RETIREMENT INCOME | DECUMULATION | LIFE AFTER WORK
Retirement
You solved the accumulation problem. Nobody solved the thirty years after it.
Getting to retirement is an accumulation problem and the industry has solved it thoroughly. Living thirty or forty years inside retirement is a different problem, financially and otherwise, and almost nobody plans for the second one.
Who Is This For
Crossing the line or already living beyond it
Who Is This For
Crossing the line or already living beyond it
01
You're within a few years of stopping work, on either side of it.
02
Your portfolio now has to produce income rather than grow.
03
Your identity has been tied to your work for decades.
04
Your retirement is funded by a business sale or a liquidity event.
These situations involve several account types with different tax treatment, a withdrawal sequence that has to be decided rather than defaulted into, a gap to cover before other benefits begin, and a portfolio that has to survive a horizon nobody can predict.
Retirement is not a destination
The finish line is roughly the midpoint
Retirement is not a destination
The finish line is roughly the midpoint
Traditional retirement planning treats retirement as a destination. Earn, save, grow the portfolio, arrive. Every tool in the profession is built around reaching the line.
The line is roughly the midpoint. If retirement runs thirty or forty percent of a life, arriving at it solves the smaller half of the problem. The larger half breaks in two places, one financial and one not.
The hardest problem in finance
Accumulation is solved. Decumulation is not.
The hardest problem in finance
Accumulation is solved. Decumulation is not.
Accumulation is solved. Save consistently, diversify, keep costs low, hold through the bad stretches, let time do the compounding. The profession has worked this out thoroughly and most of it can be automated.
Converting that pile into an income that lasts an unknown number of years isn't solved. William Sharpe, who won the Nobel for the work behind the capital asset pricing model and spent a career measuring financial risk, called decumulation the nastiest, hardest problem in finance. That's not a rhetorical flourish. His own analysis of the withdrawal question runs to six interrelated sets of variables, none difficult alone and close to impossible to combine.
Three risks land at the same time:
01
Longevity
You don't know how many years the portfolio has to support.
02
Inflation
You don't know what rising costs will do to the income along the way.
03
Sequence
You don't know what order returns will arrive in once withdrawals begin.
That third one inverts everything people learned during their working lives. Through the accumulation years the rule is familiar. The further from retirement, the more room to absorb a bad stretch, and the closer you get, the tighter the guardrails. Cross the line and the logic runs backward. The early retirement years are the exposed ones, because a portfolio that has started paying out has lost the thing that used to rescue it, which was time. A poor decade at the start does damage an identical decade later wouldn't.
What I write about
Why the withdrawal order matters more than people expect. Retirement accounts, taxable accounts, and tax-free accounts behave very differently once money starts coming out. Almost nobody arrives at retirement having decided the sequence. Most people default into it, and the cost of that shows up slowly.
Why the early years are the exposed ones. A portfolio that has started paying out has lost the thing that used to rescue it, which was time. The book spends a chapter on how to structure around that, so a bad year doesn't force a sale at the worst moment.
The dates nobody has mapped. Coverage before other coverage begins. The years before benefits start. The point where a survivor's income changes. Plans break on specific dates, and all of them are knowable years ahead.
The "can we afford it" questions. The house, the second home, the money for the kids, the trip that costs more than you're comfortable with. None of them get answered by a feeling. They get answered by running the number against a plan.
And one chapter gets more mail than the rest. The one about a monthly transfer from investments into a bank account. A paycheck. You know the number, so when you're on vacation you're not doing math in your head about whether the trip was a mistake.
Most retirement advice is subtraction
The other half never gets planned at all
Most retirement advice is subtraction
The other half never gets planned at all
The prevailing model says a good retirement is about pulling back. Less work, fewer obligations, fewer challenges, more comfort. Wind down and play it safe. Nearly every retirement page on the internet is a version of that, and it assumes that when you retire from a job you also retire from life.
What actually happens is that work stops and takes structure, status, daily purpose, and most of a person’s social contact out the door with it, and nothing was designed to replace any of it. The portfolio performs exactly as modeled. The person doesn't.
AVERAGE RETIREMENT
Subtraction
Wind down. Play it safe. Remove work and obligations without intentionally replacing the structure, purpose, challenge, and connection they provide.
BADASS RETIREMENT
Addition
More of what there was never time for. Harder things rather than easier ones. A life that receives as much deliberate design as a career did.
The alternative is addition. More of what there was never time for. Harder things rather than easier ones. A life that takes as much design as a career did. A client heard me describe it that way years ago and said it sounded like one badass retirement. The name stuck and the book came out of it.
Average Retirement is subtraction. Badass Retirement is addition. One is somewhere you go to wind down. The other is somewhere you go to live.
This is not for everyone and I don't pretend otherwise. Some people genuinely want the quiet version and they should have it, the same way I am never going to like sushi or jazz no matter who tells me I should. But across three decades of this work, the mistake I've watched retirees make is almost never aiming too high. They aim far too low, experience far too little, and there are no do-overs on this one.
What that looks like
Jim was on the floor of his office before he understood what was happening.
What that looks like
Jim was on the floor of his office before he understood what was happening.
Jim was on the floor of his office before he understood what was happening.
Seven days a week for years. Missed soccer games, missed dinners. One afternoon he nearly passed out and lowered himself to the floor before he collapsed, staring at a water stain on the ceiling, thinking is this how I die.
He didn't ease into what came next. He climbed Rainier. Started training for endurance events. I was there for some of it—Kilimanjaro, New Zealand, the Grand Canyon, out of a plane once.
Then his heart stopped. A month in a coma. When I walked down the hospital hallway I'd prepared myself for him not knowing me, and I heard a voice before I got through the door. "Robert!"
The doctor told me the only reason he survived was the training.
That was nearly ten years ago. He's still going.
That's the life the plan has to fund. The rest of this page is about the money that gets it there.
Is retirement being funded by an exit?
The sequencing and structure of the sale shape everything downstream.
What gets sorted first
Start with the life the portfolio has to support
01
What the portfolio has to produce, and for how long.
Not a return target. An income figure, in today’s money, that has to arrive every month for an unknown number of decades. Almost every other decision follows from that one.
02
Which account gets drawn from, and in what order.
Retirement accounts, taxable accounts, and tax-free accounts behave very differently once withdrawals start. The sequence is a decision with real consequences, and defaulting into it is the most common way to leave money on the table quietly and permanently.
03
Where the gaps are.
Health coverage before other coverage begins. The years before benefits start. The point where a survivor’s income changes. Plans built on today’s picture break on the specific dates when the picture changes, and those dates are all knowable in advance.
04
What the retirement is actually for.
This isn't a soft question appended to the financial ones. A plan built to preserve a balance and a plan built to fund a specific life produce different portfolios, different withdrawal rates, and different answers about risk. Deciding that late means rebuilding.
The Book
Badass Retirement
A retirement should be designed around more than the absence of work. A companion workbook is
available with it.
The Book
Badass Retirement
A retirement should be designed around more than the absence of work. A companion workbook is
available with it.
About Robert
Three decades at the intersection of wealth and life-changing events
Robert Pagliarini is a CERTIFIED FINANCIAL PLANNER™ professional with a doctorate in financial and retirement planning and a master’s degree in psychology. He's a partner and senior wealth advisor at Beacon Pointe Advisors.
He's spent more than thirty years working with people after the ground moves — sudden wealth, the sale of a business, retirement, and Heavy Money from an inheritance or legal settlement. He's written eight books on personal finance. The work and the books have always sat at the same intersection. An event, the money, and the life the money has to support.
Questions readers ask me
These come up more than anything else after someone reads the book.
Questions readers ask me
These come up more than anything else after someone reads the book.
I'm not sure I have enough, and I don't know what I can take out each year.
I have the money. I'm not sure how to turn it into income I can live on.
If I go first, I don't know what happens to her income.
I've saved my whole life. Now I'm supposed to spend it and I can't make myself do it.
We want to give the kids money now. I don't know if we can afford to.
The book works through all five. If you have a question it doesn't answer, write to me. I read everything that comes in.