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"Wealth Odyssey" Author Addresses Financial Planning Impact of Pension Changes
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Added: 09/20/2005
Type: Summary
Viewed: 303 time(s)
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"Wealth Odyssey" Author Addresses Financial Planning Impact of Pension Changes
At a time when pension changes threaten retirement security, many people wonder how to adequately financially prepare for potential future issues. Wealth Mentor and author of "Wealth Odyssey: The Essential Road Map for Your Financial Journey" Larry R. Frank, Sr. MBA, CFP® has developed a "Wealth Odyssey" model to help address future pension concerns and current financial planning issues.
"Pension programs are changing in many different ways," the author explains. "Competitive market forces are forcing many companies to change their pension plans for workers. Nevertheless, one thing is certain; planning ahead for possible pension benefit reductions is a prudent thing to do."
Frank's "Wealth Odyssey" places an emphasis on where to go in the future financially instead of on how to just live for today, enabling readers to address potential future changes successfully. Frank has developed a unique "Wealth Odyssey Road Map" (WORM) that works directly with his "Standard of Individual Living" (SOIL) model. In clear and concise language, he helps readers discover the best route to achieving their personal financial planning goals and to monitor their status through his "Progress Line." Frank discusses such topics as The Wealth Rule, The Earning-Spending-Saving Formula, Using Debt Wisely, and Risk Management.
With the information included in "Wealth Odyssey," readers achieve a greater understanding of what focusing on wealth, rather than income, can do for them and their families and how it can simplify living. "Wealth Odyssey" defines wealth and why it is important to understand what wealth really is today: not income, but net worth. With this understanding, financial planning becomes much clearer.
"Wealth Odyssey" has been nominated for ForeWord Magazine's Book of the Year Award and the Writer's Digest International Self-Published Book Awards, both in the Business & Economics Category.
Frank offers the following suggestions to keep in mind when evaluating what changes in pension benefits might mean to retirement:
* Understanding that Competitive Market Forces are at Issue: Innumerable variables out of your control will affect your retirement planning—knowing how to deal with the inevitable changes and the effect on your plans will enable you to deal with them successfully and confidently; moreover, the sooner the better.
* The "Wealth Rule:" Understanding the impact of a pension change first requires you to understand how to plan for retirement overall. The "Wealth Rule" from "Wealth Odyssey" is derived from current, ongoing portfolio withdrawal research. Simply stated, a sustainable withdrawal rate from a retirement portfolio should not exceed 5 percent—a lesser percent would be better, more conservative.
* Then, Know Where You Are: Your unique Standard of Individual Living (SOIL) is the real benchmark that you should use to determine the resources you need to support yourself and family. Otherwise, you're using benchmarks and indexes unrelated to what you are really trying to accomplish. Know what your SOIL is today and what your targeted retirement SOIL will be. Simply put, SOIL is what you are spending to support your lifestyle. It excludes money you are not spending—exclude everything you are saving for retirement and any other goals you have.
* Know Where You're Going: The "Wealth Rule" provides a simple method to do this. The "Wealth Rule" explains the relationship between income and retirement savings—knowing this helps with the unknowns of the markets, economy, Social Security, and pensions.
* Worst Case Scenario: Evaluate the worst case pension change possible and adjust your plans accordingly. Using the "Wealth Rule," you can decipher how much extra you will need to make up for that difference and retire successfully. The sooner you know this and start to save this extra amount, the sooner you are able to stay on track for retirement as you originally planned. If you plan on someone else, or some external program, to support you fully, you are at the whims of, and market force changes to, any such program. Retirement is financial independence, not financial dependence.
"Everyone is looking for the formula that will lead them to financial success," Frank added. "There is a simple method and model developed by reverse engineering results of current withdrawal research, taking the complex and simplifying it for practical application. The 'Wealth Rule' translates income to assets, and assets to income. Knowing this simplifies life and retirement financial planning."
Other retirement financial planning tips which are helpful:
* Know the Difference between Wealthy and Rich: Wealth is not measured by how much you spend, but by how much you have not spent. Wealth is sustainable with or without an income. Wealthy is not being rich. Even those with a modest income are wealthy when they are able to sustain their unique standard of living while retired. Wealthy means you are self-supporting without an income, the definition of retirement in the 21st Century. How can you do this? "Wealth Odyssey" explains how.
* Remember that It's All Connected: Rather than taking an income-based approach by tackling financial topics and issues one at a time until money runs out, adopt a wealth-based viewpoint where the landscape of financial topics are clearly seen to support each other and interact with each other through a net worth-centric model. Financial planning decisions overlap and affect one another—know all the factors that will affect the real outcome of your decisions.
About the Author Larry R. Frank, Sr.
Larry R. Frank Sr., MBA, CFP® has twenty-seven years of financial planning research and real-life experiences teaching people personal finance focused on how to make smart decisions to grow and protect their net worth; a simple change in perspective from income-centric to wealth, or net-worth-centric. Rather than make things complicated, his work has been focused around simplifying the complexities of prioritizing simultaneous financial planning issues and their related calculations. He holds a BS cum laude in physics and an MBA in finance. Frank resides in Rocklin, CA.
"Wealth Odyssey" (ISBN 0-595-33720-1, trade paper, $16.95) an "Editor's Choice," is available from iUniverse, Inc., www.BarnesandNoble.com , www.Borders.com , www.Amazon.com or www.iUniverse.com . Independent book store distribution available through Ingram Book Group and Baker & Taylor.
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