Systematic Comparison of Assets and Liabilities, Part 2

This post is a follow-up to our post of April 11, 2023 entitled, “Systematic Comparison of Assets and Liabilities—Its How We Actuaries Roll.” In this post we will describe the general process actuaries use to systematically compare assets and liabilities for many financial systems such as pension plans, Social Security and, as recommended in this website, personal financial retirement plans. We believe this general actuarial process is just as important, if not more important, in the management of a system’s finances than the models or assumptions actually used to project or calculate a system’s assets and liabilities.

Wade Pfau Touts Use of Basic Actuarial and Financial Principles for Retirement Planning

Thanks to Dr. Wade Pfau,

• Founder of Retirement Researcher,
• Principal and Director of Retirement Research for McLean Asset Management,
• Research Fellow with the Alliance for Lifetime Income and Retirement Income Institute,
• Professor at the American College of Financial Services, and
• Widely recognized retirement thought leader,

for once again advocating the use of essentially the same basic actuarial and financial economics principles for retirement planning for retirees and near retirees that we have advocated in this website for years.

You can read Dr. Pfau’s thoughts on comparing household assets and spending liabilities and assumptions to use for this purpose in this May 26, 2023 Financial Advisor article.