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Category: Retirement Income Planning

2020 Required Minimum Distributions

2020 Required Minimum Distributions

For those who aren’t aware, the CARES Act had already waived 2020 Required Minimum Distributions (RMD). But there was a slight oversight with regard to people who had already taken their RMDs as many retirees do in January each year. Well, last week, the IRS announced that for anyone who already took their RMDs for 2020 can roll those assets back into their retirement account as long as it is done by 31 August 2020 as the 60-day rollover period…

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Preparing For “What-Ifs”

Preparing For “What-Ifs”

We are now a little more than two months out from the bear market lows. As the swift recovery ensued, I started hearing stories of investors who sold out of their portfolios around DJIA 19,000 “because the market was going lower.” They were right for the blink of an eye. With the market now back above 26,000, when are those investors supposed to get back in? I have to pose the question because getting back in is always the hardest…

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Dividend Bear Markets

Dividend Bear Markets

An astute reader of last week’s blog post, Equities in Retirement: A 30-Year Case Study, asked a great question: “How much of a maximum decline in annual dividend income (based on prior historical experience) should one be prepared for?” In other words, during dividend bear markets, what level of income decline should we expect? The obvious answer is that I do not know because even the worst-case historical event is only the benchmark until something even worse comes along. So,…

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Equities in Retirement: A 30-Year Case Study

Equities in Retirement: A 30-Year Case Study

Whenever I ask soon-to-be retirees what the ultimate goal of investing in retirement is, the most common answer I hear is: I don’t want to run out of money. Pretty straightforward, right? Here’s the problem. When I ask many of those same individuals what the primary objective of their retirement portfolio is, this is the typical response: Preservation of principal. Whether retirees realize this or not, those two goals run almost exactly counter to one another. If your goal is…

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4 Stages of a Bear Market

4 Stages of a Bear Market

All bull markets must come to an end. Many of the gains of the last few years were abruptly wiped out in just a month’s time. The argument could be made that bear markets are healthy and are sometimes referred to as a feature, not a bug. I’ve come to believe that there are four stages of a bear market, each with their own emotional issues and include at least two decision points that could arise on our journey through…

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10 Charts About Retirement Every Retiree Should See (2020)

10 Charts About Retirement Every Retiree Should See (2020)

As a Retirement Planner, each year I eagerly await the release of J.P. Morgan’s Guide to Retirement. It is essentially a booklet of retirement charts filled with great information impacting retirees. Making it even better, it often highlights things that are regularly overlooked by just about anyone (including professionals) planning for retirement today. With that in mind, I have selected 10 charts that I think everyone transitioning into retirement should see with a little commentary on each. Every chart comes…

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Rethinking Investment Risk in Retirement

Rethinking Investment Risk in Retirement

Investors love to talk about risk. What’s the downside risk? How can you hedge your risk? How can I evaluate the risks in my portfolio? Should we address investment risk in retirement the same as during the accumulation phase? What about my personal risk tolerance? These days, risk tolerance questionnaires are all the rage and there are companies springing up out of nowhere trying to cash in on this CYA idea. Many of them are even willing to “brand” you…

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Spending in Retirement – An Observation

Spending in Retirement – An Observation

Most of the people I am surrounded by are first-generation wealthy and I bet very few would even describe themselves as wealthy. One of the reasons they wouldn’t describe themselves as wealthy is because, in most cases, they came from meager backgrounds so the idea of being considered wealthy in any sense of the word is almost a foreign concept. Recently, I think I stumbled across an observation I have never noticed before with regard to spending in retirement. That…

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Retirement Income in Bull Markets, Bear Markets & Flat Markets

Retirement Income in Bull Markets, Bear Markets & Flat Markets

I live in a bedroom community of Pittsburgh and there are two primary routes to get to the grocery store. Back roads and the highway. During perfect conditions, the backroads take about twelve minutes and the highway takes about nine or ten minutes. I always take the backroads and my wife would choose the highway most of the time. My logic is that in virtually all conditions, the backroads take 12 minutes. The highway, while faster during optimal times, could…

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When It’s Smart to Pay Capital Gains Taxes

When It’s Smart to Pay Capital Gains Taxes

Imagine for a moment that you are the coach of a Major League Baseball team and you’ve successfully coached your team to the World Series. You’re about to start the 9th inning of Game 7 and your team is up 3-1. You are just three outs away from being crowned World Champions. A life-changing opportunity for players and coaches alike. But before the 9th inning begins, you visit the opposing team’s dugout and ask their coach if they’d like to…

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