I had two letters to the editor published today by Advisor Perspectives.
I greatly appreciate your work in this piece. Using TIPS beats most other portfolio options for retirement income, but I don’t think it is the best one. You cite Zvi Bodie for the idea that “the primary goal in retirement is to ensure that one is not a financial burden to one’s children.” I agree. But then one needs to deal with longevity risk – a 30-year window is not enough to do that (especially since so many people fear running out of money so much – recent studies say they fear it even more than death). In my view, but for the wealthy, a solution offered as relatively “safe” (not to mention “simple”) requires the use of annuitization, perhaps in conjunction with a portfolio solution.
In response to Lance Roberts’ commentary, Boomers are Going to be a Real Drag, I wrote:
The Federal Reserve Bank of San Francisco’s “Headwinds” report and, as far as I’m aware, all of the reporting thereon, including Lance Roberts’ commentary, missed a 2009 CBO background paper on the same subject which comes to a different conclusion.
I’m not pitching which argument I buy, but the CBO piece ought to be part of the discussion.