Always appreciate hearing Christine’s thoughts. Thanks for having her on! Would also love to see Michael Kitces on discussing asset allocation, withdrawal rates, effects of being flexible and ratcheting strategies during/approaching retirement years.
Thanks Consuela and great job Christine. Am 2 years into retirement and only need limited fixed income at 5% return. We are 92% in equities that returned 30% in 2023 and this year should also be good. Keep emphasizing that there are many ways to make retirement work...
Another excellent interview. I would add that there is no substitute for budgeting, and that needs to tighten up in our 50's and 60's. Most retired people I see right now spend way too much money. We under estimate the chances of running out of money in our 80's.
Great stuff! I think the most important factor is the retiree's withdrawal strategy. A retiree that is willing to link withdrawals to market performance, can take a higher initial withdrawal rate, adjusting it within predetermined upper/lower limits each year, or in real time. Many analyses have shown that dynamic 'guardrails' spending strategies enable higher lifelong spending, although it does require more ongoing involvement from the retiree, which some will not want to deal with. Personally, I've always been hands on with my portfolio, so it's not a big deal for me, so I plan to maintain a relatively high 75% stock allocation throughout retirement, which will be more volatile - requiring more frequent withdrawal adjustments, but it will almost certainly allow higher total income over my full retirement.
I am curious about these iShare iBonds ETFs, as after all they still hold bonds with their prices changing with interest rates, and investors will buy the ETF at different times throughout the life of the ETF. Since these are so new, does anyone have experience or is there any historical data showing that the principal invested in these ETFs was indeed returned in full when they reached their maturity and were liquidated?
Are there interest rate futures ETFs(taxed at 60% longterm capital gains rate + 40% top marginal tax rate…26.8% combined tax rate)? If not, we need them.
On individual bonds you don’t lose anything if you hold the bonds to maturity. Of course you are accepting a lower yield vs what you could get investing in current bonds so you need to weigh that into your decision.
Hello Ms. Benz. I hope this e-message finds you well. What do you think of the following plan? I have finalized my decision to invest in an IRA with three ETFs that have received a Gold rating from Morningstar. The first recommended ETF, SCHD, comes with a 33% allocation and has an expense ratio (ER) of 0.06%. The second recommended ETF, QQQM, also comes with a 33% allocation and has an ER of 0.15%. The third recommended ETF, VT, comes with a 34% allocation and has an ER of 0.07%.
If morning stars research studies changes the safe withdrawal from 3.3% in 2022 to over 4% next year, a 25% change, I would really question the validity of the research, accuracy of data, duration of data… How can any potential retirement take comfort in the study
@@Rainy_Day12234 Yes yield are higher….. … But a study should be extensive, should not be super sensitive to one event …it totally makes no sense… Wonders if the study went thru peers’ preview
@@Rainy_Day12234 So….. another dip and the safe withdrawal rate changes ? So how does one make sense of such pinning withdrawals rate? Somehow a study should be extensive, comprehensive and consistent, and not Super sensitive to single event . So either the previous study is erroneous or current is when compared to 1997 paper. Doesn’t an hyper inflation in a single year changes the whole paradigm then, when the net average just move a decimal ? I hope both papers went thru external peer reviews before publishing.
@@george6977 So if interest rate falling in near future, the withdrawal rate also decreases ? So how does one take comfort in a moving target? Increase in rate also imply in inflation. . I don’t really get it.
To each of your own, just purchased some annuity with 9% payout rate, along with my pension and CPP+OAS( I am in Canada) will cover all my daily expenses. So anything generated from my RRSP & TFSA are for my traveling and donations. Just in case I loss my marble, I should still have enough to live on.
What I'd like to see, is an end to these IDIOTIC R.M.D.s!! But..not for everyone..they should only apply to people who are 75 or older, AND; those who have a total NET-WORTH, including their primary residence (not INCOME) of $1,000,000 or greater. And, adjust that $1,000,000 figure annually for inflation.
It's idiotic to think that someone who put $ into a tax deferred retirement plan wouldn't understand that they eventually have to pay the tax. It's tax deferred - not tax forgiven.
@WEALTHTRACK. you produce excellent videos. People like Christine are really spot on with great advice. Of course, her recommendations are best understood by moderately sophisticated investors. Nice work!
Thank you for this educational material. CB does great work in my view.
A true gem and advocate for investors. She did an amazing job
with bogleheads’ conference available on RUclips. Thank you for hosting C. Benz.
Always appreciate hearing Christine’s thoughts. Thanks for having her on! Would also love to see Michael Kitces on discussing asset allocation, withdrawal rates, effects of being flexible and ratcheting strategies during/approaching retirement years.
Thanks Consuela and great job Christine. Am 2 years into retirement and only need limited fixed income at 5% return. We are 92% in equities that returned 30% in 2023 and this year should also be good. Keep emphasizing that there are many ways to make retirement work...
Helpful information.
Another excellent interview. I would add that there is no substitute for budgeting, and that needs to tighten up in our 50's and 60's. Most retired people I see right now spend way too much money. We under estimate the chances of running out of money in our 80's.
Thanks team for your sage wisdom, Perfect timing for me!
Great stuff! I think the most important factor is the retiree's withdrawal strategy. A retiree that is willing to link withdrawals to market performance, can take a higher initial withdrawal rate, adjusting it within predetermined upper/lower limits each year, or in real time. Many analyses have shown that dynamic 'guardrails' spending strategies enable higher lifelong spending, although it does require more ongoing involvement from the retiree, which some will not want to deal with. Personally, I've always been hands on with my portfolio, so it's not a big deal for me, so I plan to maintain a relatively high 75% stock allocation throughout retirement, which will be more volatile - requiring more frequent withdrawal adjustments, but it will almost certainly allow higher total income over my full retirement.
I am curious about these iShare iBonds ETFs, as after all they still hold bonds with their prices changing with interest rates, and investors will buy the ETF at different times throughout the life of the ETF. Since these are so new, does anyone have experience or is there any historical data showing that the principal invested in these ETFs was indeed returned in full when they reached their maturity and were liquidated?
Another really good session. Where is Part 2? Could you add a link in the info for this video? Thank you!
Are there interest rate futures ETFs(taxed at 60% longterm capital gains rate + 40% top marginal tax rate…26.8% combined tax rate)? If not, we need them.
Why does US insurer don’t have insurance for annuity? In Canada, we have up to $5000/month per insure guaranteed just like GIC has.
Annuities are guaranteed by the individual states in the U.S. They are usually guaranteed up to about $250,000.
On individual bonds you don’t lose anything if you hold the bonds to maturity. Of course you are accepting a lower yield vs what you could get investing in current bonds so you need to weigh that into your decision.
Corporate bankruptcy is a real risk you’re assuming.
I only buy Treasury bonds or AAA municipal or agency bonds. Never corporates.
Hello Ms. Benz. I hope this e-message finds you well.
What do you think of the following plan?
I have finalized my decision to invest in an IRA with three ETFs that have received a Gold rating from Morningstar.
The first recommended ETF, SCHD, comes with a 33% allocation and has an expense ratio (ER) of 0.06%.
The second recommended ETF, QQQM, also comes with a 33% allocation and has an ER of 0.15%.
The third recommended ETF, VT, comes with a 34% allocation and has an ER of 0.07%.
I remember when you could get 5% after tax low risk muni bonds(AAA). You now need a lot more capital to get the same income.
I just bought some municipal bonds at 4.4% and 4.5% below par. Long dated with call dates are anywhere from 3 years to 10 years+.
If morning stars research studies changes the safe withdrawal from 3.3% in 2022 to over 4% next year, a 25% change, I would really question the validity of the research, accuracy of data, duration of data…
How can any potential retirement take comfort in the study
Yields are higher…more income replaces the withdrawal
@@Rainy_Day12234
Yes yield are higher….. …
But a study should be extensive, should not be super sensitive to one event …it totally makes no sense…
Wonders if the study went thru peers’ preview
@@Rainy_Day12234
So….. another dip and the safe withdrawal rate changes ? So how does one make sense of such pinning withdrawals rate?
Somehow a study should be extensive, comprehensive and consistent, and not Super sensitive to single event . So either the previous study is erroneous or current is when compared to 1997 paper.
Doesn’t an hyper inflation in a single year changes the whole paradigm then, when the net average just move a decimal ?
I hope both papers went thru external peer reviews before publishing.
When interest rates were near zero so were bond yields, which took the safe withdrawal rate down.
@@george6977
So if interest rate falling in near future, the withdrawal rate also decreases ? So how does one take comfort in a moving target?
Increase in rate also imply in inflation. . I don’t really get it.
There is NEVER a benefit of an annuity unless you are the salesperson or insurance company.
She is describing a “very nice bump up” (15:33) to almost 9% guaranteed for the annuitant’s lifetime. $750/ month on a $100K policy.
To each of your own, just purchased some annuity with 9% payout rate, along with my pension and CPP+OAS( I am in Canada) will cover all my daily expenses. So anything generated from my RRSP & TFSA are for my traveling and donations. Just in case I loss my marble, I should still have enough to live on.
If you buy a $100,000 anunity, and you pass away much sooner than expected, you basically just gave away $100,000. No thanks for that deal.
Not true, Cletus. Do some homework.
Cash return rider could provide that your beneficiaries get paid.
You are showing your ignorance, you can get death payout & payout guaranteed rider on annuity. Why such an absolute response?
You can also buy a 20 year certain annuity. Check it out.
What I'd like to see, is an end to these IDIOTIC R.M.D.s!! But..not for everyone..they should only apply to people who are 75 or older, AND; those who have a total NET-WORTH, including their primary residence (not INCOME) of $1,000,000 or greater. And, adjust that $1,000,000 figure annually for inflation.
Just mean you haven’t done your retirement tax planning properly.
It's idiotic to think that someone who put $ into a tax deferred retirement plan wouldn't understand that they eventually have to pay the tax. It's tax deferred - not tax forgiven.
@WEALTHTRACK. you produce excellent videos. People like Christine are really spot on with great advice. Of course, her recommendations are best understood by moderately sophisticated investors. Nice work!