(By Capital Spectator) Successful retirement planning requires intelligent investing decisions, but that's just one of several critical factors for managing your assets after you stop working, reminds Moshe Milevsky
in his new book The 7 Most Important Equations for Your Retirement: The Fascinating People and Ideas Behind Planning Your Retirement Income
. "It's time to have some conversations about retirement income planning
, also known as de-accumulation planning," he writes. "The stories in this book should lead you into those conversations."
It's also time to start doing the math. Milevsky, a professor at York University who's written extensively on retirement planning, takes the reader on a brief but revealing tour through seven equations that he argues (persuasively) that are essential for answering such questions as: How long will my nest egg hold out? How long is my retirement likely to last? How should I structure my spending plans in retirement? What is the probability that my retirement plan is sustainable?
Perhaps the main problem in financial planning is that many individuals (and perhaps some financial planners) deal with these questions in an ad-hoc, heuristic fashion. But as Milevsky explains, economists and mathematicians through the centuries have developed quantitative solutions. Definitive answers don't exist in economics, at least not compared with physics or engineering. But as this useful book shows—simply and succinctly—there are powerful methodologies for removing quite a bit of the mystery that normally weighs on retirement planning choices.
Milevsky advises from the start that he's not offering a "how-to" book, at least not in the traditional sense. Rather, The 7 Most Important Equations For Your Retirement outlines the frameworks, the concepts for thinking about how to answer fundamental questions—questions that are at the core for determining whether your retirement will be a success or a flop. The book, he writes,
is a narrative involving seven people, their discoveries and the conceptual innovations that made it possible for you to stop working and enjoy the money you have accumulated, one day. These protagonists--or scientific heroes--didn't achieve their breakthroughs while hunched over a laboratory workbench, peering through a microscope or treking through jungles.