Life After Work - Will I Be "OK"?

  About 35 years ago I began regularly asking audiences at my speaking engagements whether or not they expected to receive Social Security benefits when they retired.   Even back then, I would see about 1/3 of the crowd raise their hand to vote “no”.   But I noticed something interesting when conducting this very informal and unscientific poll.   Virtually every raised hand belonged to someone below the age of 50.   The older people in the audience seemed to consistently believe they were going to squeeze by before Social Security ran out of money.   Interestingly, these percentages have not changed much over time.   According to a 2023 survey conducted by the Nationwide Retirement Institute® (of Nationwide Life Insurance Co.), more than 40% of those surveyed below the age of 42 believe they will never receive Social Security Benefits.   That compares to just 12% for those 59 years old or older. 1      However, three of four o...

  The Wall Street Journal recently published an article entitled “ Five Financial Blind Spots that Burden Grieving Spouses.” ( Five Financial Blind Spots That Burden Grieving Spouses - WSJ   These blind spots included unexpected debt and/or expenses, potentially higher tax brackets, challenges due to a lack of credit history and being locked out of financial accounts if that account(s) is only in the deceased spouses name.   The article correctly suggests that spouses have regular financial discussions so that both spouses understand their financial situation.   It goes on to recommend that “… If a spouse won’t commit to learning the details, it’s especially important for the other spouse to keep detailed records for the survivor….”   I’m going to take that advice one step further.   If you only do one thing I suggest in these blogs, it’s that you go to Everplans.com and open an account.   And no, Everplans is not paying me to say this.   Although...

  Last week my retirement reached the 6-month mark.   My wife loves to do “check-ins,” so she asked me how I’m doing.   Since a lot of people struggle with the transition to retirement, it was actually a very valid and thought-provoking question.   After a brief pause I could truthfully say I thought I had handled my first six months pretty well.   According to a recent article in Rethinking65 ( Mapping Out the First 90 Days of Retirement, Financial Planning Articles for Financial Advisors & Wealth Managers ,) “the average retiree needs to fill 40% of their waking time.”   While that was one of my biggest initial concerns, it has really not proven to be a problem.   It’s amazing how much time is taken up when you commit to playing softball 3 mornings per week.   And this weekly blog gives me a much-needed regular task.   In addition, my wife and I are working on a new Roundtable with Saltzman Associates ( Summary - Business Owner Transiti...

      Every week Barron’s does a column called “Income Investing”.   As a retiree, income is important to me, therefore I always check to see what they suggest as a possible income solution.   The problem is that like I mentioned in week 13 ( Retirement "Income" or Retirement "Paychecks"? - (week 13) , Wall Street’s definition of “income” is very different from mine.   I’ve incorporated lifetime guaranteed income into my retirement plan that I plan to turn on when I reach the age of 68.   This “income” will be provided by Social Security and 3 different annuities.   Each will deposit money into my checking account that will become the source to cover my essential expenses and most of my discretionary expenses as well.   Until age 68, these expenses will be covered by an inherited IRA that the tax codes says I must liquidate anyway.   In contrast, Wall Street defines income investing as any security that pays out money.   Thi...

  My weekly Barron’s Retirement email pointed out that a 60/40 investor that has not rebalanced since 2020 could now have a 76/24 portfolio due to the strong equity markets over that period.   It went on to say “…that’s probably too much risk for many retired investors.”   It of course suggested that retirees in this situation replace some of their equity positions with bonds in order to get back to the commonly used 60/40 portfolio.   That made me wonder how did a 60% equity (U.S. and global stocks) and 40% bond portfolio become the standard for most clients.   So, I asked the expert – ChatGPT.   I found ChatGPT’s answer to be very thorough and comprehensive, but it mostly came down to this part of the answer: The 60/40 portfolio has delivered: Solid long-term returns Lower volatility than all-stock portfolios Smaller drawdowns in most market crises For example, over the past 50+ years, the 60/40 has produced 6–8% average an...

  People’s fear about their financial health in retirement can be condensed into the one question almost every retiree seeks the answer to – “Will I Be OK?”   I’ve mentioned in several blogs that because no one knows how long you will live, what returns you will earn on your retirement portfolio and what unexpected expenses you will have; no one can answer that question with 100% certainty.   The goal therefore is to put strategies in place to protect against those 3 unknowns.   I refer to these strategies as building moats around a retirement portfolio.   I can protect myself against living too long by creating a guaranteed income for life.   I can protect against a deep and painful bear market by diversifying my portfolio and adding investments that are designed to protect against a large market decline.   But protecting against a large, unknown expense is trickier because that expense can be caused by many things and it can come at any time.   ...