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… Read More
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… Read More
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… Read More
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… Read More
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… Read More
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… Read More
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… Read More
Retiring at Market Highs
As we approach new all-time market highs, one fear I routinely hear is a concern over retiring at market highs. It makes sense given that sequence of returns risk is so prevalent early in retirement. If you experience a market meltdown during your first few years in retirement, that’s obviously not a good thing and most certainly not enjoyable. It’s the primary reason I advocate for pairing dividend growth investing… Read More
The Only Benchmark That Matters
Each day, investors everywhere compare their portfolio’s return to a benchmark. Many times, at least for investors in the U.S., the benchmark of choice is the S&P 500. I find it endlessly fascinating because a benchmark is simply the average of all investor returns before costs. This is not opinion, but fact. John Bogle, the late founder of Vanguard, said it this way in his book “Common Sense on Mutual… Read More
Increasing Your Odds of Retirement Success
Recently, I was asked a great question: “What is the #1 thing I can do to increase my odds of retirement success?” Most people are inclined to focus on the portfolio since it gets all the love and attention in retirement planning – how can you optimize your portfolio, pay less in taxes or squeeze out more return?? But when it comes to retirement planning, often the easiest way to… Read More
