Present Value of a Growing Stream of Future Cashflows

Jerry Platt At its core, retirement planning is about connecting present to future cashflows, where those cashflows might reflect your minimal annual needs, your more aspirational annual wants, or your anticipated annual funds from one or more sources.  Standard practice in finance is to discount future cashflows back to the present by applying a discount rate.  Spreadsheets are helpful in …

Quantifying Your Subjective Beliefs

Jerry Platt In what year do you think the first U.S. Social Security check was issued? Two people are asked this question, neither knows the answer with certainty, so they separately are guided through a process to represent both their best guess and degree of uncertainty, resulting in the two probability distribution curves below, dating back to 1776. Which person …

Emerging Risks in a World Beyond Covid-19

Jerry Platt The year 2020 will forever be linked to a pandemic, a known global risk that most years manage to avoid. Such hazards sometimes lead to cascading risks traceable back to its root cause. Already, the virus has led to major disruptions of economies, massive unemployment, and reduced levels of international trade (particularly regarding medical supplies). What other risk …

Own and Run Your Retirement: A Sports Team Analogy

Retirement planning, financing and execution is complicated.  There is the seemingly simple but nonetheless elusive matter of recognizing the need, allocating the time, and collecting the relevant information.  There is the challenge of creating and projecting personal or family financial statements, anticipating retirement dates, and adjusting future funds for inflation and the time value of money.  There are somewhat measurable …