BUZ LIVINGSTON: The Grateful Dead, John Bogle and a retirement train wreck

Published: Thursday, October 11, 2012 at 04:04 PM.

Both Ghilarducci and Bogle propose changes to our current 401(k) distribution options. Their recommendations include eliminating loans and penalty-free withdrawals. Ghilarducci touts annuitization (creating a lifetime income stream) to make sure people don’t run out of money before they run out of breath. The money management world cringes at annuitization because they would have fewer assets to charge fees.

Bogle takes advisors to task for unwittingly (or not) increasing clients’ risk by goosing yield for short-term gain. Using low cost passively managed ETFs and mutual funds increase your return without additional risk.  What you don’t pay you keep. Don’t take big bets on a hot sector or some new-fangled investment idea.

Investing should be as exciting as watching paint dry. Too many people confuse short-term speculation with investing. The market doesn’t care if you need additional income. Rather than take extra risk, look at paring back expenses or working longer.

Bogle scoffs at the notion of privatizing Social Security and, since he’s a conservative who can do math, instead proposes raising the amount subject to employment taxes while gradually raising the retirement age and limiting inflation adjustments. The notion of privatizing Social Security in a country where 75 percent of people approaching retirement have less than $30,000 saved for retirement boggles the mind. 

Life expectancy is increasing but for many people “Train 102 is on the wrong track and heading for you.”

Buz Livingston, CFP offers hourly financial planning and fee-only investment management to clients along Florida’s Emerald Coast.  He can be reached at 267-1068, Buz@LivingstonFinancial.netor www.LivingstonFinancial.net.


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