Safety-First: A Sensible Approach to Retirement Income Planning with Wade Pfau (EP.89)

The podcast features an interview with Wade Pfau, a retirement income specialist, focusing on the unique risks retirees face and how to plan for retirement income. Pfau contrasts the traditional probabilistic framework with his safety-first approach, advocating for contractual protections like annuities to cover basic expenses. He argues that annuities are "supercharged bonds" due to their risk pooling and mortality credits, which allow for potentially higher spending and legacy. The discussion explores the limitations of the 4% rule, the role of dividend-paying stocks, and the importance of accounting for longevity risk. Pfau also suggests utilizing home equity and permanent life insurance as buffer assets and advises considering deferred annuities to lock in gains and manage market volatility.