Happy Holidays and many thanks for reading my blog!
January will be a busy month for non-research related activities at my job, so there may not be a whole lot of new content here until February.
But please don't drop your RSS feed or email subscription or anything like that!
I'm planning for a big year here in 2012. Along the lines with what I started with my recent column on GLWBs, I'm planning to create a systematic analysis comparing many different retirement income strategies:
fixed inflation-adjusted withdrawals
variable withdrawals based on many kinds of decision rules related to market returns
ceiling/floor variable withdrawal strategies
portfolio withdrawals + a deferred annuity
portfolio withdrawals mixed with annuities
portfolio withdrawals mixed with GLWBs
asset dedication / time diversification approaches
I'm not sure what to call it, but something along the lines suggested in Zvi Bodie's book about TIPS about mainly using TIPS and then buying call options on the stock index with any extra funds
approaches which only withdraw interest and dividends, leaving the principal intact (professional analyses usually dismiss this as being a mental accounting behavioral mistake, but it sure is popular with people posting comments on finance web sites)
And if everything goes according to plan, at some point during the year I will also be able to include a detailed analysis of taxes for all these strategies as well.
I think I may have been too harsh on GLWBs in my column, since one of my main points is that US historical data gives us a misleadingly rosy picture about what may happen in the future. A part of that rosy picture is that it is easy for systematic withdrawals to "beat" GLWBs. So part of my future analysis will account for the possibility (probability) of lower future returns for stocks and bonds.
So thank you again for reading and please stay tuned in 2012!