RMM3
RETIREMENT MONEY MANAGEMENT 3 --
MAKING IT LAST
This course is the third in a series of three interrelated 2-hour courses. (The first course is entitled Retirement Money Management 1 -- Process and Concepts and the second is entitled Retirement Money Management 2 -- Building the Nest Egg.) Although each of these courses may stand alone, students who are considering taking each of these courses are encouraged to take them in order – 1, 2, then 3 – but it is not absolutely necessary.
This course looks at investment planning and money management decisions at and after retirement. Certainly one of the most critical questions facing many, if not most, retirees is whether they will outlive their sources of retirement income. The research and guidelines presented here should help you avoid critical mistakes in this ever-so-important planning area.
Major topics include:
- Addressing the extremely critical question of how much retirees can afford to withdraw each year from their retirement assets and remain secure that they will not outlive their resources;
- Showing the historical success rates for maintaining real, inflation-adjusted, after-tax withdrawals from portfolios with differing allocations among large and small cap stocks and intermediate bonds over retirement periods ranging from 15 to 35 years;
- Describing the use of survival probabilities for single, joint first-to-die, and joint last-to-die mortality statistics to set the planning horizon for retirement;
- Providing a worksheet to compute estimates of the funds necessary to successfully sustain desired real, inflation-adjusted, after-tax retirement income levels during retirement;
- Explaining and describing the use of the concept of financial “laddering” to minimize the funds necessary to make income last a lifetime with a specified probability of success; and
- Discussing the pros and cons of using variable and indexed annuities as vehicles for accumulation of retirement assets and for providing some portion of one’s desired retirement income.
CPE Credit: 2 hours, Taxes and Finance
Level of Knowledge: Intermediate
Prerequisites: None
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