Hard to believe that this is our 300th blogpost. Almost all of these posts have encouraged our readers to employ the same basic actuarial principles we learned as pension actuaries to help them develop a reasonable spending budget. During these past nine years, we have continuously refined our messages and improved our tools, but the basic actuarial principles we advocate haven’t changed. More importantly, we continue to passionately believe that the use of these principles can enable individuals like you to make better financial decisions.
From time to time, our readers will give us feedback or make suggestions for improvements in our budgeting tools. For the most part, we really appreciate these suggestions. Recently, as discussed in our post of February 7, 2019, Richard Junker, a fellow Fellow of the Society of Actuaries, suggested that the Actuarial Budget Calculator’s (ABC’s) for Single Retirees and Couple Retirees would be improved if they permitted input of expected non-recurring expenses rather than require separate calculation of present values using our Present Value Calculator spreadsheet. We agreed and made the suggested change.
As soon as we completed modifying the ABC’s for non-recurring expenses, we received an email from Robert Lerman, a retired pediatric dentist, suggesting that it would be nice if our spreadsheet tools also incorporated the algorithm we recommend for smoothing variations in the current year spending budget resulting from differences between actual and assumed experience. DDS Lerman actually forwarded us an Excel spreadsheet with his proposal. We were so impressed by his suggestion and spreadsheet that we incorporated the recommended smoothing algorithm as a separate tab in the retiree ABC’s. Thank you, DDS Lerman.
For those of you who aren’t familiar with the recommended smoothing algorithm, see our post of January 2, 2017. You can also find another more recent example of its application in our post of November 6, 2018. And now, thanks to DDS Lerman, you can easily smooth your own numbers in the new “Smoothed Budget” tab.
If you have suggestions for improvement of the tools in this website that you would like to see, please share them with us. As DDS Lerman can attest, it wasn’t like pulling teeth to get us incorporate his suggested change.
Finally, if you believe, as we do, that the Actuarial Approach just makes good personal financial sense, please feel free to share it with your friends.
