One of the biggest changes of the past year has been the record number of Americans who are quitting their jobs. It’s so pronounced that it has a name. It’s called “The Great Resignation.”
What The Great Resignation means for retirement planning is just one of the items on Christine Benz’ financial to-do list this year. Another major area of focus is adjusting to much higher inflation. Consumer Prices increased 7% in December versus a year ago, the fastest increase since 1982 and the third month in a row that inflation exceeded 6%.
This elevated rate of inflation presents a big planning challenge. Benz, who is Morningstar’s Director of Personal Finance, is joining us for the fourth year in a row to help us get in financial shape for a new year and will tackle these important changes among others.
00:00 Hello
00:48 Introduction
02:40 interview with Christine Benz
23:23 One Investment
24:52 Action Point
WEALTHTRACK #1829 broadcast on January 14, 2022
#investing #GreatRetirement #retireearly #earlyretirement #greatresignation
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REVEALED: How To Invest During Inflation
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You’re Retiring. Now What? retirement planning: A Reassessment [2022]
Retirement is often viewed as a destination, a momentous milestone that one should work towards throughout their career. However, it is important to recognize that retirement is not an endpoint, but rather the beginning of a new chapter in life. As you approach this significant phase, it becomes crucial to reassess your retirement planning and ensure that you have a well-thought-out roadmap for the years ahead.
In 2022, retirement planning has become more complex due to various economic, societal, and health factors. Many individuals have found their retirement plans upended by the pandemic, forcing them to reevaluate their financial goals and long-term aspirations. As a result, it is essential to reassess your retirement plans and take proactive steps to adapt to the changing landscape.
First and foremost, it is crucial to reassess your financial situation. Take stock of your savings, investments, and any pension plans you may have. Consider consulting with a financial advisor who can help you evaluate your current assets and liabilities and calculate how much income you will need during retirement. This assessment will give you a clearer picture of your financial standing and enable you to make informed decisions about your retirement budget and lifestyle.
Furthermore, it is important to consider how your retirement plans align with your personal goals and aspirations. Retirement is an opportune time to pursue interests and hobbies that you may have put on hold during your working years. Think about the activities that bring you joy and fulfillment and how you can incorporate them into your retirement routine. Whether it’s traveling, volunteering, starting a new business venture, or spending more time with loved ones, having a clear vision of your post-retirement life will help guide your decision-making process.
In addition to personal considerations, it is crucial to account for potential healthcare costs in your retirement planning. Healthcare expenses tend to increase with age, and it is essential to have a comprehensive healthcare plan in place to ensure that you are adequately covered. Review your health insurance policies and consider additional coverage options such as long-term care insurance to protect against unexpected medical expenses down the line.
As you near retirement, it is also important to reassess your investment strategy. Depending upon your risk tolerance and financial goals, you may want to adjust your investment portfolio to reflect your changing circumstances. Consider diversifying your investments, exploring low-risk options, and reassessing your asset allocation to ensure that your investment strategy remains aligned with your retirement objectives.
Lastly, don’t forget to consider your legacy and estate planning. Think about how you want to leave a lasting impact and ensure that your assets are distributed according to your wishes. Consult with an estate planning attorney to help you draft a will, establish a trust, and make necessary arrangements for the transfer of your assets.
retirement planning is an ongoing process, requiring periodic reassessment and adjustments along the way. The year 2022 has presented unique challenges and opportunities for retirees, urging them to take a fresh look at their retirement plans. By evaluating your financial situation, aligning your plans with personal goals, accounting for healthcare costs, reviewing your investment strategy, and considering your legacy, you can ensure a smoother transition into retirement and enjoy the fulfillment and tranquility that this new chapter of life offers.
Most people that retire in their 60’s will not live 30 years in retirement. I think they would still be safe at 4 or even 5%.
I like to pop in here occasionally and hear all folks with $5M….$10M in assets struggling on when to retire lolol. Oh Me Oh My decisions decisions.
She said large assets, giggity.
I’m not sure how we as retirees are supposed to adjust down what we need to live on when everything is going up at the same time. It’s not realistic. In other words if you’re getting by on 4% of your portfolio, now you’re supposed to use 1% less when everything has gone up 10% or higher. I used much of Ms Benz’s money advice for our retirement planning, but now two years into retirement its not feasible for us to cut back at this time.
I have government forced annuity called social security tax. The problem is the administrator is short-sighted and keep changing rules. I should have had retired at age 59 -1/2.
This was from the letter SSN sent me decades ago when I started working.
What do you say?
She just say take less out as a strategy. No magic. Tighten your belt.
When you broadcast the show on TV? Can you announce the recorded day? I seen this show on TV last Saturday, she says the market is good now.
what about the 95 % strategy where you can either take the inflation adjusted safe rate (3-5 %) or 95 % of last years draw in a down market? Has anyone looked at the benefits and drawback of that strategy?
I would say there is also a mental aspect to this that most don't consider. Here was my take and I tried it a few times as I posted to my own subscribers. I was a physical therapy contractor and at times still am. But three times I went overseas to exit out of the workforce. Each time was four months. The first few weeks were great. Then I started sleeping later and later. Finally it got to the point where I was going to bed at 3:00 am and getting up at noon. You can only train in the gym so long and see the castles and temples so many times. Even living in Gdansk, Poland on the Baltic beach—-you take that walk down the beach—again. And I had no purpose. Even though I was in the beginnings of making my own videos and setting up the channel I still had 7-8 hours of down time a day. And I don't go to clubs and bars so that left a whole lot of idleness. End point–a human feels the best when there is a purpose. I used to work with the elderly and can tell you that they have a lot of depression once their role in life is gone besides that fishing trip—again. I think I'll also have a part time gig whether it is becoming the almighty influencer or being a part time physical therapist. My mental soundness is far better with a role to play than when I was on permanent vacation. Hope that helps someone out there–Charles
Furthermore..It is true that Bill Bengen's 4% rule does insure a very low likelihood of not completely depleting a balanced account, AS LONG AS; you don't exceed 4% withdrawals. But..RMD's ramp that 4% up, RATHER QUICKLY; beyond 72. She didn't point that out.
How any financial-professional can recommend that bond funds (ANY type of bond funds) represent stability and safety, particularly for a retiree who is no longer contributing "new money" to their accounts, is utterly BEYOND ME. Especially, after Powell's hawkish statements, this week. Individual bonds (or TIPS) bought at auction, and held until maturity..now THAT'S safety.
Save and invest for decades, so you can have a comfortable retirement, but still have to live like a hobo..3%. May as well just work till you die on the job.
The big story just before the pandemic was how Baby Boomers were shamelessly holding on to their jobs and blocking opportunities for Gen X and Gen Y. Well, a small percentage of Boomers have now dropped out and the big news is how there is a huge worker shortage? Are Boomers essential to the work force or were they standing in the way?
BTW, thanks for the 2% withdraw rate suggestion for younger retirees in their forties. All the FIRE folks have been publishing that it's safe for early retirees to withdraw 4%–and these "retirees" are in their twenties and thirties! A lot of them will be flattened should we have a 2008 style downturn and we will definitely have one in the coming years.
Adequate/good health is really wealth. This becomes apparent, sometimes painfully, as you age. Beware of dissatisfaction as you age with acquaintances and possessions. Desire is the siren of destruction.
Overall they have very valid points except for the low withdrawal rate. Many financial planners push to save more & to withdraw less. There could be a conflict of interest. Many are paid a % of assets under management. The more money you have invested, the more money they make. The key is the net cashflow from your investments vs your expenses and inflation rate
WealthTrack should do an episode on stock dividends for retirees.
They didn’t even mention Bitcoin. We’re early AF
<Bitcoin recent price action shows evidence that a bottom may be forming, <denying bears any further movement lower. Ethereum price has developed a ridiculously chart, warning of an imminent bullish reversal. XRP price hammered with two major short setups, but sellers failed to push XRP lower. At this point Diamond hands are showing cracks as people start to panic; if you are losing in the current dip or you look forward to start, the best way to go is trading with the guidance of an expert. Kathleen Lynn has been one step ahead of other analysis, with her strategy I was able to accumulate $5k in 3week.
These Morningstar contributors give some of the most sane, level-headed advice. I really appreciate it. Also, Jason Zweig's material is worth reading too.
excellent as usual. Thank you consuelo! Wishing you and your team an excellent year!
Great questions. Nothing is locked down. Inflation at 2%, investment return at 2%, withdrawal at 3%? Flexibility is key because none of the numbers are set in stone. Everybody is different and the future unpredictible.
Consuelo is the consummate interviewer and pulls some great guests. Thank you.
The study that she has been sent out to pimp and defend is a piece of junk. It assumes that small caps will outperform large caps by about sixty percent on average every year for the next forty years. Its really embarrassing for her and for Morningstar. One of the lousiest things they have ever done. And then they assume that, knowing that, the investor will buy mostly large caps.
Nobody actually reads the details, including Consuela. So no real questions about that.
The real purpose of the study is to prop up the financial services and annuities industry, who are Morningstar's clients.
This whole thing is embarrassing and will be a fiasco in a few years that may end Christine's credibility and career. She will blame Rekenthaler and he will say the company made him do it.
TIPs are a horrible inflation hedge and proved it this year. More bad advice. VTIP is just a dumb cash drag.
I just don’t understand how TIPS do a portfolio any good. I just don’t think they appreciate enough over any other bond fund to be able to keep up with inflation.
Would love to hire her for my financial guidance!