In Retirement

A friend from London phoned me on Monday for a catch-up. He’s a typical Londoner and likes to talk, which is my polite way of saying the conversation was rather one-sided. He’s been a self-employed IT consultant for the last few years and was buzzing about his imminent move back into paid employment.
He spent our chat describing his plans for the role, his impressions of the business and its key staff, and how he intends to use the regular paycheck as a springboard into retirement in five years.

I see a lot discussed about using cash and bonds in retirement.  I’ve wondered why using portfolio income (interest and dividends) isn’t discussed to supplement or as an alternate to withdrawals.
I’ve thought about using income temporarily during market downturns to reduce cash and bond allocations.
What do you think and who has experience with this strategy?

Readers of HD know I’m a big fan of a steady income stream in retirement, obsessed perhaps. You may not agree on how that can be achieved, but as interest rates have risen and likely to go higher, is now the time to consider an immediate annuity to supplement SS income or perhaps just enough to cover some key monthly bills?
With higher rates you get more for your money. MarketWatch just had an article with a chart showing how the monthly payment for a fixed annuity purchase grows with higher rates.

There are policy makers and think tanks who believe that Medigap coverage, especially Plan G (the most popular option) insulates retirees from out of pocket costs too much and as a result encourages them to use unnecessary health care, to not care what it costs.
I don’t know about you, but I have no desire to use any healthcare beyond what is absolutely necessary. In any case, discussions are underway to increase the out of pocket costs under Medicare with the idea of saving federal funds.

It was my mother’s birthday, so I placed some flowers on her grave. I learned a lot about growing old from taking care of her.
When I was planning for retirement, I was mostly concerned about having enough money and how I was going to stay busy. But after spending time with my mother, I realized there was something more important—or at least just as important.
It was companionship.
I learned from my mother that no matter how many people you have in your life,

Projections for the 2027 COLA are around 3.5%, but that could be the last such increase.
As part the effort to fix SS solvency, the idea of a flat fixed dollar COLA has surfaced again. In short that would mean most retirees would receive less than under the current calculation. 
For example, the COLA adjustment would be based on a certain level of benefits, say the 20th percentile. That is currently about $1,200 to $1,300 per month. 

I am incensed when I read nonsense posted on social media about social security – “Congress stole the SS funds and never paid it back,” “there would be plenty of money if we didn’t give it to people not eligible” and worse. All nonsense.
Is it worth me getting upset over? It is, because uninformed people believe it and now it appears people are acting on the lies and misinformation they read and hear. They don’t understand that SS can’t go bankrupt or run out of money and that there is a different between SS’s ongoing revenue and the reserve trust.

Geoffrey Schmidt is a CPA and retirement planning expert with a YouTube channel called HolySchmidt. 
In a recent video “The Map is Wrong” he analyzed the five best and worst states to retire and challenged the idea that the best choice was states with no income tax. He based his analysis on median home values and retiree incomes. 
He used the estimated combined spending on property taxes, sales taxes, income taxes and property insurance.  When added together the results showed no income tax is sometimes a misleading criteria,

We all get notified on near regular basis on the compromised data but these numbers are staggering. Clark has some common sense advice on how best to play defense.
https://clark.com/credit/data-breach-credit-freeze/?utm_source=Email&utm_medium=Newsletter&utm_campaign=ClarkDailyNewsletter&_bhlid=909bb4deb2191a6a5b918be72d6953a9308bf113
I would add freezing your SSN via the e-verify site (so your SSN can’t be misused), and I think this is especially true for those of us who are retired.

In 2002 the Social Security Trustees explicitly called on Congress in their report summary to act sooner rather than later fixing SS funding
They emphasized that taking early legislative action would allow changes to be phased in gradually and give workers time to adjust. They issued the same warning in every report since.
For twenty four years Congress and each administration has ignored those warnings.
Those trustees reports were signed by the Secretary of the Treasury,

With all that’s going on with SS (COLA, taxation, potential cuts) and some changes certain in the next six years, is it time to rethink the income replacement percentage you shoot for in retirement?
I won’t give my theory again, one or more of the Clements family will be upset with me😅
However, self preservation, a hedge against longevity, hence inflation and peace of mind still tells me that a goal of replacing 60, 70 or 80% of pre retirement income is not sufficient.

I noticed a book excerpt in the Harvard Gazette yesterday (5 Aug 2026) that goes into some depth on a topic that is raised here on HD with some frequency, notably by R. D. Quinn, most recently with regard to the Social Security issue. The book in question is:
“Gerontocracy in America: How the Old Are Hoarding Power and Wealth ― and What to Do About It” by Samuel Moyn, J.D. ’01, and published by Farrar,

A recent Barron’s article notes, “for most retirees, the greatest fear is not death—it is running out of money before they die.” As one survey they cite put it, “The prospect of running out of money in retirement is scarier to more people than death.” The same article described a new tool that promises to estimate more accurately how long we are likely to live. Life expectancy is one of the most important assumptions in any retirement plan because it answers a fundamental question: How long will my savings need to last?

A retired actuary name Ken Steiner has a article today, 8/4/2026, titled Social Security’s Short-Term Crisis,  published on Advisor Perspectives.
I like Mr. Steiner’s thinking on breaking the funding or reduction of the future social security shortfall problem into short and long components.  His discussion of one alternative is a three-year COLA freeze starting around 2033. If you are part of the grandfathered group who is receiving a current social security benefit you may want to consider this possibility  in your planning.

Long-time Lurker who read Johnathan’s WSJ columns for decades and had several delightful conversation with him.
 
I thought I would share “Yet-Another Social Security Spreadsheet Analysis on what Age to Start taking Benefits” as I would appreciate (candid) commentary on how I can improve this from the financial wizards at Humble Dollar.
 
Thanks in advance for any suggestions.