My "plan" is that portfolio growth and social security COLA will keep up with inflation. Research also shows that real spending may also decline with age (the retirement spending smile). We have only been retired a short time so we shall see, but I am interested in others lived experience. Ken
Interesting. We are delaying social security to reduce future RMDs! We are drawing down our IRAs for living expenses while we wait for social security, thus reducing our IRA balance. Ken
Dan, this is my first year as an AARP tax preparer in Fort Wayne, IN. I would characterize the experience as eye-opening. It has been educational for me to get out of the finance/retirement nerd bubble and see how others view the world, both financially and otherwise.
We are one year into retirement and have about five years' worth of cash and short-term bonds so no immediate concerns. I will rebalance into stocks next week to get back to target allocations. We rebalance quarterly per our investment policy statement. The IPS forces us to mechanically sell high(er) and buy low(er) every quarter and eliminates second guessing.
I put private credit and private equity in my "too hard" pile. Between the opacity and the lockup periods, I can't justify the trade-off for a few (maybe) extra return points. If they get to the point that they need to raise funds from 401(k) savers, I say let them go through the public markets, with all of the associated disclosures and regulations. Most won't need them to reach their goals.
I suspect many younger people are saving in Roth 401(k) accounts now (that's what my kids do) but they weren't available to many of us boomers until more recently. Our main retirement savings vehicle was the traditional 401(k) so we find ourselves with a heavy allocation to pre-tax accounts. Particularly for funds to be passed to the next generation, the Roth is an attractive option. I feel the incentive is less strong for RMD reduction. That said, it seems like the current push in the financial press to convert, convert, convert has gone a bit far.
I really appreciate this article, William. You have clearly given this a lot of thought. The approach you describe is similar to what is referred to as Coast FIRE; Once your future "number" has been achieved, you stop or significantly reduce contributions. Personally, I was never that confident that I knew what the balance would be at retirement, so I kept making significant contributions right up to the end of my employment. I may have oversaved, but that was a risk I was willing to take. ;)
Our preliminary estimate for 2025 is 13.5% Fed and 4.4% State effective/average rate. Looking back at our earnings history, most of the funds we are living on today were deferred into our pre-tax 401(k) accounts at marginal 28% or 25% rates before 2018 and 22% after. It seems our tax rate in retirement IS lower than while working if you compare on that basis.
Comments
My "plan" is that portfolio growth and social security COLA will keep up with inflation. Research also shows that real spending may also decline with age (the retirement spending smile). We have only been retired a short time so we shall see, but I am interested in others lived experience. Ken
Post: Coping with inflation in retirement, what’s the plan?
Link to comment from March 30, 2026
Interesting. We are delaying social security to reduce future RMDs! We are drawing down our IRAs for living expenses while we wait for social security, thus reducing our IRA balance. Ken
Post: Something to Think About
Link to comment from March 29, 2026
Dan, this is my first year as an AARP tax preparer in Fort Wayne, IN. I would characterize the experience as eye-opening. It has been educational for me to get out of the finance/retirement nerd bubble and see how others view the world, both financially and otherwise.
Post: Debriefing
Link to comment from March 28, 2026
We are one year into retirement and have about five years' worth of cash and short-term bonds so no immediate concerns. I will rebalance into stocks next week to get back to target allocations. We rebalance quarterly per our investment policy statement. The IPS forces us to mechanically sell high(er) and buy low(er) every quarter and eliminates second guessing.
Post: Any concern?
Link to comment from March 28, 2026
I put private credit and private equity in my "too hard" pile. Between the opacity and the lockup periods, I can't justify the trade-off for a few (maybe) extra return points. If they get to the point that they need to raise funds from 401(k) savers, I say let them go through the public markets, with all of the associated disclosures and regulations. Most won't need them to reach their goals.
Post: Private Credit Stress?
Link to comment from March 27, 2026
I suspect many younger people are saving in Roth 401(k) accounts now (that's what my kids do) but they weren't available to many of us boomers until more recently. Our main retirement savings vehicle was the traditional 401(k) so we find ourselves with a heavy allocation to pre-tax accounts. Particularly for funds to be passed to the next generation, the Roth is an attractive option. I feel the incentive is less strong for RMD reduction. That said, it seems like the current push in the financial press to convert, convert, convert has gone a bit far.
Post: Something to Think About
Link to comment from March 25, 2026
Totally agree with this philosophy. In addition, my late father often said, "the harder I work, the luckier I get".
Post: When Luck Rises, Be Ready to Dig
Link to comment from March 19, 2026
I really appreciate this article, William. You have clearly given this a lot of thought. The approach you describe is similar to what is referred to as Coast FIRE; Once your future "number" has been achieved, you stop or significantly reduce contributions. Personally, I was never that confident that I knew what the balance would be at retirement, so I kept making significant contributions right up to the end of my employment. I may have oversaved, but that was a risk I was willing to take. ;)
Post: Should You Stop Contributing To Your IRA?
Link to comment from February 10, 2026
Our preliminary estimate for 2025 is 13.5% Fed and 4.4% State effective/average rate. Looking back at our earnings history, most of the funds we are living on today were deferred into our pre-tax 401(k) accounts at marginal 28% or 25% rates before 2018 and 22% after. It seems our tax rate in retirement IS lower than while working if you compare on that basis.
Post: Your effective tax rate
Link to comment from February 1, 2026
Home equity line of credit.
Post: Advice I give to anyone who’ll listen!
Link to comment from January 31, 2026