Why 401k and other defined contribution schemes are flawed, leading to a generation of workers unprepared for retirement. What are the solutions to fix the mess. Topics covered include: Why 401k and other defined contributions haven't worked, despite their popularity Why defined benefit pension plans declined Why 401k plans are treated like emergency funds How to combine the best of 401k and defined benefit pension plans Show Notes The Shift that Redefined … [Read more...]
483 Plus: Private Credit, BDCs, CLOs, Cash Balances and Is This Portfolio Too Aggressive
In Plus episode 483, we analyze the Virtus Private Credit ETF (VPC), which invests in business development companies (BDCs), leveraged loans, and collateralized loan obligations (CLOs). We review the characteristics of all those asset categories. We also discuss the appropriate cash balance for retirees and consider whether a retired member's portfolio has too much in stocks. … [Read more...]
460: Should You Be Invested 100% in Stocks Before and During Retirement? A Recent Study Says Yes.
The pros and cons of investing your retirement assets 100% in equity, including half in international stocks. Why the 4% spending rule is too aggressive. Topics covered include: Why historical asset class return studies that use only U.S. data are biased How researchers build a broader database to study retirement outcomes and spending rates How a 100% stock portfolio performed compared to balanced portfolios and target date funds Why investors should have half their assets … [Read more...]
383 Plus: Analyzing ETFs, the Debt Cycle, and Investing When Retiring Outside Your Home Country
In Plus Episode 383, we review the criteria for selecting and comparing ETFs. We discuss how to invest near-term living expenses when retired outside one's home country, particularly given U.S. tax laws on Passive Foreign Investment Companies. Finally, we analyze the current debt cycle and whether that should change how we invest. … [Read more...]
371: Find Your Retirement Investing and Living Style
What are the pros and cons of the four approaches to managing retirement savings. How to implement a bucketing or time segmentation retirement investing approach. Topics covered include: Why it takes time to find a retirement pattern that fits How retirement investing is a balance between safety-first and probability-based as well as maintaining optionality and committing. How total return investing differs from a safety-first approach What are products allow for a risk floor … [Read more...]
326: The New Math of Retirement Spending and Investing
How should individuals invest and spend in retirement with interest rates so low, stock valuations high, and inflation uncertain. Why retirement managed payout funds and income replacement funds failed. Topics covered include: How managed payout and income replacement funds compare to immediate annuitiesWhy Vanguard and Fidelity changed the objective of their retiree focused income replacement and managed payout fundsHow fixed annuities workHow retirees should combine annuities with … [Read more...]
279: Why All Retirees Should Consider an Income Annuity
Retirees face two big challenges. The first is how to invest their retirement assets. The second is determining how much they can withdraw each year from their retirement portfolios. What many retirees don’t realize is these challenges can be greatly reduced by paying for essential retirement expenses from guaranteed income sources. Guaranteed income sources include Social Security, pension plans, and annuities. Surprisingly, only about 10% of retirees partially fund their retirement … [Read more...]
242 Plus: Alternative Inflation Measures, Stock Buybacks and Retirement Spending
In Plus episode 242 for the week of March 2, 2019 we look at how U.S. inflation rates are calculated differently now than in 1990 and 1980, resulting in lower reported inflation. We review the impact of stock buybacks on earnings per share growth and how that can impact stock returns. We explore how corporate debt balances can serve as a constraint to elevated stock buyback levels. Finally, we explore why we need flexibility in terms of our retirement spending given changing investment … [Read more...]
169 Plus: Inflation and Trust, Self Directed IRAs and Reducing Stock Exposure as Retirement Approaches
This week August 18, 2017 on Money For the Rest of Us Plus, we see why the most important thing about any currency is whether it is trusted. We evaluate using a self-directed IRA to invest in the real estate crowdfunding platform Peer Street and how a member could go about investing $120,000 on the platform. Finally, we discuss how a member could approach the challenge of reducing stock exposure as he approaches retirement given his concerns about incurring capital gains tax. 169 … [Read more...]
161: What You Need To Know About Retirement Calculators
How retirement planning and retirement spending calculators work and what are some of their flaws. Why figuring out how much money you will have when you retire and how long it will last is a lot like the work hydrologists do to figure out whether Phoenix or Los Angeles will run out of water. Photo by Andrew Branch In this episode you’ll learn: How aquifers, aqueducts, rivers and springs are like retirement assets. What is water banking. What is the difference between … [Read more...]
