Retirement Planning Archives - Integrated Retirement Advisors

RMDs Are Back for 2021




RMDs, or Required Minimum Distributions, are withdrawals that are required by the IRS each year out of your traditional retirement accounts like 401(k)s and IRAs starting at age 72. The money that you have to take out annually by December 31st at midnight is taxed based on your income tax rate for that tax year.

Some retirees forget about RMDs when planning for retirement, and don’t realize how big the tax bite may be for them. This year, because of the pandemic, the CARES Act suspended the RMD for the 2020 tax year in an effort to help retirees avoid withdrawing money from accounts when the market was down.

(An RMD is calculated based on the closing balance of the account at the end of the previous year. When the markets drop significantly, the RMD represents a much higher percentage of a diminished portfolio and that reduces the ability to recover from big losses.)

In 2021, the RMD will be back. As an example, a 75-year-old man with a traditional IRA worth $100,000 will have to withdraw $4,367 this year.

Roth 401(k) Plans

Roth 401(k) plans, which are funded with after-tax dollars, are subject to the same RMD rules that traditional 401(k) and IRA plans are. The amounts are calculated using the same IRS life expectancy tables and account holders must begin taking them after they turn 72. (One exception is if you continue working after age 72 for the company that sponsors the plan and you don’t own more than 50% of the company.)

The difference is that Roth 401(k) withdrawals are usually not taxed.

You can avoid taking the minimum distributions entirely by rolling a Roth 401(k) into a personal Roth IRA, which is not subject to RMD rules.

2020 RMDs Without Penalty, But With Taxes

As part of the CARES Act, the IRS allowed COVID-related withdrawals from traditional retirement plans up to $100,000 without penalty in 2020 for those who were impacted by the pandemic. Income taxes were due on those withdrawals, which could be paid over a three-year period. Those who can afford to can pay the withdrawals back this year (or over a three-year period) can get the taxes back by filing amended tax returns.

Those Who Just Turned 72—It’s Complicated

The SECURE Act of 2019 raised the age when RMDs must begin to age 72. If you turned 70-1/2 in 2019, the old rules applied—your first RMD should have been due April 1st, 2020. However, because the CARES Act suspended RMDs, the new due date was April 1, 2021 for those individuals.

For retirees who turned 72 in 2020 or will turn 72 this year, you can take your RMD at any point in 2021, or even delay it up until April 1, 2022. But if you choose to delay it, you will owe two RMDs in 2022, which could put you into a higher tax bracket.

You should check with your tax professional before making decisions about RMDs, because there are strict rules about which accounts must be withdrawn from and stiff penalties for mistakes—to the tune of taxes owed plus an additional 50%!


To discuss your retirement plan, including RMDs, please call us. We are happy to discuss ideas with you and/or your tax professional. You can reach Nahum Daniels at Integrated Retirement Advisors at (203) 322-9122.


This article is provided for educational purposes only and its content should not be relied upon for tax advice. As always, check with your tax professional or attorney for specific tax advice related to your situation.


Yes, You Can Lose It All, Even If You’re Wealthy

by M. Nahum Daniels

If you’ve been wondering about the book I wrote, RETIRE RESET!, we are publishing some excerpts right here on our blog so that you can learn more. Along the way, you will learn why our firm, Integrated Retirement Advisors, was founded: we’re on a mission to help people with retirement!


Here are some excerpts from Chapter 6.


       “Unless you have millions and millions and millions … you cannot retire on the investment return on your savings … because there is no return on it.”

       Jeff Gundlach, Bond King & Modern Art Collector, Founder and CIO, DoubleLine Capital


I first conferred with Mauricio in 1995, overlooking New York’s Central Park from a Fifth Avenue penthouse filled with modern art. Studying his experience as a do-it-yourself retiree has taught me an invaluable lesson: Even if you enter retirement with many millions, you are always subject to the risks, rules and ratios embedded in modern retirement planning. Should they go misunderstood or ignored, the result can be depletion and austerity—no matter how wealthy you may be starting out. Retirement success, on the other hand, especially if you have only modest wealth, depends on an informed approach to managing your nest egg that properly balances your capital and spending over an open-ended time horizon.

Do you find it hard to believe that even the very rich can run out of money? (Do you find it even harder to be sympathetic?) Allow me to demonstrate the vital lessons worth learning.

Deciding to enter retirement as he turned 65, Mauricio had just completed the sale of a Parisian fashion company he founded, clearing a nest egg of $100 million. Our purpose in meeting that day was to discuss his legacy planning. He faced a 50% estate tax upon his death and was looking for ideas that could mitigate the impact of those levies on his children and grandchildren. As for Mauricio’s income planning, he wasn’t looking for help from me or anyone else. He made it clear that he would consider only US Government bills, notes and bonds.

Mauricio, as it turns out, had serious trust issues. A Holocaust survivor, he spent some of his formative years in Buchenwald, the Nazi slave-labor camp near Weimar, Germany. At age 15, he was one of the prisoners liberated by American troops in April 1945. While maintaining his European connections and building a post-war business there, Mauricio became a proud and grateful American citizen, trusting in the inherent goodness and reliability of US government promises. It was simply unthinkable that the United States of America could ever default. In his mind, government paper was as safe as safe could be, and he viewed it as the key to a “risk-free” retirement that would let him sleep soundly at night while enabling him to live a fulfilling life by day.

And he wasn’t one to fuss. A saver at heart, he’d be happy to buy and hold US notes for their ten-year duration and simply roll them over to new issues when they matured. He would hear of nothing else. Risk was anathema. Professional advice was gratuitous. He would manage his own money by lending it (safely) to the US Treasury.

Besides, in January 1995 savers like Mauricio could still thrive. The risk-free 10-year Treasury note was yielding 7.69%. In theory, it would pay him annual interest of $7,690,000 for ten years without having to dip into principal. What’s more, that yield was tax-advantaged: Interest income on US Government obligations was then (and is still) given preferential tax treatment. He would have to pay about 40% in federal income taxes but would avoid New York state and city taxes that together could have easily added another 10% or so to the burden.

Mauricio estimated that around $4.6 million spendable dollars would enable him to fund his family needs and essential living requirements, his discretionary globetrotting, his passion for modern art and his generous philanthropy. So, he matched his lifestyle to the income his capital would generate. “Living off the interest,” he began his retirement by effectively withdrawing 7.97% from his nest egg. As for his estate-tax obligation, he would simply set up a life insurance trust and be done with it.

Later on, I learned that Mauricio had failed to factor in inflation, which averaged around 3% a year during the decade that followed (and even more in the prices bid for modern art). To keep up with his increasing cost of living he would have to up his annual withdrawal. To avoid dipping into principal, Mauricio faced the sacrifice of reducing his art-buying and charitable giving. He decided to give his lifestyle priority. Luckily, falling Fed interest rates during this period mitigated any capital depletion as he sold some of his bonds into a rising-price market. Still, after ten years, he found that he was left with only $85 million of the $100 million with which he began (Table 2).

When he rolled his portfolio over in 2005, however, 10-year rates on government notes had fallen to 4.16%. Reinvesting his capital at age 75, he would be earning $3.54 million in interest, less than half of what he had started with ten years earlier, and after federal income tax, it would leave just $2 million spendable dollars. Meanwhile, his annual expenses had inflated to over $10 million. Withdrawing $10 million a year from an $85 million nest egg would equate to a 12% annual withdrawal rate. Now 75, he wanted that money to last him another 25 years, just to be safe, and a 12% withdrawal rate would put him at great risk of premature depletion.

Facing the same challenge that can confront every retiree, Mauricio recognized that something had to give—despite the abundance with which he was blessed. He would either have to cut back his lifestyle or tap into principal and risk running out of money. He decided to reduce his annual withdrawal to $6.5 million. His art collecting slowed; his travels became less frequent; his charitable contributions less charitable. Bottom line: He started to feel pinched.

Despite the belt-tightening, at age 85 Mauricio found he only had $42.5 million remaining when the time came to replenish his matured portfolio with newly issued bonds. His luck couldn’t have been worse. It was January 2015 when the ten -year rate hit 1.81% and Mauricio had to face the reality that his remaining principal would generate taxable interest of just $766,000 each year! Still healthy and active, he found himself a victim of his own loss-aversion, severely set back by the Fed’s Zero Interest Rate Policy (ZIRP). His was an almost unbearable dilemma: Accept more austerity by further shrinking his lifestyle, family and charitable giving (and start to sell off his beloved art collection) and still face possible depletion at age 95—and/or chase higher yields by taking on more risk.


A Shadow Banking Crisis

Mauricio’s dilemma is the same one that has faced all savers since the Great Recession of 2008 [and we are seeing it again now, during the current 2020 crisis]. Low yields pressure you to turn to a subset of “shadow banks” for greater returns.

Like the big commercial banks, the shadow banks are financial intermediaries. Unlike their commercial counterparts, they are not “cash depository” institutions; they are neither able to borrow from the Fed’s discount window in a crisis nor insure your account for up to $250,000. Some of the shadow banks—the ones of interest to us as investors—specialize in the issuance, custody and trading of non-cash financial instruments known as stocks and bonds. These institutions include the investment banks, broker dealers, money management firms, mutual fund companies and hedge funds that comprise the Wall Street community.

The Wall Street subset of the shadow-banking universe provides no guarantees. On the contrary, like commercial banks they commerce in risk—offering returns arguably great enough to compensate for the possibility of “capital impairment,” i.e., financial losses, temporary or otherwise. The Wall Street shadow banks earn money by exposing your cash to risk and trading their own.

Transforming Savers into Investors: [Stocks and Bonds] 

When buying a bond, you’re lending money to a government or business in return for an interest payment over a given period of time, at the end of which you expect to be fully repaid. Like lending to a bank when you make a deposit, you are giving the borrower the use of your money for a price. Bonds come in a myriad of forms, offering claims against the borrower’s assets in the event of default based on the specific terms of the loan set forth in their respective indentures. If a secured borrower defaults, you may claim against its assets for repayment and you may come before other types of creditors. The less risk incurred in making the loan—i.e., the more credit-worthy the borrower—the lower the interest offered. When held to maturity, the interest payments over time comprise your yield. Their steady cash flow stabilizes their value, so in terms of price, bonds tend to be less volatile than stocks.

Buying a share of stock represents an incident of ownership, or equity, in a business. Stocks have no maturity date; you own them until you decide to sell them. Their payouts come in the form of dividends made at the discretion of management—both in terms of magnitude and periodicity. Some years you may get more, some less, and some none depending on the company’s operating profitability and other financial circumstances.

Among larger, mature dividend-paying US companies, dividends reflect about 50% of annual earnings. Dividend flow as a percent of the share price you paid is a critical component of stock ownership, sometimes amounting to 40% of the total return earned over time. But as an owner, you are taking the risk of total loss in the event of business failure because you are at the bottom of the capital stack, and lenders get paid first. Risk of total loss is balanced by the potential for greater reward in the form of price appreciation.

Company growth tends to be reflected in a rising share price, offering the potential for a gain on the capital you invested in addition to the dividend yield. These two components—dividends and gains—make up the “total return” potential of your invested capital.

Importantly, stocks tend to be much more volatile than bonds in terms of price.

The Wall Street brokerages buy, sell, hold and trade securities (including stocks and bonds) for their customers’ accounts. Wall Street dealers also own stock and bond inventories to facilitate customer transactions and earn proprietary trading returns.

Broker/dealers do both. The money center commercial banks, like Bank of America, have wealth management arms that are their broker/dealer affiliates, like Merrill Lynch.

Like the global economy, the investment business too is always evolving. Traditional stockbrokers can execute customer orders or make recommendations considered suitable based on their knowledge of the client’s risk tolerance, investment objectives and time horizon. Fee-based portfolio managers at mutual fund companies, money management firms, and hedge funds usually require a free hand to buy and sell securities on a client’s behalf, so handing over discretion to the portfolio manager is often mandatory. Commission-based brokers at the big bank “wire houses” and other execution-based brokerage firms typically require a client’s consent to a trade before its execution.

Trading for Trading’s Sake

With or without discretion and whether commission- or fee-based, the buying and selling of securities encapsulates the raison d’être of the Wall Street shadow banks, and securities trading is their lifeblood. But trading for trading’s sake tends to invite speculation and receives criticism from buy-and-hold investors who tend to be more analytical and systematic.

Beginning in the late 1990s, stockbrokers took on the title “financial advisor” when the big wire houses shifted from a commission- to a fee-based revenue model and wanted to exude a more knowledgeable, caring and comprehensive approach to customer service. Fees are a steady income source that levels out brokerage-firm cash flow, so most firms prefer them to the less consistent flow derived from broker commissions.

Trading is a win/lose proposition that pits buyers and sellers against each other, with both sides seeking an advantage. Buyers want to spend less and sellers want to get more for their securities. Traditionally, investment securities are valued—or priced—based on specific free -market fundamentals. For bonds, the key metric is “yield,” or the cash flow they generate. Yield translates into price: the lower the yield an investor is willing to accept, the higher the price that investor is willing to pay for a bond—the standard of “fixed income” investments.

Bonds reflect the forces of supply and demand in capital markets. If borrowing demand is high and money supply is low, the cost of money naturally rises and borrowers offer higher yields in the form of interest on the debt they issue. If money supply is plentiful and loan demand soft, lenders are likely to accept a lower rate for putting their surplus cash to work. In a free market, the forces of supply and demand naturally find equilibrium.

An important concept that retirement investors need to understand is that underlying Wall Street’s advice is a narrative that can give rise to exaggerated expectations and a methodology that can ultimately cause your undoing. Rather than buttressing the retirement process, the conventional principles of diversified investing, applied to retirement portfolios, may actually reduce portfolio reliability. Investing in securities at the wrong times and under adverse conditions can increase the odds that you run out of money; if you do make poorly timed decisions, then protecting yourself and improving your probability of success require you to self-impose austerity from the moment you start spending down.

The Wall Street Retirement Portfolio

The “balanced portfolio,” which can sometimes over-weight stocks and at others over-weight bonds, has become Wall Street’s signature retirement planning product. Applying Modern Portfolio Theory (MPT), it diversifies among stocks and bonds along an efficient frontier of return per unit of acceptable risk. A 60-40 stock/bond mix is deemed suitable by regulatory authorities for most individuals with median risk tolerance, so an advisor or firm can rarely be faulted for recommending it, even if an outcome falls into the rare extreme of return distribution. If the S&P 500 Index historically averages 10% growth per year and the UST 10-Year averages 5%, then a 60%/40% stock-bond portfolio can be expected to average 8% going forward, goes the oft-repeated incantation.

While the exact composition of each asset class may differ somewhat from firm to firm, most Wall Street customers end up with remarkably similar “investment policy” portfolios in terms of allocation, downside risk exposure and upside potential.

Projecting future returns based on historical averages is known as “deterministic” modeling. It is a form of linear forecasting wherein expected returns do not vary over time—and that’s its key flaw: the average return is most likely the one return an investor will never receive. Thanks to the increasing availability of computer power, “stochastic” modeling has grown in popularity. Applied to statistical sampling, stochastic modeling incorporates randomness. It has been tailored to retirement planning in the form of Monte Carlo simulations, named by one of its original developers after his favorite pastime—calculating the odds of winning at the casino.

In Monte Carlo computer software, returns and inflation are treated as random variables. Monte Carlo “engines” generate thousands, tens of thousands or even hundreds of thousands of possible combinations that produce a probability analysis, i.e., a statistical range of outcomes reflecting the financial impact of various return sequences. Now the standard retirement “modeling” tool, it perfectly captures the Wall Street approach to securities-based retirement planning by surrendering to uncertainty and accepting the necessity of playing the odds.

Changing the input assumptions and the type of mathematics used in a given Monte Carlo engine can materially alter the results. Critics focus on this subjectivity, which they claim introduces bias into the design. Mathematician and financial advisor James Otar, CFPTM, argues that the methodology tends to overstate the probability of favorable outcomes, giving clients a dangerously ex-aggerated sense of security.

Leading researchers in retirement-income planning have recently published seminal studies that address these issues, with some surprising conclusions. Working together, professors Wade Pfau, PhD and Michael Finke, PhD, of the American College of Financial Planning, along with David Blanchett, CFA, CFP, head of retirement research at Morningstar Investment Management, tested the 4% Rule under historic return assumptions and then under forward-looking assumptions, illustrating the possibility of Shiller CAPE-based lower returns.

The group confirmed that based on historical data (stocks returning 12%, bonds returning 5% and a CAPE ratio of 16), a portfolio allocation to stocks of roughly 15% or more would have likely achieved a 90% probability or better that a portfolio would survive thirty years paying out 4% adjusted for inflation.

But if future expectations are lowered based on current interest rates (bonds at 2.5%) and the reduced stock returns predicted by today’s above-average CAPE ratio—even if lowered only modestly—the odds of success plummet, barely exceeding 50% no matter how high the stock allocation!

This industry-standard Monte Carlo probability analysis conveys a stunning implication: Using forward-looking assumptions, Bengen’s “the more stock the better” equity recommendation for portfolio reliability may be overstated. Given reduced future returns, it may even court disaster, driving the odds of 60/40 portfolio success down to 56%—or little better than a coin toss.

Figure 34. Projected Success Rates

Looking ahead based on lowered return expectations, Blanchett, Finke and Pfau questioned how a 90% (or higher) probability of portfolio success can be sustained. The answer: Only by reducing the [retrirement] withdrawal percentage in inverse ratio to the equity allocation; in other words, the higher the ratio of stock held in a portfolio, the lower the safe withdrawal rate you should use and the less income you should take.

Chapter 6 Takeaways

  1. Investing involves risk, including, in the worst case, a total and permanent loss of your principal. Past performance is no guarantee of future results. Neither asset allocation nor portfolio diversification guarantee profit or protect against loss in a declining market. Bonds are subject to interest rate risks. Bond prices generally fall when interest rates rise.
  2. The projections or other information generated by Monte Carlo analysis tools regarding the likelihood of various investment outcomes are hypothetical in nature. They are based on assumptions that individuals provide, which could prove to be inaccurate over time. Probabilities do not reflect actual investment results and are by no means guarantees of future results. In fact, results may vary with each use and over time.
  3. It is advisable to understand the risks, rules and ratios embedded in the financial dynamics of modern retirement if you want to avoid failure—regardless of how much money you have at the start.
  4. Former Fed Chairman Ben Bernanke’s “new normal” of very low interest rates has turned many yield-starved savers into return-chasing speculators.
  5. Given current market valuations, the Shiller CAPE and other historical market metrics caution that equity returns over the next ten years or more may be lower than long-term averages might lead us to expect.

Questions for your financial advisor

  1. Do you rely on a Monte Carlo “tool” to project the probability of my (our) retirement success, and does that mean you can manipulate its mathematical assumptions to reflect better or worse outcomes?
  2. Do you counsel your clients to trust that the future is going to be rosy, or do you recommend they plan to withstand the worst while hoping for (and positioned to participate in) the best?
  3. If I’m nearing or in retirement, what initial withdrawal percentage would you recommend to set a floor for distributions from my nest egg?
  4. How did the balanced portfolio you’re recommending perform peak to trough, i.e., from October 2007 to March 2009?
  5. If we get a repeat of that performance at any time over the next ten years, what will it mean for my (our) withdrawals and standard of living thereafter?



If you would like to discuss your personal retirement situation with author Nahum Daniels, please don’t hesitate to call our firm, Integrated Retirement Advisors, at (203) 322-9122.

If you would like to read RETIRE RESET!, it is available on Amazon at this link:

What I Wrote In Chapter 3 of Retire Reset!


by M. Nahum Daniels


If you’ve been wondering about the book I wrote, RETIRE RESET!, we are publishing some excerpts right here on our blog so that you can learn more. Along the way, you will learn why our firm, Integrated Retirement Advisors, was founded: we’re on a mission to help people with retirement!

Here are some excerpts from Chapter 3.


Chapter 3: TIME IS MONEY

Retirement clock management begins with the very first questions posed in the planning process: “When can I (afford to) retire? Can it be sooner, does it have to wait until later or will it be never? And by the way, how long should I expect my retirement to last?”

When a husband and wife aged 65 first visit with me and they’re in reasonably good health, I have to inform them that, statistically, one member of the pair (usually the female) has a 50% chance of making it to age 94 and a 25% chance of making it all the way to age 98. And if she makes it to 98, she has a 50% chance of making it all the way to triple digits, because actuarial science informs us that the longer we live, the better our odds of further survival.

When urging clients to get proactive about their long-term financial planning, I often relate the remarkable story of Dr. Ingeborg Rapoport. It brings home not only the indomitable power of the human spirit, but also the truly amazing advances in human life expectancy that have been achieved over the last century—and continue to be made with increasing velocity.

Dr. Rapoport had already been retired for thirty years when Hamburg University authorities finally gave her a chance to complete her doctoral degree—but only after following all the rules. She would have to stand for an oral exam, questioned face to face by a panel of academics, to defend her original dissertation on diphtheria. The dissertation had been well received when she first submitted it at the tender age of 25, but she was blocked by the Nazi regime from completing the process because her mother was Jewish. Although she went on to enjoy a professional career in neonatal medicine she always felt unfairly deprived and, after 77 years, wanted to right what she felt was an injustice.

Now nearly blind, it was only with the help of friends that she was able to catch up on developments in diphtheria studies during the intervening decades. Dr. Rapoport passed her exams with no age-based indulgences and was finally awarded her degree in 2015, becoming the oldest person ever to be awarded a doctorate, according to Guinness World Records. She was 102.

And that’s the point: Underlying successful retirement planning at any age today is an appreciation of contemporary developments in longevity. No matter your starting point, if you’re in reasonably good health you’re advised to play the long game.


Most retirees are naively complacent about longevity risk

The wealthier and better educated the individual, the more life expectancy improves. If, as frequently happens, one spouse turns out to be 10 years younger when the primary earner reaches full retirement, then to be prudent we should be planning for a 45-year joint cash flow—ideally adjusted for inflation to preserve its purchasing power.

Portfolio design follows on from that core purpose. Thus, our first objective is to figure out how to guarantee a lifelong cash flow to replace previously earned income in amounts sufficient to match your expenses.

In an inflationary environment, time reduces money’s worth and therefore accelerates its use. In a deflationary environment, time enhances money’s worth and defers its use to another day when it will buy more. The longer the time horizon in which these forces play out, the more pronounced the antagonistic outcomes. Thirty years of inflation at 3% results in a 60% loss of buying power; three decades of compounding 3% interest can produce a 140% increase in buying power. That’s a 200% spread, making this a battle that is absolutely worth fighting.


Sequence of returns risk

If you think that an “average return rate” tells you anything about retirement investing, you haven’t seen the effect that sequence of returns can have on a portfolio.


Figure 10 illustrates S&P 500 total returns generated over the 20-year period from 1989-2008. The average return over the period was 8.43%. The first thing to notice is that no single year actually produced a return equal to the average; returns ranged from losses as great as -37% to gains as high as +38%. If we reverse the sequence, the average annual return remains the same.

Figure 11 shows what happens when a retiree starts pulling money out of their portfolio at a rate of 5% per year for retirement income. The clockwise sequence (based on S&P 500 from 1989-2008 from Figure 10) left a theoretical retiree with a $3.1 million asset pool at the end of twenty years available for spend-down over the next 20; the counter-clockwise sequence would have left the same retiree with a miniscule $235,000 that would have to be stretched over a decade or two!


Chapter 3 Takeaways

  1. Retirement planning starts with assuring that your nest egg (with or without inputs from other income sources) serves as a personal pension guaranteeing you the paychecks you’ll need for 30-40 years after you stop working.
  2. As an investor, you need to understand that time is of the essence and that playing the long game means hedging against numerous long-term cyclical risks decades in advance of their possible impact.
  3. Once you begin to spend down, retirement success depends more upon the sequence of returns you earn than the annual magnitude of those returns.
  4. To make your nest egg last for the long run, best practice is to focus on avoiding sharp losses rather than seeking high returns.
  5. True compounding will yield a more predictable outcome than the generation of random market returns that can offset each other, reduce the net result to zero (or less) and waste your precious time.



If you would like to discuss your personal retirement situation, please don’t hesitate to call our firm, Integrated Retirement Advisors, at (203) 322-9122.


If you would like to read RETIRE RESET!, it is available on Amazon at this link:



Rethinking Your Retirement Investing To Hedge Against A Market Downturn


Rethinking Your Retirement Investing To Hedge Against A Market Downturn

Studies show most Americans aren’t saving enough for retirement. A recently-released World Economic Forum report warned that most retirees risk running out of money as much as a decade before death. And the anxiety of being ill-prepared for the golden years can grow when portfolios do not, leading some advisors to recommend over-weighting stocks to provide the impetus for long-term growth.

Retirement planner Nahum Daniels thinks the risk-reward trade-off of investing a retirement nest egg in stocks and bonds can result in even more worry. And, given a bad sequence of returns -coupled with the fact that people are living longer than in previous generations -many retirees could run out of money faster.

“Psychologically, we’ve grown confused about the financial dynamics of retirement,” says Daniels (, author of Retire Reset!: What You Need to Know and Your Financial Advisor May Not Be Telling You. “Since the early 1990s, when the 401 (k) replaced the defined benefit plan in corporate America, there’s been a fundamental shift in perception. When retirement was pension-based, planning was about guaranteed income and the employer had to keep the promises it made. Today, participants in 401 (k) plans have to know about stocks, bonds and ‘Balanced Portfolio’ management because they’re responsible for their own unpredictable outcomes.

“Ironically, centering a retirement portfolio on Wall Street’s securities-driven risk/return tradeoff may actually be a formula for an even more insecure retirement. The reason is the cyclical volatility inescapable in equity markets. Nor are bonds immune from losses: The Fed’s rate manipulations, coupled with our nation’s current $75 trillion debt overhang, introduces an abnormally high level of volatility to bond prices. The real crisis in retirement planning is not just our savings shortfall but our misguided mindset; we need a perceptual shift about what our real goals are and a tactical reset to reach them.”


Daniels offers four principles to reset a retirement portfolio and hedge against a market downturn:

  • De-risk. Whether in the accumulation or spend-down phase, the retirement nest egg cannot afford market losses without eventually paying out less. “Insulate your nest egg from them and guarantee the outcome when you can,” Daniels says. “It’s unnecessary to resign yourself to self-imposed austerity to accommodate market volatility.”
  • “Size your nest egg as efficiently as possible by optimizing the sustainable yield it can generate,” Daniels says. “Work it back from your income need. For example, if your nest egg supports a withdrawal rate of 5 % rather than 3%, you can achieve your goal with 67% less capital.”
  • Daniels says the latest academic research favors the integration of actuarial science with investment expertise in the construction of a “stable-core” retirement portfolio. “Longevity insurance has a heightened economic value in an era of open-ended life expectancy,” Daniels says, “while historically no asset class beats equities for long-term growth potential. Balancing the two is key to getting the best result and hard-boiling the nest egg.”
  • “Today’s fixed index annuity (FIA) lends itself well as the actuarial component of a retirement nest egg,” Daniels says. “Anchoring a stable-core portfolio to it can protect against market declines while still participating in a needed share of upside potential.”


“Buying and selling securities at all the wrong times can increase the odds that you run out of money,” Daniels says. “Retirement investors need a form of protection that can keep them invested without costing so much that it devours their return in the process.”


About Nahum Daniels

Nahum Daniels ( is the founder and chief  investment officer of Integrated Retirement Advisors, LLC. He is the author of Retire Reset!: What You Need to Know and Your Financial Advisor May Not Be Telling You. A Certified Financial Planner and Retirement Income Certified Professional, Daniels has served mature investors for over 30 years.

Retiring at 45, the opportunities and the pitfalls



Even retiring in our mid-sixties today poses unaccustomed challenges revolving around our unprecedented longevity–the increasing odds that we might live deep into our mid-90s or even beyond–and our psychological tendency to electively compromise our lifestyles once we stop earning income out of fear of spending too much too soon and running out of money.  So if a thirty-year retirement is bedeviled by these factors, think about a 50-year period extending from age 45!


It’s crucial for anyone seriously contemplating early-retirement to make a study of the complex psychological and financial dynamics involved, or work with an advisor who has.  Most of us don’t know what we’re up against in modern retirement, and that goes for untrained financial professionals as well as clients.  True, it’s an opportunity for extraordinary self-realization but it’s also rife with the risk of financial ruin no matter how much money we may start with.


The “early retirement” planning process really needs to start at the “back end” with a vision of the lifestyle desired.  A new profession of retirement coaching has emerged to assist people in finding meaning in retirement no matter when it might start.  I call this aspect of retirement planning its “soft” side to distinguish it from the financial dynamics; I refer to them as retirement’s “hard” side.  The two are intertwined.


The process of planning a meaningful retirement isn’t “one size fits all ” In financial terms retirement can come in small, medium and large.  How much you’ll need to accumulate, and in what vehicles, will be determined by the cash flow you’ll need to sustain your envisioned lifestyle.   Is your goal to escape the grid and live the single life of adventure or is it to be a high-profile head of household educating your children and practicing communal philanthropy to make the world a better place?  It’s essential to start with your vision of a meaningful life freed from the need to work and earn.  Keep In mind, though, that “meaning” can be expensive to sustain.


Obviously, living on $50,000, adjusted each year for inflation, requires a much smaller nest egg than living on $500,000 or $5 million.  Once you settle on the cash flows you’ll need, you can size the income-producing nest egg required and focus on its core portfolio construction. The more income you can generate from your nest egg–the higher its yield and the more reliable its duration–the more efficient its construction can be and the less capital you will need to get the job done.  This frees up other capital to satisfy your risk appetite or philanthropic intent.


To retire early you will want to start saving and accumulating whatever capital you will need as soon as you have a clear vision and a declared objective.   If it’s to last a lifetime, the nest egg needs to be de-risked to avoid untimely market losses that could prove hard to recover.  Better to position your income-dedicated retirement portfolio to compound safely over time.  Smoothing returns and avoiding losses is key to portfolio design; we believe you should look for financial instruments that can guarantee the outcome.  Next-gen longevity insurance can play a stabilizing role in the nest egg.  Linked to the underlying markets, Its new varieties offer downside protection together with a reasonable share of upside potential both before and during retirement.  We use them extensively in constructing our “stable-core” retirement portfolios.


That’s because losses incurred in retirement planning can undermine even the most consistent effort.  Market risk should be hedged and minimized if not totally avoided.  Taking on uncompensated risk is anathema.


In fact, retirement at every stage is an exercise in risk management.   Risk sensitivity is accentuated the earlier you start and the closer you get to the goal line.


Avoiding depletion is like walking a tightrope.  Success is not dependent on how much wealth you start with; it’s more a factor of the ratio of your spending in retirement to your dedicated retirement capital.   Study the concept of the “safe” withdrawal rate and figure out a way to exceed it without prejudicing your ultimate success.  Getting good advice on how to do that may even be worth paying for.


Unless your income goals in retirement are modest, it’s hard to save enough out of one’s wages to build an adequate nest egg no matter how early you start, especially if you have a spouse and family to feed, house, clothe and educate.  Starting a successful business or owning shares or stock options in a start-up that ultimately gets acquired or goes public are more often the sources of wealth creation among age-45 retirees.  A carried interest in a real estate or financial firm—a share of the profits—can be another path to early riches.


Ironically, while risk taking is often the source of early-retirement wealth, the nest egg itself should be hedged and protected.  In our practice we go further and recommend insuring it for higher initial yield and longevity guarantees that can survive an individual issuer that may go under.


Retiring early only accentuates this ever-present dialectic that characterizes a retirement that, if starting at 45, can last far longer than your work life.


Pros and Cons of Borrowing from your 401k Plan account


The advisability of taking a loan from a 401k plan account is always a facts-and-circumstances determination. And like any tax-related decision that affects retirement success, it can get very complicated. So my first advice to anyone seriously contemplating this move is to get professional help from an accountant and/or financial advisor.  Questions like these make it a good idea to have one or the other to turn to.


  1. Perceived financial urgency is the reason most people resort to their pre-tax 401k savings. Needing money for an emergency or an economic opportunity seen as time-sensitive, with no other resources conveniently available, is the driving motivation for most people.  It’s almost always better to use after-tax savings for such contingencies, but if there aren’t enough—or any—the situation leaves little choice. The first proposition to test is whether the perception of urgency matches reality.


  1. The biggest advantages of using the 401k account include relative ease of access ( if the plan’s provisions even permit loans usually up to half the vested balance with a max of $50,000, it’s not a given although most do) and interest rates of prime plus one (tough to beat at a bank or on a credit card balance!). Borrowers can also find solace in the idea that they are paying interest to themselves.


  1. The reality of the loan’s full potential effects are more complicated. The regulatory five-year payback terms have to be honored; if the loan defaults income taxes become payable on the unpaid balance and if the borrower is under 59-1/2 at the time of default a 10% premature withdrawal penalty can take an additional bite. If you change employer or get laid off during the five-year payback, the loan balance becomes fully payable within 60 days.  And even when the terms of the payback are fully honored, you’re using newly-earned after-tax dollars to repay a loan of pre-tax money that you will be taxed on AGAIN when you withdraw the funds in retirement. In other words, you’re turning tax-deductible dollars into doubly-taxed dollars (surprise!) so you should have a really compelling reason to do it.  Not to say they don’t sometimes come into play.


  1. Savers who withdraw money from their 401k accounts are also losing exposure to the long-term return potential of stocks and bonds. Depending on the investor’s time horizon, that could impose a tangible opportunity cost, especially on younger plan participants who can theoretically better tolerate market volatility.  The long-term impact of reduced returns can have a devastating impact on accumulation objectives. As they say, investing success isn’t based on “timing” the market but “time in” the market.  Missing exposure to a bull-market phase of a full market cycle can leave a long-lasting deficit the full effects of which won’t be apparent until actual retirement.


  1. Tax rates are always changing and are very unpredictable. Logically, you want to contribute to your employer plan when tax rates are high, to legally avoid them, and withdraw the money you’ve accumulated when tax rates are low, to end up with more spendable income. The current tax regime has lowered tax rates for most Americans.  Who knows what the rates will be decades in future.  The best general advice may be not to rock the boat unless the urgency you perceive is very real and you have no alternative.

Retirement Investing


Retirement Investing

Although we’ve been led to believe otherwise, retirement investing should not be defined in terms of the “total return” approach embodied in Wall Street’s “balanced portfolio” of stocks and bonds.

While suitable for institutional investors with very long time-horizons that can eventually absorb and recover losses, the retirement “nest egg” should be constructed to generate income to last a lifetime rather than to out-smart the market by out-performing its averages. That’s a very different design goal that requires a very different approach to portfolio construction—even in the best of times.

Market volatility and losses undermine a retirement portfolio’s yield or, in the lingo of the industry, its sustainable withdrawal rate. Earlier studies posited 4% as a “safe” rate of withdrawal (adjusted annually for inflation) that limited to 10% the odds of running out of money after thirty years. With the growing  prospect of outliving a 30-year retirement and with markets priced at historically high valuations on a dozen of metrics, retirement academics have tested the norms and have concluded that today  the prospect of future losses limits a “prudent” withdrawal rate to 2.8% if you want to minimize (but still not completely eliminate) the risk of premature depletion. That means you will need 43% more capital at inception to get the same result.


Of course, retirees may choose to withdraw what they need from their nest eggs (most do) and only tighten their belts later when market trends make it necessary. Or they may simply risk premature depletion (every retiree’s worst nightmare) figuring they’ll end up depending on the state or their children in later years or, if they’re lucky, dying before the piper must be paid.

So whether in the short term or the long term, retirement-portfolio losses that are unlikely to ever be recovered will require sacrifice in the form of lifestyle compromises. Hence the first rule of nest-egg construction is to avoid them. The challenge is to devise an efficient nest-egg portfolio with zero downside risk that doesn’t also abandon the potential for needed growth.

In our practice, we often overweight the fixed index annuity (FIA) to serve as the anchor of a “stable-core” strategy. Leveraging actuarial science, the FIA can yield considerably more from the outset than a balanced portfolio, especially weighed against a “prudent” 2.8% “safe” withdrawal rate, and its cash flow can be guaranteed to last a lifetime or two, no matter how long, eliminating the ever-present dread of depletion often endured by even affluent retirees. In addition, the annuity’s investment methodology protects principal against market declines while still participating to capture a reduced share of upside potential.  The latest academic research in retirement portfolio construction favors this integration of longevity insurance with investment expertise.  That’s why this relatively new hybrid is trending today and worth a careful evaluation.

If you have any questions about your own retirement plan, please reach out to us for a no-obligation consultation. You can reach Nahum Daniels, Integrated Retirement Advisors in Stamford, CT at (203) 322-9122. We look forward to working with you.

Retire Reset! Chapter 2: The Haunting


By Nahum Daniels, CFP®, RICP®


If you’ve been wondering about the book I wrote, RETIRE RESET!, we are publishing some excerpts every month right here on our blog so that you can learn more. Along the way, you will learn why our firm, Integrated Retirement Advisors, was founded: we’re on a mission to help people with retirement! Here is an excerpt from Chapter 2.


I remember my surprise when I showed up to deliver a retirement seminar at a Connecticut country inn early one morning in the spring of 2009 to find a well-dressed Japanese couple sitting keen and alert in the very front row. While many people of Chinese, Korean and Indian descent had attended my presentations over the years, it was the first time for Japanese retirees. I secretly hoped they would request an appointment if only to share their experience as expats in the US and allow me to share my experience of living in Japan for a decade. They did, and at 10:00 am the following morning, Mr. Matsuda appeared—self-conscious, and without his wife. Aware of the custom of Japanese housewives controlling the purse strings, I confess to having been disappointed. I soon learned why they weren’t together, though, as Mr. Matsuda unburdened himself, telling me a tale that has haunted me ever since.

A Cautionary Tale

Recently retired from a major Japanese trading giant with a large New York presence, Mr. Matsuda had been living with his wife of many years in a Connecticut suburb where they raised and educated their two grown children. He graduated from a top Tokyo university and had spent his entire career as a loyal sales executive for that one firm. His wife had dutifully followed him to the States over twenty years earlier, during Japan’s booming mid-80s global expansion, to help further his career. But their relationship had grown rocky, not because of any unhappiness with America, but because of a poorly timed investment they made with her family inheritance.

After watching the Nikkei Industrial Index climb fourfold to nearly 40,000 between 1984 and 1989, Mr. Matsuda persuaded his wife that they had waited long enough for confirmation; it was time to invest in Japan’s economic prowess and surging global dominance. They had already missed the run-up from 10,000 when they could have quadrupled their money and owed it to themselves and their family to get on board the 21st Century express. So, despite the unprecedented valuation levels reached by the market’s index-leading stocks (price/earnings ratios well over 100x) and a sudden tightening of interest rates initiated by the Bank of Japan to protect the Yen, the Matsuda’s decided in late 1989 to invest Mrs. Matsuda’s $1 million inheritance—a disproportionate share of their nest egg—into Japan’s world-beating stock market. To their chagrin, and like many retail investors, they got in at just the wrong time.

Less than a year later, the bubble had burst, and the market was down 50%. Shocked, but disciplined and anticipating a rebound, they decided to stay in stocks for the long run. A relief rally to 26,000 ensued but was short-lived. They were patient, enduring the market’s ups and downs, and a rebound finally came when the market almost doubled from under 9,000 in 2003 to almost 18,000 in 2007, rekindling hope of a potential climb back to previous levels. Then came the global financial crisis. Between late 2007 and early 2009, the Nikkei average fell again by 56% to a new low of 7,428. Down 80% over 20 years, their $1 million nest egg was now worth $200,000: it would have to quintuple for them to (nominally) break even. Now older, Mr. Matsuda had recently retired on a pension nowhere near what he had been previously earning. Thinking about their long life expectancy and facing an extended retirement, the Matsuda’s were beside themselves with anxiety. That’s when they attended my seminar.

While they showed up at the inn together, it was only after Mrs. Matsuda had already read her husband the riot act. Because simply seeing his face reminded her of their financial calamity, she told him, Mrs. Matsuda declared Mr. Matsuda persona non grata in their home from 6:00 am to 6:00 pm every day. He was required to make himself scarce during the hours he would have previously been at work, so his new retirement lifestyle took the form of roaming the streets to stay out of his wife’s line of sight. Like millions of other Japanese back home, he was learning to vanish, coping alone and under the radar with the shame, despair and grief that can accompany financial calamity and tear families apart. And that saga explained Mrs. Matsuda’s absence.

At this writing, it’s almost ten years later, the Matsuda’s have since returned to Tokyo, and after nearly thirty years they watch as the Nikkei nears 22,000, just over halfway back to their entry point. Forty-five years old in 1989, they are now in their mid-70s, still waiting and hoping that their patrimony will be restored someday for their children, at least, if not to make their own retirements more comfortable. That remains to be seen. In the meantime, they have had to live with the effects of Japan’s economic stagnation—including depressed asset values—for the bulk of their adult lives.

The Matsuda’s experience has indelibly shaped my approach to retirement planning. I salute Mr. Matsuda for opening up about his predicament to me—a perfect stranger. Most of all, I am profoundly grateful to both of them for putting a human face on the lasting emotional trauma and interpersonal dislocation that can be inflicted by a shocking market crash followed by a decades-long drawdown. Grinding market losses like these can have wide ranging psychological as well as economic effects. Families—multiple generations—can be affected. Dreams crushed. Moods darkened. For me, their experience underscores that retirement portfolio planning has wide-ranging ramifications beyond mere percentage gains and losses and how important timing and loss avoidance are for ultimate success. Alas, good timing is often the result of sheer luck, while a proper respect for risk requires an accurate understanding of the mathematics of loss.

Chapter 2 Takeaways 

1. Indices are unmanaged, and investors cannot invest directly in them. Unless otherwise noted, performance of indices does not account for any fees, commissions or other expenses that would be incurred. Returns do not include reinvested dividends.

2. The Japanese economy was stopped in its tracks by the age wave and to date no amount of financial engineering has been able to revive it.

3. As a consequence, the Japanese people have suffered almost three decades of lost economic opportunity—foreshadowing the secular stagnation that may overhang all industrial nations today, including our own.

4. Starting in late 1989 Japan’s Nikkei 225 Industrial Index crashed 80% and, at this writing 28 years later, has recovered just over half its peak value, even after repeated BOJ interventions.

5. A lengthy market downturn can happen here too, and has: It took the Dow Jones Industrial Average over 26 years to recover after the crash of ’29, undermining many investors who retired relying on stocks.


If you would like to discuss your personal retirement situation, please don’t hesitate to call our firm, Integrated Retirement Advisors, at (203) 322-9122.

If you would like to read RETIRE RESET!, it is available on Amazon at this link:

Retire Reset! Chapter 1: Demographics Are Destiny


By Nahum Daniels, CFP®, RICP®


If you’ve been wondering about the book I wrote, RETIRE RESET!, we are publishing some excerpts every month right here on our blog so that you can learn more. Along the way, you will learn why our firm, Integrated Retirement Advisors, was founded: we’re on a mission to help people with retirement! Here is an excerpt from Chapter 1.



The Transcendent Issue of the 21st Century

When closely examined, the retirement challenges we face as a society are actually much more complex than they first appear. The mainstream media skate along the surface, pointing to long-lived baby boomers with inadequate personal savings looking to a fragile if not insolvent social security system unable to make up the difference. All true. Upon deeper analysis, though, it turns out there’s even more to the problem, including slowing population growth, shrinking consumer demand, exploding debt, inflated financial bubbles in the stock and bond markets, deflationary wage and employment pressures and over-spent governments at odds with their own citizens. Without understanding the surprising connectivity of these global forces it’s hard to appreciate the magnitude of the tsunami they may be forming.

The headwinds we face are driven by a sea change in domestic and global “demographics,” or the ratio of different age groups in society. With fertility rates falling and longevity rising, the industrialized world is entering an unprecedented era of hyper-aging. As a result of modern medicine and improved hygiene, global life expectancy has improved dramatically over the last 50 years and Americans are living longer than ever before. According to data from the Centers for Disease Control (CDC), average US life expectancy has rocketed from 47 to 79 over the past hundred years. What’s more, our fastest growing age groups are the octogenarians and nonagenarians. In its latest report “The Older Population in the United States: 2010-2050” the Census Bureau predicts that over the next three decades the number of people in the U.S. over the age of 65 is expected to double while those 85 and up (the “oldest old”) will triple. This may be good news for baby boomers who stay vital, but it’s bad news for the survivability of the social safety net.

Of course, living a long, active, self-reliant life into our eighties or nineties can be a blessing, a period of extended contribution and enriched meaning. Two of my most remarkable clients definitely feel that way. They make up a husband and wife team of medical doctors who treat patients, design and oversee innovative research, write books and lead international organizations. He just celebrated his 92nd birthday and she her 90th. They still work full-time and see no reason to pack it in, believing that their work is simply not done.

On the other hand, a long life characterized by infirmity, incapacity, and scarcity after a career of unsatisfying labor can feel like a curse. Whether a blessing or a curse, one thing remains true: longevity costs money.

Chapter 1 Takeaways    

1. In an unfortunate turn for baby boomers, the US economy is struggling to recover from of one of the worst downturns in generations.

2. With fertility rates falling and longevity rising, the industrialized world is entering an unprecedented era of hyper-aging aggravated by population decline.

3. Adverse demographics are believed to be at the heart of what some prominent economists refer to as “secular stagnation,” a long-term slowdown in economic activity, productivity and innovation that neither fiscal (tax) nor monetary (Fed) policies alone may be able to reverse.

4. In fact, tax increases and government benefit decreases may be forthcoming while life expectancy improvements result in a retirement that can last for 30 years or more.

5. Consequently, our personal nest eggs have taken on a level of importance they haven’t previously had, and how you convert yours into a personal pension is critical to your long-term retirement success.


If you would like to discuss your personal retirement situation, please don’t hesitate to call our firm, Integrated Retirement Advisors, at (203) 322-9122.

If you would like to read RETIRE RESET!, it is available on Amazon at this link:

Retire Reset! Introduction


By Nahum Daniels, CFP®, RICP®

If you’ve been wondering about the book I wrote, RETIRE RESET!, we are going to be publishing some excerpts from it every month right here on our blog so that you can learn more. Along the way, you will learn why our firm, Integrated Retirement Advisors, was founded: we’re on a mission to help people with retirement!

To get started, here is part of the book’s introduction:

“Whether you consider it a well-deserved reward for a lifetime of work or a liberating escape from unsatisfying employment, if you’re like most Americans you may be obsessed with the idea of retirement. I know many people who can’t wait to get started.

But the reality is that most members of the older generation today – the 76-million-strong age cohort born between 1946 and 1964 known as “baby boomers” – simply haven’t saved enough. According to a 2016 Price Waterhouse Coopers (PWC) survey, over a third of baby boomers have saved less than $50,000, and of those, most have saved nothing; another 13% have accumulated less than $100,000. Add up the numbers and it becomes clear that half of all baby boomers have less than $100,000 saved for a retirement that could last decades. Only 15% reported nest eggs north of $500,000. We shouldn’t be surprised, therefore, by the Social Security Administration’s 2017 report that 43% of retired singles and 21% of retired couples count on Social Security for 90% or more of their day-to-day living expenses. Clearly that’s a lot of pressure on our social safety net, and that pressure is growing relentlessly as 10,000 boomers enter retirement every day.

By 2030, as many as 76 million members of this one age cohort – almost 20% of our nation’s population – will have reached retirement age, collecting their social security benefits and drawing down their retirement savings in an attempt to maintain the lifestyles (or some semblance of them) to which they’ve grown accustomed. Given dramatic improvements in longevity, modern retirement could extend 30 years or more, which is a very long time to make money last, especially when it may be earning very little. The bottom line? Americans without savings or with very little will not be able to stop working without material compromise pretty much as soon as retirement begins. But even those who may have enough at the outset face the risk of losses that could impose compromises later. And that can be true regardless of how much money you start with if you ignore today’s rules and ratios as applied to retirement income planning, and/or simply run into bad luck.

Which brings us to what this book offers: an investment strategy for individuals with the wherewithal, willingness, and desire to accept personal responsibility for their financial independence in retirement. My approach is intended to help insulate your nest egg from crippling losses while enabling you to grow it and your income in good markets and bad.What I have found over a long career as a financial advisor is that many baby boomers lack the mindset and tactics to optimally leverage their wealth as they transition into and navigate retirement.

This book is intended to address that shortcoming by showing you how to construct what I call the “stable core” retirement portfolio. It’s a portfolio designed to withstand worst-case market scenarios while positioning you to participate in positive market outcomes. It’s income-focused and strives for simplicity as its primary objective. And it aspires to add even more value to your life by protecting you from some of your worst instincts (like buying high and selling low), freeing you from some of your worst fears (like running out of money), and in the end (i.e., during those golden years) enabling you to live generously, unafraid to share your good fortune with the people and causes you care about.

I’ve spent my career as a financial advisor testing this portfolio, observing its behavior under different market conditions, and comparing its performance to the alternatives.During the development process I continuously searched for different ideas and approaches to retirement portfolio construction. Trained in a broad range of investment methodologies and money management styles, I came to the discovery phase with no specific expectations. In fact, I like to think I brought a “Zen mind” to my quest, a non-judgmental beginner’s openness I first learned about as a young man living in Japan in the 1970s. I also brought a desire for simplicity, in the mold of the ancient Taoists who reduced all phenomena to an inter-play of only two antagonistic but complementary energies, the yin and the yang. These two cosmic forces form an integrated whole expressed in the myriad cycles of nature—and they infuse the financial world just as they do all other areas of life.

After decades of professional practice, it has become clear to me that in terms of retirement planning, the conventional mindset falls short. For starters, no matter how well it may have served you in earlier lifecycle phases, the traditional thinking simply doesn’t prepare you for what you’re up against. That’s because the challenges unique to retirement are not encountered in earlier phases of our financial lives; we don’t confront them until we are face-to-face, often with inadequate preparation and sometimes leading to irrecoverable losses. As we will find later on, losses can ruin even the best-laid plan.

In fact, financial success in earlier phases of life often ingrains investment concepts, expectations and biases that are actually contraindicated in retirement. These include some of the most fundamental precepts that underpin investment and retirement practice today, such as the importance of asset selection and portfolio balance, sustainable withdrawal rates and probability analysis. Among these ingrained biases, the most dangerous are complacency and overconfidence. Granted, optimism has its place in healthy human psychology, but it should not be a guiding principle in your retirement planning. Optimism in retirement planning simply isn’t prudent. I recommend that in ideal planning, a healthy wariness of the unknown should be cultivated.

Today, baby boomers are constantly bombarded with pitches emanating from the two poles of the money management industry. In my yin and yang vernacular, I call these poles “banking” and “insurance” and I intend to demonstrate that they are diametric opposites when it comes to retirement strategy and tactics. Put simply, the banking sector originates and transmits risk, and the insurance sector mitigates and absorbs it. I believe that for best results they need to be integrated, weighted properly to serve your specific retirement needs and objectives.


If you would like to discuss your personal retirement situation, please don’t hesitate to call our firm, Integrated Retirement Advisors, at (203) 322-9122.

If you would like to read RETIRE RESET!, it is available on Amazon at this link: