Expert Articles on Financial Planning

Two years ago today, the Office of the Inspector General (OIG) released their report A-09-18-50559 which estimates that over 11,000 widows have been cheated out of more than $130,000,000 - an average of over $10,000 each .

Cashing out your 401(k) and using the proceeds to pay off your mortgage lets you borrow at a low rate and invest at a high rate and do so at no risk.

These days mortgages are financial and tax losers. If you have the cash to immediately pay off your mortgage, you can potentially make a bundle with zero risk.

You can't rely on Social Security to provide accurate information on your options. In my experience, over half of what Social Security staff tell people is either flat out wrong, incomplete, or misleading. But now I've come to lear that you can't even rely on Social Security's benefit statement to be accurate.

Over 4,000 people divorce each day in our country. Some do so after many years of marriage and in the context of very unequal spousal incomes. Such divorces often require alimony to achieve a fair settlement. The question is how much alimony should be provided and for how long? Economics and advanced software can help answer these questions.

Target date funds can be far off target. They can be far too risky when young and far too safe when old. The proper fiduciary default investment is TIPS (Treasury Inflation Protected Securities), not a target date fund.

Conventional financial planning uses two rules of thumb. One is the 70% replacement-rate, retirement-spending rule. The other is the 4% retirement-asset, spend-down rule.

As Kitces suggest, many if not most practitioners interpret the replacement rate rule of thumb as an income replacement rate. Interpreted in that light, this couple's replacement rate is not the vaunted 70%, nor the often higher 85% figure bandied about. Instead, it's zero or essentially zero in seven of the eight cases considered.

$75K sounds like a great starting salary for a college grad. It's surprisingly not, especially if we're talking making it in LA.

Expected Utility Maximization figures out how aggressively or cautiously you should spend and invest your money to produce the highest lifetime happiness averaged over all the different living standard paths you may experience.

Optimizing retirement outcomes means funding the highest standard of living, both before and after retirement, with a smooth transition in between. Planning for that economics-based outcome, known as “consumption smoothing,” is computationally intensive. But a recent technological breakthrough, which does that smoothing using uncertain asset returns, gives advisors a tool that improves portfolio choice.

These days mortgages are big enough financial and tax losers that you can potentially do better paying them off than contributing to your 401(k)!

The coronavirus is scary enough, but for far too many of us, it's becoming a financial nightmare.

We're in the worst economic downturn in our nation's history. Everyone is being financially impacted. But there are secret ways to survive financially.

You can go from house poor - spending too much or at least more than you'd like on housing - to becoming house rich and you don't necessarily need to downsize your home to extract more value from it. In our case, we upsized our home while still netting a big sum.

Here's another stomach-turning story of Social Security incompetence and bureaucratic cruelty.

On November 5th, Anderson Cooper interviewed me on 60 Minutes together with nationally syndicated journalist, Terry Savage, and three Social Security clawback victims. These are just three of the 2 million plus Social Security recipients Social Security is clawing back each year!

Tens of millions of retirees are facing a retirement financing crisis. They saved too little, retired too early, took Social Security too early, and will die well beyond their expiration dates.

Rich or poor, young or old, black or white, red or blue, financially literate or not, the vast majority of us are financially sick. We save too little, borrow too much, retire too soon, take Social Security too early, and bank on dying on time. Indeed, many of us seem to have a financial death wish. Consider these facts about today's workers.

When it comes to motivating us to change our financial behavior, Dave Ramsey is simply the best.

Like much of the world, Wall Street is psyched about AI, specifically using its deep learning to help sell “advanced” advice and financial products.

The Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) are two particularly nasty pieces of Social Security work.

The above chart, based on an S&P study, reached my inbox by way of Torsten Slok, Apollo's Chief Economist. Torsten produces The Daily Spark - a terrific financial blog providing important insights into our financial world, all in bite-sized chunks.