Ways to Boost Income on Retirement Holdings

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With the volatility of markets and the government interfering with capitalism, the ability to plan or expect for "normal" market swings is over. The day of buy and hold is gone. A retirement portfolio must be flexible and nimble to adjust with future super large swings in the market. This is a very unstable time in the world caused to a great deal by the various governments overspending (Greece, Spain, U.S., etc.). All I know is that I have to be extremely diversified and nimble going into retirment.

David of MO 2:35PM June 18, 2010

You're right about the different approaches.
Joy Slabaugh's annuity approach and preservation mode would be perfect for the couple who have amassed enough to draw 4% or less of their portfolio in their retirement years and not dependent on any future growth. Her suggestion about non-traded REITs will add an out-sized amount of risk although. This sort of investment hinges too much on the resale value of the underlying properties and the relatively short maturity some of these securities have. I hope she tells retirees about the ability (or willingness) of the REIT to not only determine the maturity on their debt but whether refinancing short-term debt might be a problem in the near future.
I like Erika Safran's approach and her warning off the conservative investor by suggesting that "peace of mind" comes at a cost. If you consider the 30-year time horizon, switching too early or too much into fixed-income investments is akin in some ways to suggesting that someone fresh to the workforce buy bonds.
George Jackson's approach sounds as if it involves a lot of rebalancing as the markets shift, which to me sounds counterintuitive. Many of these types of shifts take place on the way down and well-after the market has decided on something else. But his ability to rotate out of stocks in "early 2008" (stocks were beginning to decline) put him well ahead of where the vast majority of investors were in late 2008.
Tom Brown seems to be focused on the safest route of all in suggesting the budget and the ability of the portfolio to cover those expenses. Although he doesn't say annuity (his association with Northwestern Mutual suggests otherwise) the frequent rebalancing makes me wonder how much his management costs are. As long as the client's needs are being met, he mentions that they are okay with temporary dips.
None of the advisers seemed too concerned about interest rates or the potential of a maturity wall in the coming year. If I were to bet on one adviser's advice surviving better than the others, it would be Ms. Safran's approach. She was the only one with an eye on low-cost investments at a time when costs play the major role in how long the portfolio lasts.

Target2025.com of OR 2:31PM April 16, 2010