Retirement Answer Man

“Learn the rules like a pro so you can break them like an artist” (Pablo Picasso). When I was taking a math refresher course for my certification, I had to memorize and practice calculating investment specific formulas. I have never had to use that skill again. But it did serve a purpose in giving me a greater appreciation for the rules as well as an understanding of where those rules are useful and where they are not. It’s important to understand the rules. In this episode on the role of asset allocation in retirement, I’ll talk about how we also need to break some of the rules to serve us in creating a great life.

Why is asset allocation what everyone uses if it doesn’t really work 100% for retirement?

Asset allocation is focused on maximizing return for a given level of risk. It is not tied to your retirement goals or your life. So why does almost everyone use asset allocation in retirement planning? On this episode, I’ll explain how asset allocation works, its benefits, and its downsides. Now that we’re not dealing with accumulation of assets but are starting to deal with decumulation of assets (retirement), we are starting to see that asset allocation may not be the entire answer. That doesn’t mean we throw it out. Listen to today’s podcast to find out what I do to balance it with more flexibility.

Tie your investment strategy to the goals that you want to achieve

Asset allocation builds a solid foundation for making better investment decisions. But you also need to have an investment strategy that is tied to the goals you want to achieve during the retirement (decumulation) stage. On this episode, I help you understand the need for more than just asset allocation in retirement planning. Listen in to hear how I implement portfolios with clients as they are entering and in retirement.

The “Fixed and Flexible” approach to retirement investing

The way that I have come to manage assets with clients is what I call “Fixed and Flexible.” It starts with fixed allocation as a foundation and then adds actively managed investment vehicles for more flexibility. On this episode, I describe how to choose where you want to be in the “river” of capital markets, and I clarify the difference between actively managed vehicles that are flexible and those that are not. Listen in to learn how to develop an approach that has both stability and flexibility.

Evaluate your investment types according to your retirement goals

In the next seven days look at each of your managers, ETF’s, mutual funds, whatever it is you own and identify what type of investment mandate they have. Are they passive, active, or flexible managers? Why do you have these different types and these different portions and how does that relate to what you are trying to achieve for your family? Listen to today’s podcast to get the information you need to ask and answer these important questions about your investment portfolio.



  • [0:27] Why learn the formulas?
  • [4:03] How do we break some of these rules to serve us in creating a great life?
  • [4:20] Disclaimer.



  • [5:05] Why is asset allocation what everyone uses if it doesn’t really work 100% for retirement?
  • [8:56] What are the benefits of the asset allocation model?


  • [14:03] Asset allocation is a sound framework for investment decisions, but not the entire solution.
  • [15:52] The “Fixed and Flexible” approach - asset allocation.
  • [21:56] The “Fixed and Flexible” approach - Actively managed investment vehicles.


  • [32:46] Identify what types of investment mandates your funds have.


  • [34:04] Scott & Jeannine Fitzgerald. Children’s Book - Buddy Pegs podcast. Kickstarter for new book Buddy Pegs Taking the Lead.


Buddy Pegs Taking the Lead, Scott and Jannine Fitzgerald (Kickstarter)

Contact Roger

Roger’s retirement learning center

The Retirement Answer Man Facebook page

Direct download: RAM176.mp3
Category:general -- posted at: 6:00am CDT

What you base your assumptions on when it comes to market forecasting and retirement planning will determine the course of action you take. Forecasting typically comes from respected “experts” who we all look to for advice, but here’s the problem: None of them are 100% accurate. In fact, even with all their knowledge and experience, they are often way off in what they predict. How can you plan for retirement when you don’t know which market forecast to rely on? That’s the topic of this episode of The Retirement Answer Man.

Imagine trying to track your weight when every scale gives you a different number?

I experience this every time I go to my Doctor. The nurse takes me to the scale before I take a seat in the exam room and it almost always shows me to weigh 8 to 10 pounds heavier than my scale at home. Naturally, I wonder: “Which scale is right?” To me, that’s the same thing we all experience when it comes to looking at the market forecasts the experts make. They all tell us something different is going to happen. Sometimes the differences are negligible, but other times they are huge. Who should we trust? I don’t think we can fully trust any of them, and on this episode, I tell you why - and what I do instead.

Assumptions about investment returns are one of the ways market forecasting goes awry.

Every market forecaster has to make assumptions. It’s the only way they can have any sense of continuity to their predictions that are tied to reality. But notice, their predictions are only TIED to reality, they’re not reality itself. In order for a market forecast to be reality itself, we’d have to have a crystal ball that could tell us exactly how investments are going to perform in the future, and none of us has that kind of foresight. But there are ways you can use the historic data to inform predictions that don't require you to follow a given expert in lock-step. Find out how on this episode of The Retirement Answer Man.

Are your investment decisions for retirement tied to your lifestyle goals? They should be.

One of the things that happen when using return assumptions to plan for retirement is that our fear of pessimism prompts us to make decisions based on those assumptions (whether accurate or inaccurate) instead of on what really matters: the type of lifestyle you want to have during retirement - and what is needed to provide it. It’s a nuance you’ll have to have explained a bit more in order to understand, but you’re in luck! That’s what I address on this episode of the podcast, so I hope you take the time to listen.

How much of your investment portfolio is based on market guesses?

I know that's an odd question, but it’s one that reveals a lot about how you’ve approached investing up to this point. If you’re making investment decisions based on what you or some expert THINKS is going to happen, you’re simply guessing. Yes, it may be an educated guess, but it’s a guess nonetheless. What’s the alternative? This episode of the Retirement Answer Man is an introduction to a more agile way of retirement planning that I believe you’ll find helpful. Be sure to listen.


  • [0:30] The thing I don’t like most about going to the Doctor: weighing myself.
  • [3:41] The benefit of one consistent source of data when it comes to asset allocation.


  • [5:30] How forecasters view the art of forecasting markets (not like you might think).


  • [8:49] The wrinkles that come into play using investment return assumptions for retirement.
  • [11:07] What return assumptions should you use in retirement planning?
  • [14:48] A look at the results of some of the more respected market forecasters.
  • [20:34] How I approach retirement planning in light of market forecasting.
  • [22:16] Why my approach doesn’t solve the problem, but does help make better decisions.


  • [23:00] Your 7 day goal: Identify the parts of your portfolio that are based on market guesses.


  • [23:46] Games I learned to play at my friend Joe’s house. Maybe some of these can put a little enjoyment into your life.


Stacking Benjamins Podcast

Games I learned at Joe’s place:

Contact Roger:

Roger’s retirement learning center:

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#MarketForecasting: Who Can You Trust To Tell You What to Expect During #Retirement?

Imagine trying to track your #weight when every scale gives you a different number?

Assumptions about #investmentreturns are one of the ways #MarketForecasting goes awry

Are your #investment decisions for #retirement tied to your #lifestyle #goals? They should be

How much of your #investment #portfolio is based on #market guesses?

Direct download: RAM175.mp3
Category:general -- posted at: 6:00am CDT

Part of my job as the Retirement Answer Man is to help you face the current issues that impact your retirement planning decisions. Part of that is the non-glamorous task of assessing the traditional approaches to retirement planning to see if they still work. So on this episode, I’m going to take a fairly deep dive into the institutional approach to asset allocation that has been the basis for retirement planning for many years - and I think once you understand the premise behind it, you’ll see that it’s a bit antiquated for modern retirement planning purposes. But never fear, I’m also going to point you in the right direction regarding how you can make up for the deficit!

An institutional approach for retirement asset allocation doesn’t work because YOU are not an institution.

I say that with my tongue planted firmly in my cheek, but I also really mean it. Institutions do a very good job of allocating their assets for THEIR particular goals, but YOUR goals for retirement are vastly different than theirs, don’t you think? So following their pattern may be helpful (and it is, in some ways) but it’s not enough. You need to know the potential pitfalls of following an institutional lead and how to avoid them. That’s why I’m here. :) This episode of The Retirement Answer Man will point you in the right direction and then next week, we’ll follow up with some more practical tips to get your retirement planning mindset up to date!

A Nobel Laureate says we have a problem with decumulation when it comes to retirement. What?

I think he made up the word but, Nobel Laureate William F. Sharpe of Stanford University has determined that things in our modern society have changed so much that we need to reassess how we approach retirement planning. A big part of the problem (he says) is that we have a phenomenon happening called “decumulation.” It’s what happens when we hit retirement with resources that are inadequate to match our expected lifespan. As you can see, you’ll eventually run out of assets in that scenario. What’s he doing about it? He’s begun a study, naturally. On this episode of The Retirement Answer Man, I’m going to walk you through his premise and tell you how I approach the same problem, so be sure to listen.

Institutions are not emotional. You are. How does that impact your retirement planning?

As I’ve said before, we’ve long followed an institutional approach to asset allocation when it comes to retirement planning simply because the rationale was that the managers of financial institutions manage assets for a living, so they must know what they are doing. Generally speaking, that’s true - but the real issue is that institutions have different investment goals than individuals do, and they approach those goals non-emotionally - which individuals do NOT do. That alone makes a huge difference in how you are going to make decisions and could set you up for some serious disappointments. On this episode, I address those difference and give you some tips for how to offset them.

What IS your desired outcome for retirement… hmmmmmm?

As Zig Ziglar famously quipped, “If you aim at nothing, you’ll hit it every time.” It’s so obvious you probably laugh when you hear it said so bluntly. I do too. And I think part of why I laugh is because I see how applicable it is to retirement planning. If you don’t know what you really WANT for your retirement, how will you be able to plan in a way that enables you to accomplish it? You probably won’t even get close - which would be tragic. So, on this episode’s, “Smart Sprint” segment I have a challenge for you. Are you up for it? Listen to find out.


  • [0:40] Personal accountability, potato chips on the couch, and other vices we want to change.


  • [3:16] News that “decumulation” is a problem that smart minds are trying to address.
  • [4:44] Longevity’s role in decumulation - and don’t forget about inflation and the timing of retirement income and spending patterns.
  • [6:25] My take on how to handle this decumulation issue.


  • [7:05] Is asset allocation alone enough to deal with decumulation?
  • [8:43] The differences between your private situation and how institutions handle investments.
  • [12:24] Does the institutional approach to asset allocation fit today?
  • [16:25] Looking at historic averages for rolling returns.
  • [19:25] When the magical power of dollar cost averaging starts to work in reverse. Uggg.


  • [24:46] Start asking yourself, “What is my desired outcome for retirement?”


  • [25:45] My experience doing a “breakout” session at the mall. It was a blast!


Contact Roger:

Roger’s retirement learning center:

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The Retirement Income Scenario Matrix Project - through Stanford University

Direct download: RAM174.mp3
Category:general -- posted at: 6:00am CDT

Get ready for part three of our Retirement Investing series. On this week’s episode of the Retirement Answer Man, we’ll talk about risk management, types of risk to watch out for, and why the common approach to managing risk might not be a good fit for you. This one will be a lot more technical than our previous two shows, so get ready to get your geek on!

You can’t get something from Nothing

As my mother always said, “You can’t get something from nothing.” This rings true especially in the world of investing. You can’t expect to reap the rewards of your investments unless you are willing to give up something. For most that sacrifice comes in the form of risk. All investing has risks and the better you understand those risks and know which are worth taking, the better prepared you will be to invest wisely for your retirement. Stay tuned to get a glimpse of the different risks you might have to face.

Diversify your portfolio to fit your goals

Investment risk is very real, but if you are wise about how you invest your assets, you can reduce that risk. However, a diversified portfolio that eliminates risk might not help you meet your investment goals. It’s important that you become clear on what you want out of your retirement investments so that you can know how to diversify your assets in order to meet those goals. Join me in this episode of the Retirement Answer Man to hear my tips on how to create a good balance.

Mainstream risk management might not be right for you

Risk management is a topic we hear a lot about in our modern investing culture. There’s even a common method used to discern how much risk it too much. In this episode of the Retirement Answer Man, I'll discuss why I think the mainstream view of risk management falls short and how you can develop a balanced view that will help you achieve your retirement goals.

Don’t listen to the Investment Professionals

There is a huge disconnect between investment professionals and the regular person. Most people think of risk as losing money and are more concerned about what their investments can do for them to create their ideal retirement than they are about optimizing their portfolio. The professionals on the other hand look at risk management based on statistical factors in order to create an optimized portfolio. Often times an optimized portfolio has nothing to do with the life goals you and your family may have. In this episode, I dive into the thinking behind the professionals so we can figure out if the standard approach is right for you.


  • [0:30] You can’t get something for nothing.
  • [0:45] In order to reap the benefits of potential investments, you have to be willing to give something up.


  • [2:24] Markets are at an all time high and risk is being more sensationalized than ever before.
  • [3:00] Mainstream Risk management.
  • [4:00] Types of risk that are not talked about very often.
  • [5:00] The Risk of Longevity.
  • [6:00] The risk of Inflation.
  • [6:45] Managing the boogie-man of risk.


  • [6:55] What is an index?
  • [8:27} What is standard deviation?
  • [12:08] What is a correlation?


  • [14:00] “Between calculated risk and reckless decision making lies the dividing line between profit and loss.”
  • [14:50] There is a huge disconnect between investment professionals and regular people.
  • [16:55] 2 Major types of risk that we are affected by.
  • [17:00] Risks can be reduced by the diversification of assets.
  • [19:00] Systematic and Market risk. There is no way to eliminate these risks.
  • [26:50] How do I know what my risk tolerance is?
  • [27:00] The disconnect.


  • [33:30] Figure out what the asset allocation is in your portfolio, and why.


  • [34:28] I’m happy that we got through this discussion of risk. If you are having a hard time explaining something, hit the big points and tell stories.


Contact Roger:

Roger’s retirement learning center:

The Retirement Answer Man Facebook page:

Direct download: RAM173.mp3
Category:general -- posted at: 6:00am CDT