On this episode of The Resilient Advisor Podcast, Dr. Wade Pfau and Jay Coulter discuss managing sequence of returns risk in retirement planning. Last spring Dr. Pfau had an article published on Forbes.com titled ”4 Approaches To Managing Sequence of Returns Risk In Retirement.” It is a very popular post on the site. We examine each approach from the financial advisor's perspective.
1. Spend Conservatively
-> Is the 4% number correct in this low interest rate environment?
2. Maintain Flexible Spending
->Article: The Original Retirement Spending Decision Rules (Link)
3. Reduce Volatility (When it matters the most)
-> Reducing Retirement Risk with a Rising Equity Glide Path with Michael Kitces in the Journal of Financial Planning (Link)
4. Buffer Assets
-> Interview with Jamie Hopkins on Home Equity (Link)
-> Bucket Strategies vs Buffer Assets
We discuss Dr. Phau's involvement with inStream (http://instreamwealth.com)
Connect with Dr. Phau
About Dr. Wade Phau
Wade joined McLean in 2013, the same year Investment News named him one of the “20 people expected to shape the financial advisory industry.” Since then, IN has named him to their lists of industry leaders every year, most recently on their list of “Icons & Innovators” of the financial industry in 2016. He has been recognized with numerous other honors, including sharing the 2012 Academic Thought Leadership award from the Retirement Income Industry Association for his work evaluating outcomes of different retirement strategies.
Working with the advisors at McLean, Wade is able to see his research implemented into practical application through actionable solutions for clients. Wade is professor of Retirement Income in the Ph.D. program for Financial and Retirement Planning at The American College in Bryn Mawr, PA, and he publishes frequently in a wide variety of academic and practitioner research journals. He is also an active blogger at Retirement Researcher, and is a monthly columnist for Advisor Perspectives, a RetireMentor for MarketWatch, a contributor to Forbes, and an Expert Panelist for the Wall Street Journal.
Wade was born in suburban Detroit in 1977 and lived there until he was 15. He then moved to Des Moines, Iowa, where he graduated from East High School in 1995. From 2003 to 2013, Wade lived in Japan, where he worked with the National Graduate Institute for Policy Studies and published a landmark paper challenging the 4 percent rule.
B.S. Economics, B.S. in Political Science, B.A. in History, University of Iowa
M.A. Economics, Princeton
Ph.D. Economics, Princeton
Professional Certifications & Associations
Chartered Financial Analyst® (CFA)
Financial Planning Association, Member