WHEN I WAS IN HIGH school, I had a summer job at a machine shop. My job was to deburr large cutting tools known as end mills. I would take a penny and run it over the cutting edge of the tool to smooth it out. Once I finished my job, the tools were sent to another facility for the next operation.
There was a young man in his 20s named Max whose job was to load these heavy boxes of tools onto a truck and transport them to the other facility,

INFLATION IS BAD news for bond investors, but it’s really terrible for annuitants and those receiving company pensions. Bond investors can at least reinvest maturing bonds in newer bonds paying higher yields. But most income annuities and pensions pay a fixed monthly benefit for life. In fact, you can no longer even buy inflation-adjusted single-premium immediate annuities. Meanwhile, just 7% of all private-sector pensioners received automatic cost-of-living increases, according to a 2000 survey by the Bureau of Labor Statistics.

AS A HAPPILY RETIRED 69-year-old, I still remember a conversation I had with an acquaintance two decades ago. The gentleman had had many years in the military, followed by time as a city police officer. He had recently retired—forever—from his third career in federal law enforcement. That meant he was sitting pretty with three different pensions. To top it all off, he was probably in his mid-50s.
Even though my own retirement was still many years away,

I’VE HAD SOME dreadful jobs in my life. I spent one summer putting metal plates under a huge press for eight hours a day. Once the plates were in the right position, I’d push some buttons that would cause the press to crash down and shape the metal into something useful.
The goal was to work fast because that meant more pay. Some of the workers disabled the safety features so they could produce more widgets and earn extra money.

“SHOULD YOU BUY an annuity from Social Security?” That’s the title of a paper released by Boston College’s Center for Retirement Research (CRR) in May 2012. It’s one of the best articles I’ve ever read about the Social Security claiming decision—and it’s had a big impact on my thinking.
Most of us know what an income annuity is: You hand over a sum of money and, in return, receive a check every month for the rest of your life or for a specified period of time.

IT’S A QUESTION that gets asked all the time: What’s the best age to start Social Security benefits?

The discussion quickly deteriorates into calculating the breakeven point. Are you better off with a lower benefit for a longer period or a larger benefit for a shorter time—that is, assuming you live to your actuarial life expectancy? What if you die before you reach breakeven? Yeah, what if? You won’t be around to complete the final calculation.

WHEN I RETIRED, friends would ask me how I was going to celebrate my retirement. A buddy suggested I take a cruise around the world. Another friend said, “Why don’t you explore Europe?” I did neither. I wound up exploring San Diego, which is about 120 miles from my home. That’s pretty much how my early retirement went. There were no expensive vacations or large purchases.
I didn’t feel comfortable spending a lot of money when I first retired.

ONE OF THE GREAT mysteries in finance is the reluctance of retirees to annuitize more of their portfolio. Annuities—and here I’m referring to plain-vanilla income annuities—provide a guaranteed income stream for life. Examples include Social Security and company pensions. Income annuities can also be purchased from insurance companies. When you buy an immediate-fixed annuity from an insurer, you exchange a lump sum for a guaranteed, monthly payout for the remainder of your life and,

THE MUCH-DEBATED 4% rule—which I wrote about back in July—is a popular way to think about portfolio withdrawals in retirement. But it isn’t the only way. Another approach, called the bucket system, is also worth understanding. Below is some background.
What is the bucket system? As its name suggests, an investor divides his or her portfolio into multiple containers. Each container, or bucket, is then assigned a different role.
The most popular implementation of the bucket system involves three containers: The first is earmarked for a year or two of spending and is held entirely in cash.

THE GOVERNMENT will be able to pay full Social Security benefits only until 2033, according to the latest trustees’ report on the Social Security and Medicare trust funds. After that, Social Security’s trust fund will be depleted—and it could only cover 76% of scheduled benefits with the money it collects in payroll taxes.
The timetable is even worse for Medicare Part A, which pays for inpatient hospital care. Its trust fund will be empty in 2026.

IT’S BEEN WIDELY reported that the Social Security Administration will likely announce a roughly 6% cost-of-living adjustment (COLA) for 2022. That would be the largest increase in monthly benefits since 1982, when retirees’ checks climbed 7.4%.
But the impact on retirees is more complicated than you might imagine. Boston College’s Center for Retirement Research recently published a paper entitled, “The Impact of Inflation on Social Security Benefits.” The paper investigates three ways that inflation interacts with benefits.

IF SOMEONE ASKS ME what my favorite day is, I’d have to say the second Wednesday of the month. That’s when my Social Security check gets deposited into my checking account. I’ve received three checks so far and each one has been a joy. The experts might be right when they say retirees who have predictable income are happier. At age 70, I feel like a little boy who just got his first bicycle.

IN CASE YOU’RE wondering, that means, “Where is my blog?”

In retirement, it’s important to keep busy doing things you enjoy. For me, that’s blogging. It’s fun and I learn from readers’ comments.

On Aug. 17, I received an email addressed to “Karen” saying my site’s domain was expiring. Who’s Karen? It must be a scam, so I ignored it. The next day, my blog couldn’t be found.

I logged on to the domain seller and paid the fee.

WHEN I GIVE presentations on retirement, I ask folks about their worries. For pre-retirees, their biggest concern is not having enough money. That’s no surprise. Financial firms spend millions pushing the importance of saving for retirement.
But when I pose the same question to recent retirees, I get a completely different answer. Overwhelmingly, their biggest concern is finding purpose in retirement. Similar results emerge from a recent survey by Age Wave and Edward Jones,

WHEN YOU’VE BEEN saving and investing for a long time, you have a long list of things you wish you could do over. Like hanging on to Apple, instead of selling at $85 a share. Like buying an index fund, instead of that hot mutual fund that quickly turned cold. My wife calls these “what ifs.” We have a rule not to talk about them because they almost always lead to arguments about who was wrong.