In Retirement

I’VE RECENTLY MADE the most significant change to my own portfolio in thirty five years. For the first time I’ve moved away from pure market-cap investing, tilting meaningfully toward Europe and Southeast Asia and bringing my US technology concentration down to around fifteen percent.
I’m retired. I don’t need to chase the outperformance that concentration might deliver, and I don’t need the potential volatility that comes with it. This is a personal position rather than any kind of recommendation;

A POPULAR JOKE about retirement is that it can be hard work. That’s because financial planning is like a jigsaw puzzle, and retirement often means rearranging the pieces.
In the past, I’ve discussed two key pieces of that puzzle: how to determine a sustainable portfolio withdrawal rate and how to decide on an effective asset allocation. But there’s one more piece of the puzzle to contend with: taxes. Especially if you’re planning to retire on the earlier side,

New research presented by Kiplinger shows significant variations in typical withdrawal rates. As you may suspect, some of that is based on age, marital status, the existence of a steady income stream and when the RMD kicks in. 
Among the interesting observations: “The “Lifetime income” effect: Retirees are willing to spend roughly 80% of their “lifetime income,” which includes Social Security, pensions, and annuities. But they are only willing to spend about half of what they could safely afford to from their investment assets,

Maybe not a scam, but certainly misleading. You have probably seen the ads for senior life insurance- no physical, no health questions- no problem protecting loved ones for $9.95 per month with premium guaranteed for life as long as you are not over age age 80.  What the ads don’t shout about is the $9.95 is “per unit”. Once you learn that, you need to find out what a unit of insurance represents.
What $9.95 a month will buy in terms of coverage varies by your age and the insurer.

Occasionally I read about a new method or model for determining your portfolio withdrawal rate during retirement, or a formula to use when setting your asset allocation. While there’s nothing wrong with organisations trying to make things simple with these important questions, I sometimes wonder about how the research is framed.
Normally it’s a respectable financial institution, quite often backed by research from an in-house team or an academic institution, sometimes a combination of both. I’m sure the data and back-testing is rigorous and the intention is genuinely to help people figure things out.

Regard my previous post: Need, yes. Deserve, no! Who “deserves” more?
Here is an e-mail I just received from the Senior Citizens League asking me to sign a petition. This is the broad brush, fiscally irresponsible approach I find misplaced.  
“SENIORS DESERVE RELIEF FROM INFLATION”
Note “deserve.” 
“Dear Richard,
Inflation continues to erode the value of seniors’ monthly Social Security checks and, for millions of older Americans, there’s no cushion left to absorb the blow.
This year’s modest COLA increase simply hasn’t kept pace with rising costs,

Social media is loaded with videos, posts and memes with a common theme- seniors deserve to pay little or no taxes and they deserve higher Social Security and Medicare benefits. Neither are generous enough for retirees they say. And then there is the standard living on a “fixed income”rhetoric- which virtually nobody does.
Many of the posts claim that Social Security is not enough to pay the bills and does not keep up with inflation. 
I am not opposed to assisting anyone in need regardless of age,

A relative couple of mine is living close to the bone. I’m not sure exactly why as they have two pensions (one military with COLA) plus Social Security and no mortgage. Even their property taxes are cut in half with subsidies. He had a good paying union job with good benefits his entire working life. Nevertheless, they seem to be scraping by. Both are in their 70s.
I recently learned they don’t have any income tax withheld from pensions or Social Security,

Seems like a simple question until you think about it. “Means” as living within ones “means” may mean something different to different people😳.
To me, “means” means no debt other than a mortgage and maybe an auto loan (maybe). Certainly no credit card balance at the end if the month  
What makes up the “means?” I say it’s all earnings that are or could be subject to FICA taxes if there were no limit. That means,

I WAS THINKING ABOUT Jonathan the other day on my morning walk, which happens more often than you might think. It’s hard not to think about him when you have HumbleDollar coasters in your living room and a HumbleDollar shopping bag in your car that you use for groceries. My wife confiscated the HumbleDollar cup I had been using for my morning tea, and it now has a new home in our bathroom holding her toothbrush and toothpaste.

I retired at 58 years young. I feel there’s always been tension in the retirement world around when to actually pull the trigger. The common argument goes like this: your late fifties mark the peak earning decade of your career, so retiring early is basically sabotaging your future self. It’s a valid point, and the numbers usually back it up.
But here’s what I think: while the maths matters—and for some people makes early retirement impossible or genuinely foolish—for others,

I’ve always been interested in retirement account alternative withdrawal strategies. Different strategies provide different outcomes. Some support higher initial spending rates, others leave larger amounts for a legacy. There is a middle ground with higher initial rate, and modest remaining amount.
RMD (Required Minimum Distribution) is an often discussed method of withdrawals from retirement accounts. There are others and Morningstar is publishing a series on nine different approaches. These range from simple to complex. “The best retirement withdrawal method depends on what’s most important to you.” The articles look at differing approaches with can support different withdrawal rates.

I recently received an e-mail survey from the Senior Citizens League, a senior advocacy group. Out of curiosity I completed the survey so I could see all the questions. They are all leading questions all focused on getting more for seniors. 
What is not contained in the e-mail is reference to the financial status of Social Security and Medicare, the need to lower costs or increase FICA taxes or both.  As I read it, it is all about me,

Root canal, kaput refrigerator, major car repairs, expensive prescription, 🤑shopping cart dents your car😎
What do the above have in common? They can legitimately be called a financial emergency, and they can happen to retirees as well as anyone else. 
New research from the Center for Retirement Research (How Much Are Emergency Expenses for Retirees and Are They Prepared?) shows that the typical retired household spends 10 percent of income on unexpected expenses in a normal year.

If you read headlines saying Social Security isn’t going bankrupt or insolvent, they are right, but that doesn’t mean there is nothing to be concerned about.
Social Security is headed toward depleting the retirement benefit trust, but as long has there is incoming tax revenue, reduced benefits will be paid.
However, many retirees with feel the impact of an immediate 19-20% reduction in benefits. That will put some into poverty.
According to the latest projections from the Social Security Trustees Report,