Inflation-Adjusted Retirement Planning
About the Author
Dr. Mouer often ranges far and wide from his formal credentials. What led him to write this book was, in his own words: “I knew the answers – to the question of how to accommodate inflation in distributing funds from a retirement account, so that it lasted your lifetime.”
Dr. Mouer is a many-degreed individual with a Bachelor’s degree in civil engineering, two Master’s degrees, and a Ph. D. – none of which qualifies him to write about the high finances of inflation-adjusted retirement planning. But he has a keen intellect, which often leads him to postulate and examine issues which come before his inquiring mind.
“After I retired early, at age 53, I used to be invited to these retirement seminars. You, know, the ones where they give you a nice, free meal to entice you to listen to their spiel on how to invest your money – and help themselves to a piece of your earnings.”
“Well, I just went for the free meal, and, well, because sometimes retirement can be boring. I began to glean from these encounters that these financial advisor types did not seem to know how to adjust for inflation and insure the distribution of retirement investment funds lasted your lifetime. As I begin to investigate the matter from other sources, and do web searches, it became clear that they were guessing at it – they apparently had no formulaic expression for it.”
“To be fair, I think some financial Ph.D.’s might know how to do this kind of planning, because it can be done by iterating a properly configured tabular form on a computer until the ending balance zeroes out on the appropriate year. But if they have developed a formula, they are keeping it to themselves – either because they think clients are too dumb to understand it, or, because they want the client to pay them to work out the answer. You know, knowledge is power, and, if appropriately restricted, it can become wealth for the knowledgeable, at the expense of the ignorant.”
“Despite finding no published formula, I knew a formulaic solution existed. The formula lies in any text on engineering economics, and often has examples involving inflation. Obviously the engineers and financial advisors don’t talk to each other, or read each other’s texts. So I began to play with what we in engineering call the ‘geometric gradient series.’ Within a few days I had developed a model, with several examples.”
“Then I began to write a pamphlet around those solutions, and began encountering and addressing other peripheral, but important issues, such as: ‘How long will I live.’ The pamphlet became too large, and I reorganized it into a book. I spent the next year or two filling out the book by exploring and researching other related issues with retirement planning.”
So there you have it – Inflation-Adjusted Retirement Planning – because the financial advisors, can’t or don’t give it to you, and you need a tool to make your own calculations – and to know who might be unintentionally, or intentionally, misleading you.
©2008, Simon Revere Mouer III
all rights reserved