Life After Work - Will I Be "OK"?

      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.   ...