Getting and Spending, Retirement Edition

Also: 6 Best Short-Term Investments
͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ 
December 13, 2022
Retire with Money
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Saving for retirement is a simple concept, but how do you deal with that accumulation of assets on the other end, when you’re in retirement and need to shift from saving mode into spending mode?

For decades, experts have been recommending the 4% rule — the formula that says over 30 years of retirement, you’re unlikely to run out of money if you start your retirement by withdrawing 4% of your assets the first year. After that, you adjust for inflation. Sounds sensible, stable and safe.

No longer. Bill Bengen, the financial advisor and architect of the 4% rule, now says that withdrawal rate should be more like 4.7%. Bengen, who published his paper in 1994, has increased the withdrawal rate based on his own research and on “adding a number of asset classes which have increased returns.”

Adding U.S. microcaps in his last round of research increased volatility, he explains, but it also led to higher returns, which significantly increased the withdrawal rate.

Speaking of increased returns, if you’ve been dreading looking at your portfolio, you can relax for now. A slower pace of inflation caused stocks to rise on Tuesday. For more, read our reporter Sarah Hansen’s story on what to expect in 2023.

— Jill Cornfield, deputy editor

P.S. If you got this newsletter from a friend, sign up here for email delivery to make sure you don't miss the next issue.

 

Timely Retirement News, Insights and Advice

 

Most people can start collecting Social Security checks when they turn 62. But there are big financial rewards for those who wait: Americans who hold off until they’re 70 to claim Social Security benefits can expect to increase their lifetime payout by over $180,000, according to a new study.

 

Saving enough for retirement is no easy feat, and a new survey indicates inflation is making it much more difficult. More than half of Americans (54%) say they have cut back on retirement contributions or stopped saving entirely, according to a survey from insurance company Allianz Life.

 

Finding a place to park money for the short term can put investors in a tough situation. While it usually doesn’t make sense to invest money in the stock market if you’ll need it within the next year or so, it can also cost you to keep your savings in cash in a traditional bank account. Short-term investments give you easy access to your hard-earned money but also ensure that money is not sitting idly.

 

To celebrate Money’s 50th anniversary, we’re highlighting 50 influential figures shaping Americans’ finances — today and beyond. Some you might know, some you might be learning about for the first time.

 

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Retirement 1, 2, 3

 

  • If you’re not collecting Social Security yet, do you still get the 8.7% Social Security cost of living increase? Short answer: yes.
  • Move south for retirement? Most baby boomers and Gen Xers plan to stay where they are, according to a Bank of America study.
  • Open enrollment just ended, but here's some info that might make you rethink choosing a Medicare Advantage plan next year.
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Older messages

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plus Janet Yellen + all-you-can-eat popcorn ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌

Issue #171: All I want for Christmas is to not get scammed

Wednesday, November 30, 2022

plus DJ Khaled's new toilets + cats with jobs ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌

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Issue #170: Here's what I'm thankful for this year

Wednesday, November 23, 2022

plus dog side-eye + beautiful Jell-O ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌

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