Kentucky Estates: articles about life cycle planning and its estate, trust, and financial planning applications
Our previous post explored a model of the cost of the promise you make to yourself to fund your retirement, but that model omitted a very important real-world risk: volatile equity markets. Most recently, the 2008 stock market crash changed many retirement plans for the worse. A 2009 study by the Urban Institute, “What the 2008 Stock […]
Pause and reflect on what a pension is: income for life after you retire, intended to replace part of all of your employment income. For retirees in the “Greatest Generation,” pensions were common. For a host of reasons (presented well by Jacob Hacker in his 2006 book The Great Risk Shift) structural changes in the American […]
Most people know (at least in the abstract) that choices have consequences. Choices you make to manage your behavioral tendencies (or not) and about your investment costs may have tremendous consequences for when you can retire. I built a model to explore the tradeoffs between retirement age, investment costs, and behavioral tendencies. Like any model, […]
Successful investing presents practical and emotional difficulties. Reducing those difficulties as much as possible turns on your answers to two questions: Do you believe markets are efficient? Can you manage your behavioral tendencies? After you have thoughtful answers to those two questions, it’s easier to make good decisions for you about choosing an investment style […]
We live in a world of nearly infinite, nearly free information. That includes financial information, commentary, journalism, and forecasts. Among this clutter, it can be very hard to decide what deserves attention, what’s worthwhile, and what to believe. Print, television, and Internet journalism thrives on readers and viewers. In a media landscape that is so […]
Spy Game (2001) is all about retirement: Nathan Muir’s last day at work at the CIA. Muir (Robert Redford) has a protege, Bishop (Brad Pitt), who’s been thrown into a very unpleasant prison in coastal China. Muir calls his broker and tells him to sell all of his assets, raising $282,000 to bribe a Chinese official […]
The Right Stuff (1983) is a movie that’s begun to be fully appreciated only recently. One of its best scenes is when the iconic test pilot Chuck Yeager (played by Sam Shepard) takes a very dangerous flight in an NF-104 Starfighter in December 1963, attempting to break the world altitude record. At the edge of space above the […]
I think “budgets” are the reason many more people don’t have a sensible strategy for reaching their financial goals. The word “budget” creates obstacles in two ways. First, budgets imply choices, tradeoffs, and the unpleasant word “no.” Second, most people lack even half the clarity about their spending that’s required to make a reasonably accurate budget. Without good […]
A financial plan should be a thoughtful alignment of your income, expenses, saving, and asset allocation that makes it more likely you’ll achieve what matters most to you. Your estate plan is financial plan’s autopilot, ensuring that your capabilities carry out your goals, even if you’re not around to supervise things yourself. Using the Quadrant-based life cycle planning […]
It’s unclear whether Auguste Comte really said that “demography is destiny,” but you can and should use demographic data to make better estate and financial planning decisions. As we’ve noted, an estate plan often represents a set of predictions about a family’s future, predictions that will be improved when the plan considers the family’s Longevity Distribution. Your […]
People live their lives as a unitary whole, but often analyze them in segments. It’s valuable to keep in mind how these segments relate. Consider the diagram below: The Life Cycle Estate and Financial Planning Quadrant has four domains: Facts, Forecasts, Life Stages, and Unexpected Events. Facts are empirically observable data, things you can measure. […]