On this episode of The Long View, Bill Bernstein, neurologist turned investment advisor and author, joins Morningstar’s Christine Benz and Jeff Ptak for the third time to discuss retirement, risk, return, inflation, and more.
Working longer can be a win-win-win from a financial standpoint, reducing portfolio withdrawals and improving portfolio longevity, allowing for other financially beneficial decisions like delayed Social Security, and
Among the immediate challenges pre-retirees face as they consider their retirement plans, nearly two-thirds said inflation is their biggest concern, followed by a potential recession, market volatility, and taxes. Many are
Whereas our “base case” system of fixed real withdrawals pointed to a 3.8% starting withdrawal percentage as sustainable for a balanced portfolio over a 30-year horizon, the starting safe withdrawal rates for
What’s left over is the amount of cash flow that the portfolio will need to supply each year (in other words, the desired withdrawal amount, including income, capital gains, and outright withdrawals). To construct a
We have been running a study every year where we’ve been looking at what a starting safe withdrawal rate would be for people just embarking on retirement. I would say, retirees would maybe want to think about a
Like most U.S. retirement savings plans, target-date strategies are important and growing components of TSP. To offer a measure of independent analysis to L Fund investors and the advisors who serve
And I do think how it affects people depends very much on their financial circumstances and their age, what the situation is with management of healthcare costs, Social Security-claiming decisions. “ The Financial
But I like that process of revisiting a topic, whether it’s long-term care, or Social Security, or Medicare, and starting at the beginning again, because it’s so easy to get trapped in our own thinking and how we plan,
Finally, we’d love to get your feedback. If you have a comment or a guest idea, please email us at [email protected]. Until next time, thanks for joining us.
(Disclaimer: This recording is for informational purposes only and should not be considered investment advice. Opinions expressed are as of the date of recording. Such opinions are subject to change. The views and opinions of guests on this program are not necessarily those of Morningstar, Inc. and its affiliates. Morningstar and its affiliates are not affiliated with this guest or his or her business affiliates unless otherwise stated. Morningstar does not guarantee the accuracy, or the completeness of the data presented herein. Jeff Ptak is an employee of Morningstar Research Services LLC. Morningstar Research Services is a subsidiary of Morningstar, Inc. and is registered with and governed by the U.S. Securities and Exchange Commission. Morningstar Research Services shall not be responsible for any trading decisions, damages or other losses resulting from or related to the information, data analysis, or opinions, or their use. Past performance is not a guarantee of future results. All investments are subject to investment risk, including possible loss of principal. Individuals should seriously consider if an investment is suitable for them by referencing their own financial position, investment objectives and risk profile before making any investment decision.)
Target-Date Retirement Funds in 4 ChartsNavigating retirement involves a host of problems. These funds present a range of solutions.
If you are thinking about deferring Social Security and that you may need to spend more from your portfolio in the period leading up to that, that may be OK. Can you talk about the benefits of reducing spending in
Key Takeaways
Long-term care isn’t typically covered by traditional insurance or Medicare.
Traditional tax-deferred accounts are good receptacles for long-term-care costs.
Home equity can be a solution to help cover some expenses.