Life After Work - Will I Be "OK"?

  When Social Security was signed into law in 1935, the age of sixty-five was set as the full retirement age.   Not long after, pension plans began to use sixty-five as the age at which benefits would be paid.   Following this trend, Medicare allowed enrollment at 65 as well.   Consequently, we now routinely think of sixty-five as the age at which people should retire.   But that’s not what happens in reality.   Studies have routinely concluded that the actual average retirement age is 61-62 years old - and typically not because people were financially able to retire.   A 2025 AARP study found that more than 1 in 3 people retired not out of choice, but because they had to.   Either for health reasons, family support reasons or because they lost their job ( How Older Americans View the Labor Market ).   Only 1 out of 5 retired because they had enough money to retire. The message here is that while you might be planning for retirement at th...

  To say the stock market has been volatile lately would be an understatement.    Yesterday , the S&P 500 was down almost 150 points in the first 30 minutes only to end the day with a gain of 56 points.   Despite these daily swings, as you can see from the chart below, the market has been relatively flat since early October. Source: Yahoo Finance This type of volatility can make any investor nervous – especially retirees.   I’ve had numerous conversations with my retired former colleagues since I retired last July.   And one thing that is almost universal is that hitting a home run is no longer the goal for our retirement portfolio.   The goal is now to consistently hit singles and doubles.   The fear of seeing our retirement nest egg go down significantly greatly outweighs the desire to see it increase significantly.   So, the question becomes, how do we achieve this goal in an investing environment with such uncertainty and almost...

  This past weekend I had dinner with a former business associate.   Amongst other things, he asked me what I missed now that I’m retired.   That question gave me pause.   When you retire, you mostly focus on the things you now have time to do that you couldn’t do while working.   I hadn’t really thought much about what I missed about working. One answer did come immediately to mind.   I missed the people I worked with.   Many of them became, and continue to be, good friends.   While I still see them occasionally, it’s just not the same.   And it’s more than just a friendship.   We worked together towards common goals.   We were a team and we had each other’s backs.   We took great pride in the service we provided to our clients each day.   And we all benefited from our success.   We were in it together.   That’s virtually impossible to replace once you retire.   I get some of that same feeling in my sof...

  In a recent interview on the Moonshots with Peter Diamandis podcast ( Elon Musk on AGI Timeline, US vs China, Job Markets, Clean Energy & Humanoid Robots | 220 ), Elon Musk said “Don’t worry about squirreling money away for retirement in like 10 or 20 years, it won’t matter…You won’t need to save for retirement.   If any of the things we’ve said are true, saving for retirement will be irrelevant.”   Now that’s a bold prediction.   And whatever your thoughts about Musk are, there’s no denying that he is extremely intelligent and one of the best visionaries in the last 100 years.   Therefore, his opinions, no matter how crazy they may seem, need to at least be considered. The basic premise of his bold prediction is that the by the end of the year, the intelligence of AI will surpass human intelligence.   More importantly, AI will be able to improve itself at such a rapid pace that AI and robotics will start to create massive abundance.   When t...

  Last week I shared my theory as to why it’s possible to get for guaranteed lifetime income from a fixed indexed annuity (FIA) versus either a single premium immediate annuity (SPIA) despite that fact that the FIA can be cashed it at anytime and a SPIA cannot ( Understand Your Options Before Committing a Large Sum to Providing Guaranteed Income For Life by Scott Stolz, CFP, RICP (week 32) .   I explained that some insurance companies are counting on a significant percentage of the policyholders to use these policies inefficiently by either waiting until an advanced age to begin taking the income or cashing the policy in.   Either of these choices would mean the insurance company would never have to pay the guaranteed income amount out of its own pocket.   The company would essentially only distribute the policyholder’s own money back to him or her. But what if this assumption turns out to be wrong?   What if everyone actually starts taking the income in the...

  A friend called me last week to get my opinion on an annuity recommendation he received from his financial advisor.   Here’s the scenario.   He’s looking to retire at the end of 2028 when he will be 67 and his wife will be 65.   He plans to apply for Social Security at that time.   Based on his expected expenses and Social Security benefits he wants to add $40,000 per year in guaranteed income in order to cover his essential expenses.   His financial advisor recommended he fill the income gap by putting $745,000 into an annuity that will pay $40,000 a year for as long as he or his wife is alive, with a minimum guarantee period of 20 years should they both die prior to 2048 (joint life with 20 years certain).   He liked the idea of getting the income for life, but he was uncomfortable with putting so much of his retirement savings into any single investment – especially an annuity.   Hence, his call to me.   While everyone likes the idea...