Retirement

Retirement

The Core Tension: Income Stability vs. Cognitive Burden The real issue here isn't performance. It's decision fatigue. JNJ, VZ, PG, and KO represent classic dividend aristocrat territory-steady income, low volatility, minimal drama. JNJ's beta of 0.33 means it moves one-third as much as the broader market. VZ yields 7% but has grown earnings just 0.5% year-over-year. These stocks don't demand constant attention.

What gets glossed over in most of these conversations is taxes, as everyone focuses on the accumulation phase by maxing out your 401(k), funneling money into accounts like the Vanguard Total Stock Market Index Fund, and watching your net worth compound. However, when you retire early and need your portfolio to generate income, the tax bill can be significantly higher than you planned for, particularly if most of your money is in tax-deferred accounts or you've accumulated large unrealized gains in taxable accounts.

Musk envisions a future of unprecedented productivity, where advances in artificial intelligence, energy and robotics produce economic abundance and even a so-called universal high income that might make long-term savings unnecessary, Business Insider reported. The good future is anyone can have whatever stuff they want, Musk said. That would mean better medical care than anyone has today, available for everyone within five years.

Researchers found that unexpected costs are the norm, not the exception. In any given year, 83% of retired households experience at least one unexpected expense. These fall into three broad categories: Rainy-day costs, such as major home or vehicle repairs Family-related expenses, including helping relatives or covering emergency travel Health-related expenses beyond routine care Health and home costs are especially common, with each affecting well over half of retirees in a typical year.

Many baby boomers were led to believe that their Social Security benefits would replace their entire paychecks. In reality, those benefits only provide a limited amount of income, and they do a poor job of keeping up with inflation. Boomers who earned an average paycheck during their working years can expect Social Security to replace about 40% of it. That's not enough income to live on in retirement - or at least not to live comfortably.

Saving for retirement in a traditional IRA or 401(k) can make more sense than socking money away in a Roth account. That's because traditional retirement accounts give you a tax break on your contributions. If you're a higher earner in a higher tax bracket, that tax break may be very valuable to you. Plus, you might earn too much money to contribute to a Roth IRA directly, making a traditional IRA a better bet.

Then, about three or four years ago, home prices doubled, and I was able to sell several rental homes that I'd constructed. Off two homes alone, I made around $700,000 in profit. It was an awful lot of money in one year, and then my income became less important. I would've kept building anyway, even if I needed the income, but now I don't do it for the money; I'm able to do it as a passion.

The SECURE Act of 2019 and the SECURE Act 2.0 of 2022 all but fundamentally changed retirement account rules in ways that continue to catch both retirees and their beneficiaries by surprise. The changes weren't minor either, as they altered the r equired minimum distribution timeline, eliminating the stretch IRA strategies for most beneficiaries, and created new compliance deadlines that now carry some pretty severe penalties. It goes without saying that understanding these rules is critical, as the penalties from the IRS can be steep if you are not compliant.

"Ethical investing" often serves more as a form of virtue signaling than as a mechanism for actual change. It feels good. It sounds good. It gives you the sense that you're doing something. But feeling aligned and making an impact are not the same thing. Socially Responsible Investing has gotten more sophisticated over the years. Known by many names like ESG, Impact Investing, Mission-driven investing, what we're talking about is deliberately excluding companies from your investment strategy

Northwestern Mutual's 2024 Planning and Progress study revealed the simple step that Americans have taken to double their retirement savings. According to the research, those who work with a financial advisor have around twice the retirement investment account balances compared to people who try to manage their retirement investing all on their own with no professional advice. The research showed that those who have a financial advisor guiding them have around $132,000 in retirement savings, compared with $62,000 among those with no advisor.

If you want a $7.7k monthly income on a $500k portfolio, some may call you crazy, but it is still possible. ETFs like the iShares 20+ Year Treasury Bond Buywrite Strategy ETF (BATS:TLTW ) , FT Vest Gold Strategy Target Income ETF (BATS:IGLD ) , and the Ubs Ag Etracs Silver Shares Covered Call ETN Exp 21 Apr 2033 (NASDAQ:SLVO ) give you very high yields and a respectable safety profile that can boost your yields massively if you put them in your portfolio.

Your personal experiences with money make up maybe 0.00000001% of what's happened in the world, but maybe 80% of how you think the world works. Put another way, what has happened to me personally with money or investing is going to be the main influence on how I make investment decisions in the future.