Safety-First Retirement Planning

"Two fundamentally different philosophies for retirement income planning, which I call probability-based and safety-first, diverge on the critical issue of where a retirement plan is best served: in the risk/reward trade-offs of a diversified and aggressive investment portfolio that relies primarily on the stock market, or in the contractual protections of insurance products that integrate the power of risk pooling and actuarial science alongside investments. The probability-based approach is generally better understood by the public. It advocates using an aggressive investment portfolio with a large allocation to stocks to meet retirement goals. My earlier book How Much Can I Spend in Retirement? A Guide to Investment-Based Retirement Strategies provides an extensive investigation of probability-based approaches. But this investments-only attitude is not the optimal way to build a retirement income plan." Read more on the Amazon website about the contrast between "Probability based" and Safety first" approaches to retirement income strategies.

Probability based strategies rely on investing heavily in the stock market. A safety first approach is built upon a lifetime annuity to ensure income lasts as long as you do.

Dr. Wade Pfau is one of the most respected retirement researchers writing and sharing his wisdom today. His new book, Safety-First Retirement Planning: An Integrated Approach for a Worry-Free Retirement is available at Amazon.

Check out Dr. Pfau's list of important questions to answer for the three major types of annuity products.

https://www.advisorperspectives.com/articles/2019/10/18/safety-first-retirement-planning