Retirement investors are turning their attention overseas and putting more money into international stocks and emerging markets, according to Alight Solutions’ 401(k) Index. While trading levels in retirement accounts were muted, with no above-normal trading days in January, international equity funds soaked in 45% of equity inflows, while emerging markets attracted 33%, surpassing US equity categories. People pulled the most money — 59% — from large US equity funds, followed by stable value funds and com ...

Do you have enough saved for retirement? Many retirees in the U.S. feel they don’t, especially in light of inflation, tariffs and other economic changes. A survey from Clever Real Estate revealed that 55% of retirees are feeling more pessimistic about the economy a year into the Trump administration. One-third said they’ve already spent too much of their retirement savings. Considering the pessimism among many retirees, what can they do right now? Retirement by the Numbers Retirees polled said they fee ...

Core Insights - Many Americans are concerned about whether their investment portfolios will provide sufficient income for retirement, with over 80% of those in their 60s invested in retirement plans, but only about 35% holding brokerage accounts [1] Investment Portfolio Data - For households aged 55-64, the median balance of directly held stocks is approximately $30,000, while pooled investment funds outside retirement accounts have a median of about $300,000. For those aged 65-74, these medians are about $65,000 and $250,000 respectively, indicating a typical taxable portfolio in the low- to mid-six figures [1] - In the second quarter of 2025, self-directed brokerage accounts within workplace retirement plans averaged around $362,000 [2] - Baby Boomers (ages 61 to 79 in 2025) have the largest average balances at about $599,000, while Gen X investors average about $379,000, reflecting a more engaged investor demographic [3] Retirement Account Balances - Typical defined-contribution retirement account balances for age groups are as follows: for ages 55-64, the average is $271,320, and for ages 65+, it is $299,442 [4] - Average IRA balances for Baby Boomers are reported at $257,000 in 2025, with many individuals holding both a 401(k) and an IRA [6] Average vs. Median Balances - The average balances are significantly higher than the median due to a small number of large accounts skewing the average upward, making the median a more representative figure for most Americans [5] - For individuals in their 60s, retirement accounts typically hold more than $300,000 in stocks on average, but the median balance is closer to about $100,000 [7]

Core Insights - Social Security benefits are expected to replace about 40% of an average salary in retirement, which may not be sufficient for maintaining a desired lifestyle [1][2] Investment Opportunities - The JPMorgan Equity Premium Income ETF (JEPI) invests in large-cap U.S. stocks and generates income by selling covered call options, providing monthly distributions to investors [3][4] - The JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) employs a similar strategy to JEPI but focuses on stocks from the Nasdaq-100 index, which may offer higher yields but comes with increased risk [5][6] - The iShares Preferred and Income Securities ETF (PFF) invests in preferred stocks, offering higher dividends and generally lower volatility compared to pure stock funds, making it suitable for risk-averse retirees [7][8]

Core Insights - The article emphasizes the importance of dividend income for retirees relying on Social Security, highlighting how it can supplement their income and cover basic expenses [1][3] Group 1: Investment Strategies - Investors are seeking low-risk investments that provide consistent returns, particularly for retirees on fixed incomes who cannot pursue high-risk yields [3] - The Vanguard High Dividend Yield Index ETF (NYSE:VYM) offers a 2.39% dividend yield with a $3.50 annual dividend, providing a diversified income stream and reducing dependence on individual companies [4] - The Amplify CWP Enhanced Dividend Income ETF (NYSE:DIVO) employs a covered call strategy to achieve a higher income, boasting a 6.36% dividend yield and a $2.87 annual dividend [6][7] Group 2: Performance Metrics - The Vanguard High Dividend Yield Index ETF has a payout ratio of 45.30%, indicating strong dividend coverage and potential for growth despite a modest growth rate of 0.18% [4][7] - The Amplify CWP Enhanced Dividend Income ETF's payout ratio of 154.30% reflects income generated from options premiums rather than traditional dividends [7] - The Vanguard Total Bond Market ETF provides a 3.87% yield, offering stability during equity market downturns [7] Group 3: Financial Planning for Retirees - Retirees can expect predictable quarterly payments from the Vanguard High Dividend Yield Index ETF, allowing for better financial planning [5] - An investment of $50,000 in the Vanguard ETF would yield approximately $1,195 annually, equating to an additional $100 monthly to supplement Social Security income [5]

Core Insights - Private credit has emerged as a significant investment class, growing into a $3 trillion industry that is increasingly integrated with the economy, providing funding to small and midsize businesses [3][4] - The industry is preparing for a retail investor influx, with projections indicating that retail investment in private credit could rise from $80 billion to $2.4 trillion by the start of the next decade [4] - There are concerns regarding the transparency and risk associated with private credit, as the terms and conditions of loans are often opaque, leading to potential issues for retail investors [14][19] Industry Overview - Private credit involves pooling funds from various investors to lend to businesses, often providing more flexible and quicker financing options compared to traditional bank loans [5][6] - The modern private credit industry has expanded significantly since the 2008 financial crisis, with estimates indicating a tenfold growth from 2008 to 2023 [7] - The competition for investor capital in private credit is at an all-time high, prompting firms to seek access to retail investors' wealth [8] Investment Dynamics - Private credit loans typically offer higher returns than public bonds, with interest rates charged to borrowers being 1.5% to 3% higher [6] - The industry claims that access to private credit can enhance financial outcomes for investors, as seen in countries that allow private assets in retirement accounts [10] - However, there are concerns that the industry's push to include retail investors may not be entirely altruistic, as traditional capital sources are becoming overallocated [10][11] Regulatory Environment - The legal framework allows private assets to be part of retirement funds, but the risk of litigation poses a significant barrier to entry for private credit funds [11] - Recent regulatory changes and executive orders aim to facilitate the inclusion of private credit in retirement accounts, potentially leading to significant shifts in the investment landscape [11][12] Risks and Concerns - The opacity of private credit deals raises concerns about the financial stability of borrowers and the potential for defaults, especially in an economic downturn [22][29] - Critics argue that the lack of transparency and rigorous oversight could lead to retail investors being exposed to high-risk assets without adequate protection [19][28] - The potential for a wave of defaults could lead to stricter lending conditions and higher costs for businesses seeking credit [29] Market Outlook - Despite the risks, private credit continues to attract significant investment, with even skeptical firms like JPMorgan allocating substantial funds to the sector [30] - The future of private credit may hinge on achieving a balance between providing consistent returns for retail investors and managing the inherent risks associated with the asset class [30]

Core Insights - Annuities and target date funds are increasingly popular among retirees and those saving for retirement, with their suitability depending on individual financial goals and retirement stages [1] Annuities Overview - Annuities are income-oriented financial products purchased from insurance companies, providing a series of payments over time in exchange for an upfront investment [3] - The most common type for retirees is the lifetime annuity, which guarantees fixed monthly payments for life, offering security similar to private pension plans [4] Case Study: John and Susan - John and Susan, a hypothetical couple aged 67, have $1.2 million in a pre-tax IRA and $750,000 in taxable investments, along with $45,000 in annual Social Security benefits [2] - If they invest their entire $1.2 million IRA in an annuity, they could receive approximately $82,220 annually ($6,851 monthly) in pre-tax income from a single premium immediate annuity [5] - Selling their $750,000 portfolio after capital gains taxes would leave them with about $558,000, which could yield an additional $38,280 annually ($3,190 monthly) from another annuity [6] - Overall, their total annuity income could reach around $120,500 per year before taxes if they invest their total of $1.95 million in annuities [7] Considerations for Annuity Income - While annuities provide a steady income stream, they pose inflation risks as many are not indexed for inflation, potentially diminishing purchasing power over time [8]

Core Viewpoint - PIMCO Enhanced Short Maturity Active Exchange-Traded Fund (MINT) offers a 4.6% yield by focusing on short-term bonds maturing in under three years, aiming to provide steady monthly income while protecting capital from interest rate fluctuations [2][6]. Fund Performance and Strategy - Since its launch in 2009, MINT has established a reputation for delivering reliable monthly income, which is essential for retirees [3]. - The fund's five-year annualized return is 3.2%, which barely keeps pace with inflation, indicating limitations in long-term performance [6][8]. - MINT's price stability has been nearly flat since 2021, making returns heavily reliant on distributions that fluctuate with interest rates [8]. Risks and Vulnerabilities - MINT's primary vulnerability lies in its dependence on short-term interest rates; when rates decline, monthly dividends decrease, leading to income uncertainty for retirees [4][6]. - The fund's yield is influenced more by prevailing rates than by underlying corporate earnings, which can create challenges for income stability [4]. Cost Structure - PIMCO's active management incurs a 0.36% expense ratio, which is higher than passive alternatives, impacting net income for investors [5][10]. - In comparison, iShares SGOV offers a lower expense ratio of 0.09% and provides a yield of 3.7% with zero corporate credit risk, making it a more cost-effective option for retirees [9][10]. Alternative Options - Retirees seeking stable income with minimal volatility may consider iShares 0-3 Month Treasury Bond ETF (SGOV) as a viable alternative to MINT, focusing exclusively on ultra-short Treasury bills [9].

Group 1 - The article critiques outdated retirement rules, emphasizing that they may not provide sound financial advice in today's context [1] - The Rule of 100, which suggests subtracting one's age from 100 to determine stock allocation, is deemed outdated due to longer life expectancies and lower bond yields [2][3] - The 60/40 retirement portfolio may be too conservative, as evidenced by Warren Buffett's strategy of allocating 90% to equities and only 10% to bonds, which outperformed the traditional portfolio [4] Group 2 - Inflation is highlighted as a significant threat to retirement savings, more so than market volatility, necessitating investments that outpace inflation [5] - The 4% Rule, which was popularized in the 1990s for retirement withdrawals, has been challenged, with suggestions that a 5% withdrawal rate may be feasible under certain conditions [6] - The advice to pay off all debt before retirement is questioned, particularly regarding mortgages, as strategic use of debt can enhance income generation [7]

Core Insights - A significant number of retirees are emerging as baby boomers transition into retirement, with the trend expected to continue through 2030 [2] - The stock market has been favorable for retirees, with high-yielding assets providing returns that can exceed inflation rates [3] Investment Opportunities - High-yield ETFs such as iShares 20+ Year Treasury Bond BuyWrite Strat ETF (TLTW), VistaShares Target 15 Berkshire Select Income ETF (OMAH), and Strategy Shares Gold-Hedged Bond ETF (GOLY) are recommended for retirees [2][4] - TLTW offers a yield of 14.8% by combining long-term Treasury bonds with a call options strategy, while OMAH yields 12.83% and GOLY yields 7.25% [5][7] - GOLY has seen a 45% increase over the past year, indicating strong performance [7] Market Conditions - The Federal Reserve's interest rate cuts are expected to make bonds more valuable, potentially leading to capital appreciation for TLTW [8] - In the event of a recession, TLTW is anticipated to perform well, similar to its performance during the 2008 financial crisis [8]