Filed Under:Annuities, Suitability

Advisors: The ‘7 Most Important Equations’ on Retirement

Photo credit: Keerati
Photo credit: Keerati

Moshe Milevsky, below right, is a household name to financial advisors. Indeed, the York University finance professor and author of several well received books and innumerable articles, academic and popular, has become a rock star on the advisor lecture circuit. Why?

It is Milevsky’s unique approach that has made him, in many advisors’ opinion, one of the most important educators on retirement finance today.

An understanding of life probabilities is one key component to helping clients evaluate a simple but common question: Should your retiring client take a lump sum or keep an annual pension? For that question, Milevsky turns to Edmond Halley, best known as the astronomer for whom an important comet that visits our atmosphere now and then is named.

Milevsky discusses in fascinating detail how the astronomer’s pivotal contribution to retirement finance may have something to do with the mystery of how his aristocratic father was likely murdered and found dead and completely naked except for his shoes, floating in the river in England in 1684. That is a typical example of how Milevsky manages to keep a book on retirement finance riveting.

He also explained the importance of policyholders’ converting their insurance into life annuities around the age of retirement. Writes Milevsky: “I venture to guess that if Professor Huebner were alive today, he would be on the road with annuity wholesalers giving seminars to financial advisors and their clients, extolling the virtues of longevity insurance and life annuities.”

The seventh and final equation in Milevsky’s book was that of the Soviet-era Russian mathematician Andrey Nikolaevich Kolmogorov. Milevsky writes of the winner of the 1941 Stalin Prize: “It is…a supreme irony that financial advisors…owe Professor Kolmogorov an incalculable debt of gratitude. You see, his work on probability theory…created the foundations upon which all retirement income planning software is now based.

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