The Prudent Professor

Edwin M. Bridges was Professor Emeritus, Stanford University, and had extensive background in higher education. Prior to joining the Stanford University faculty in 1974, he taught at Washington University (St. Louis), The University of Chicago and University of California (Santa Barbara). He was internationally known for his work on problem based learning and has worked with faculty from a variety of disciplines in China and the Unites States. During his thirty-five year career in higher education, he consulted with numerous organizations, including the World Health Organization, the World Bank, and the New York City Public Schools. Professor Bridges received two lifetime achievement awards for his contributions of the field of educational administration and is listed in Who’s Who in America and Who’s Who in the World. At the age of twenty-six, he was appointed a high school principal; the following year he was chosen as one of three Outstanding Young Men of Indiana. Since retiring in 1999, Ed lived with his wife Marjorie, in an historic home on the Stanford University Campus. Three years ago, they celebrated their Golden Wedding Anniversary. In retirement, he devoted much of his time to activities that he neglected during his career as a professor – investing and retirement planning. After reading hundreds of books and articles on these subjects, he decided to share the lessons he learned with friends, colleagues, family, former students and others through his writing and public speaking. He brought these lessons to life by drawing on his personal setbacks, mistakes, and triumphs in investing and planning for retirement. We deeply mourn the loss of author, teacher, and friend Edwin M. Bridges (March 7, 2019). Brian D. Bridges is a registered investment adviser in the state of California and a trained financial planner with a strong background in counseling. Prior to entering the fields of financial planning and life-enhancement counseling, Brian provided e

Preface Introduction. A Preview of Retirement Part One. Saving for Retirement1 Getting There. A Look in the Rearview Mirror 2 How Much Do I Need to Save? 3 Do Investment Costs Matter? 4 Should I Invest in Index or Actively Managed Funds? 3 5 What Should My Mix of Assets Be? 6 Why Should I Diversify? 7 What Investing Principles Would Serve Me Well? 8 How Do I Build an Investment Portfolio? 9 What Role Should TIAA-CREF Retirement Annuities Play in My Investment Portfolio? 10 What Role Should TIAA-CREF Retirement Class Mutual Funds Play in My Investment Portfolio? Part Two. Preretirement Considerations 11 Can I Afford to Retire? 12 Should I Purchase an Annuity? 13 When Should I Start Taking Social Security? 14 Do I Need Long-Term Care Insurance? 15 How Much Should I Set Aside for Health Insurance? 16 How Do I Put My Financial House in Order? 17 Should We Sell Our Home and Relocate? 18 Is a Reverse Mortgage Right for Me? 19 How Should I Use a Financial Planner? 20 Can I Count on TIAA-CREF’s Financial Services? Part Three. Creating a Pension Plan21 How Do I Maximize My Retirement Income and Financial Security? 22 What Are My Income Options With TIAA-CREF? 23 Should I Incorporate a TIAA Traditional Payout Annuity Into My Pension Plan? 24 Should I Incorporate a TIAA-CREF Variable-Income Annuity Into My Pension Plan? 25 Should I Use Systematic Withdrawal as a Major Source of My Pension Income in Retirement? Part Four. Remaining Solvent26 Mirror, Mirror on the Wall, What Is the Greatest Threat of All? 27 How Can I Protect My Nest Egg Against Huge Losses? 28 How Can I Protect My Nest Egg Against Fraud? Part Five. Beyond Retirement29 What If I Finish in the Black? 30 Money, Happiness, and a Fulfilling Retirement Appendixes A Illustration B Possible Questions to Ask When Seeking Financial Advice C Experiences With Vanguard’s Financial Planning Services D Planning Tools & Calculators E Special Issues for Women F Must Reading for an Informed Investor G Determining Minimum Distribution Requirement H Operating Expenses for CREF Variable Annuity Accounts, 1997–2008 I Total Investment Costs for the CREF Variable Equity Accounts J Publications K TIAA-CREF. Strengths, Shortcomings, and Needed Changes L Formula for Calculating Annual Income Increases/Decreases From Variable Annuities M Historic Returns. Worst Case, One Year N Annual Income Changes for TIAA-CREF Variable Annuity Accounts, 1996–2005 O TIAA-CREF Variable Income Changes, 2001–2003 P Annual Review of Your Savings and Retirement Plan Investing Terms References About the Authors Index