The Funded Ratio
A series applying actuarial principles to individual retirement portfolios, by J. R. Calder. Read in any order; taken together, the essays are the argument.
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01
How Much Do You Need to Retire? Price It, Don't Guess
Price the spending instead of guessing at a multiple. Five numbers, one ratio.
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02
Why Monte Carlo Is Theatre
A probability of success tells you nothing about what is wrong.
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03
You Have a Six-Figure Asset You're Not Counting
Social Security is a bond you already own. Price it that way.
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04
Your Retirement Fund Has Bad Beta
Not all risk is paid for. Some of it just moves against your liability.
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05
The 15-Year Mismatch You Don't Know About
Your spending behaves like a 20-year bond. Your portfolio behaves like a 4-year one.
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06
Inflation Beta: Which Assets Actually Hedge Inflation
TIPS hedge inflation, gold half hedges it, and a 60/40 portfolio does not.
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07
What Interest Rates Actually Do to Your Retirement
A bond rally lifts your portfolio and raises the price of your retirement by more.
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08
Why Property Feels Safe but Isn't
Illiquid, undiversified, and priced off the same real rates as everything else.
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09
Your Funded Ratio Is Not Your Net Worth
Austen described Darcy by his income, not his capital. She used the right units.
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10
The One Number That Matters
One framework, one number, one calculation you can do today.
Bonus
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11
Die With Zero Is Right, and It Needs Better Math
Money you die with is money you wasted. Spending it down needs a denominator.
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12
You Can't Eat Expected Returns
Your planner discounts your spending at 7%. Nobody eats an expected return.
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13
What Is Risk? Cash Is Not Safe
Risk is not something an asset has. It is what it does to what you are funding.
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14
Why You Won't Spend Your Portfolio
Income gets spent. Money you have to sell first does not, and the 4% rule needs selling.
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15
The Tax on Money You Have Not Received
The inflation adjustment is taxed before it is paid. In a taxable account that takes about half the coupon.