Nevin's Data "Points"

What does it mean to have a 75% probability of success? I’ve never been particularly fond of the probability-of-success measures commonly used in retirement planning. It’s not that the calculations aren’t useful — or that I have a better crystal ball. I’m just not convinced that most people understand what the resulting percentage means, much less how to apply it to their retirement decisions. After all, a 75% probability of success sounds like a grade — and not a particularly good one. It also sounds as though there is a 25% chance that your retirement will be a complete and unmitigated failure. Neither interpretation is necessarily accurate. ad space A new paper from David Blanchett at PGIM, aptly titled “Successfully Failing,” takes on that conventional measure and suggests that it may not simply be confusing. It may actually lead retirees — and those advising them — to make less-than-optimal decisions. Success ‘Measures’ Probability-of-success calculations generally run a retireme...

  Retirement surveys tend to read like actuarial obituaries — a long litany of percentages chronicling regret, anxiety, and insufficient preparation. Unless, of course, you look at the underlying data. The latest survey from Schroders [i] offers plenty of the former; inflation remains public enemy No. 1; healthcare costs continue to ambush expectations — and more than half of retirees apparently have no idea how long their money will last. But wait. Buried inside that grim arithmetic are some surprisingly encouraging signs — and you don’t have to look very far. For instance, yes, the survey says that 58% of retirees [ii] don’t know how long their savings will last. Which means … 42% actually do (or at least claim to). Given the complexity of retirement income planning — sequence risk, inflation assumptions, healthcare shocks, longevity projections, required minimum distributions, tax strategy, market volatility, and the occasional Congressional “enhancement” — it’s arguably rema...

  We’re often told that actions — or lack thereof — have consequences. Indeed, this is the time of year where many a stressed-out parent often falls back on the admonition from that holiday classic “Santa Claus is Coming to Town” — you know, “you better watch out, you better not cry…” because Santa is keeping tabs.    In fact, as Christmas approached, it was not uncommon for my wife and I to caution our occasionally misbehaving brood that they had best be attentive to how their actions might be viewed by the big guy at the North Pole. That said, a few years back — when my kids were still “kids” (and “believers”) — we stumbled across an ingenious website; one that did more than caution. It actually purported to offer a real-time assessment of one’s "naughty or nice" status. Our parental admonitions notwithstanding, nothing we ever said or did had the impact of that website — if not on their behaviors (they were kids, after all), then certainly on their level of concern abo...

  So, what kinds of things get your blood “boiling?” Some of you will recall that back in 1976 there was a movie called “Network” with a big cast that got nominated for a bunch of academy awards including best picture and director (didn’t win), as well as best actress and actor (won both, as well as best supporting actress and several others). The underlying premise of the movie was one of corporate greed, more specifically the extremes to which TV networks would go to garner ratings. The most extreme was allowing an aging network anchor named Howard Beale to remain on camera after he said he was going to blow his brains out on national TV. Well, he didn’t — but he did wind up being positioned as a kind of “mad prophet” ranting about the ills of society, leading up to an evening where he encouraged similarly frustrated viewers to go to their respective windows and shout “I’m mad as hell, and I’m not going to take it anymore!” While that frustrated call to action likely didn’t actua...