planning 281 Roxanne Alexander and Michael J. Anderson 17 Life Insurance Benefits—No Waiting 305 Douglas Head 18 Longevity Risk Insurance 311 Roger G. Ibbotson, Michael C. Henkel, and Peng Chen 19 Immediate Annuities: Structure, Mechanics, and Value 323 R. H. "Rick" Carey and Jeffrey K. Dellinger 20 The Search for Software 343 Joel P. Bruckenstein Continuing Education Exam 353 Index 361