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Discussion Starter #1
I just read MonerGal's new book " Pensionize Your Nestegg" It was well written, easy to read ,and raised (and solved) some very interesting issues. I highly recommend it to readers of this forum.
 

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It should be! I have visited two bookstores in the last two days and have not seen it, though (I will be excited to see my first copy "in the wild"). The actual, "official" release date is today...but I don't know very much about the book business, including what that date actually means.

I hope to get into a substantive discussion of the issues in the book, if there's interest and questions. ;)
 

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I've looked for it in a few bookstores here and haven't been able to find it. I'll try again in a few days. I'm looking forward to any discussions that arise from the book's content.
 

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I preordered through Amazon and received my copy this past Monday. I suspect one of the main issues this group will find interesting is the proposition that buying an annuity is a very smart thing to do. this is despite the poor pricing currently. The book raises prominently the issue of longevity risk that most people tend to over compensate for , hence underspending in early years of retirement. Great book-interesting ideas. Buy it!!
 

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The book raises prominently the issue of longevity risk that most people tend to over compensate for , hence underspending in early years of retirement.
This is one of the core ideas of the book, and it is strongly counterintuitive. Most mainstream financial advice does not follow the path we lay out in the book, and getting to get that message out there in print was very satisfying for me personally.
 

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If you are in Toronto, I am at the "Money Matters" tent at Word on the Street on Sunday, September 26. (Will provide links later...)
 

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More than 1/2 way through the book. Well written & easy-to-follow. Rigorous discussions as you would expect someone from academia to be. I would recommend that anyone in or nearing retirement should read this book.

One quibble: While I can see the benefits that GLWB products can provide, it's hard to see how investors in the popular ones (such as IncomePlus) that charge as much as 4% in fees are ever going to come up ahead. Perhaps a better idea might be to purchase an annuity and invest the difference in a portfolio?
 

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Oh Em Gee, finally a substantive question on the book. ;)

Here's the thing. You will note that we do NOT provide any recommendations in the book. We don't say that GWMBs are better than annuities or your SWP (non-longevity-guarateed) accounts, and we don't provide any model or recommended allocations.

We do, however, describe the three product "silos" and the costs, attributes, and benefits of each one.

The thing about GMWBs which some investors will prefer (compared to annuities) is that they preserve liquidity. Annuities are an irreversible handover of your $ to the insurance company. Many people are not comfortable with a one-way decision like that.

GMWBs, on the other hand, do not require that final decision...you CAN cash in and liquidate your accounts (to preserve estate value, or for whatever reason you want).

We do provide a note and chart (on page 130) about the costs to pensionize. We are not intending to step over costs and fees, not by any means. But it is important to understand what you are getting from those fees, and the nature of the trade-offs you make in choosing one silo over another. (Google the "annuity puzzle" for discussion about the puzzingly low rates of annuitization in North America.)
 

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Oh! And I did not mean that there hasn't been substantive questions here about the book. Yesterday at Word on the Street someone insisted that I don't understand how annuities work and although she doesn't own an annuity or work in the industry, she must understand them better than me (and she cornered me to harangue me on this point). And another guy wanted to discuss longevity on the planet Vulcan. :rolleyes: (To be fair, it was in response to me talking about separating out longevity and market risk, using the planet Vulcan as an example. But whaddaya know, I have not actually watched the entire Star Trek ouevre.)
 

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Sorry MG. The book has just reached the top of my pile. I'll probably finish it tonight and I might have more thoughts.
 
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