It's an unfortunate but true reality that the traditional idea of longevity isn't quite what it is used as the risk associated with running out of money too soon is very real. This reality is what is driving many different kinds of retirement calculations as well as safe-withdrawal-rate conversations, and arguably keeps many financial planners... The New Longevity Risk Most Retirement Plans Still Ignore. ...

Group 1 - Smart financial planning should continue into retirement to maintain a comfortable lifestyle [1] - Responsible retirees make informed financial and investment decisions to manage their portfolios [1] Group 2 - Adjusting investments according to risk capacity is crucial, which involves understanding how much of the portfolio can be lost without financial distress [2] - It is recommended to move funds from stocks and illiquid investments to more accessible options like high-yield accounts, money market funds, or short-term bonds [3] Group 3 - Regularly reviewing asset allocation is essential for minimizing risk and maximizing returns, especially during retirement when steady income is no longer guaranteed [4][5] - In retirement, asset allocation should focus on capital preservation and income generation, with a balanced exposure to stocks for future growth [6] Group 4 - Hiring financial professionals can provide valuable assistance in managing portfolios, taxes, and estate planning [7] - A financial planner can align investment strategies with long-term goals, ensuring tax efficiency and income stability [8]

Canva: Monkey Business Images and Jonathan Ross from Getty Images Quick Read A $4 million nest egg generates $160,000 annually using the 4% withdrawal rule. Healthcare, taxes, and long-term care costs remain major variables that can significantly impact retirement spending. You may enjoy a nice retirement with $4 million saved, but continue to manage your money carefully. A recent study identified one single habit that doubled Americans’ retirement savings and moved retirement from dream, to reali ...

Core Insights - Most Americans plan to retire at age 64, expecting to spend about 22 years in retirement, raising concerns about the sustainability of their savings [1] Group 1: Retirement Planning Strategies - A significant portion of U.S. investors (64%) believe the first step to ensure retirement security is to save more and live frugally [3] - Saving more can involve increasing contributions to retirement plans and dedicating half of any salary increase to savings [4] - Living frugally may require individuals to practice their retirement lifestyle now by reducing discretionary spending [5] Group 2: Importance of Financial Planning - Having a long-term financial plan is crucial to avoid outliving savings, with emphasis on starting this planning early [6] - Investors can approach planning by either outlining savings steps to reach a target amount or determining needed savings and working backward [7]

Core Insights - Roth conversions involve rolling over retirement funds from pretax accounts to after-tax Roth IRAs, allowing tax-free withdrawals in retirement after paying capital gains taxes during the rollover [1] Group 1: Timing Considerations - Roth conversions may not be beneficial if an individual expects their income to drop in retirement, as paying taxes at a high rate now could undermine the strategy [3] - The optimal timing for Roth conversions is during low-income years, particularly after retirement but before required minimum distributions or Social Security benefits begin [3][4] - The period between retirement and the start of required minimum withdrawals or Social Security is ideal for conversions, as it allows for better control over taxable income and minimizes tax liabilities [7] Group 2: Tax Implications - Tax laws are subject to change, and while Roth IRAs can hedge against future tax increases, conversions are taxed under current laws, which may strain cash flow or affect other financial plans [5] - Performing a Roth conversion while in a peak tax bracket can lead to higher immediate tax payments than necessary, making it advisable to wait until after retirement when income typically decreases [6][7]

Core Insights - The article addresses the common dilemma of whether to prioritize paying off debt or saving for retirement, particularly in the context of rising household debt and insufficient retirement savings in the U.S. [3] Group 1: Debt and Retirement Savings - Total household debt in the U.S. reached $18.39 trillion in Q2 2025, highlighting the financial pressures many Americans face [3] - A general guideline suggests contributing 10%-15% of income to retirement funds while managing debt, which is deemed necessary for retiring on time, typically by age 65 [4] - Financial situations vary significantly, and the 10%-15% guideline serves as a starting point rather than a one-size-fits-all solution [4] Group 2: Budgeting and Debt Management - The first step in addressing financial concerns is to analyze the budget to identify cash flow for debt repayment [5] - Debt is categorized into "bad debt" and "traditional debt," with the latter including mortgages and student loans, which generally have lower interest rates [5][6] - The financial planner advises against labeling any debt as "good," as all debt can hinder financial progress if not managed properly [5]

Core Insights - Retirement planning is essential not only for ensuring sufficient funds for leisure activities but also for mitigating financial risks post-retirement [1][2] Group 1: Financial Risks in Retirement - Longevity risk is a significant concern, as retirees may outlive their savings due to various factors [4] - Sequence-of-returns risk can severely impact retirement savings if a market downturn occurs early in retirement [5] - Inflation, rising healthcare costs, and the IRMAA surcharge can further strain financial resources, with human behavior also posing risks through panic selling or chasing trends [5] Group 2: Strategies for Retirement Planning - A recommended approach is to engineer cash flow first and optimize returns second, ensuring a stable income that retirees cannot outlive [6] - Maintaining 12 to 24 months of essential expenses in cash can prevent forced selling during market dips [6] - Focusing on steady income allows retirees to balance safety and growth, enabling them to pursue higher-risk investments when their cash flow is secure [6][7]

Core Insights - The 4% rule, originally proposed by financial planner William Bengen, has been updated to a 4.7% rule to better reflect modern financial conditions [1][4] - Bengen's original rule was designed to help retirees withdraw a sustainable amount from their savings over a 30-year period [3][4] Group 1: Reasons for Update - The update is attributed to advancements in research and a changing financial landscape since the 1990s [2][6] - A significant concern among Americans is the fear of outliving their retirement savings, with 64% expressing more worry about running out of funds than death [5] Group 2: Changes in Investment Strategy - The original 4% rule was based on a portfolio of 50% large-cap stocks and 50% U.S. bonds, while modern portfolios often reflect a 60/40 or 70/30 split [7] - Retirees today may have a more diversified asset allocation, including cash, commodities, and real estate, compared to the historical focus on stocks and bonds [7]

Core Insights - Retirement for many Americans is about achieving a comfortable middle-class lifestyle, with a target passive income of $12,000 per month or $144,000 per year to cover expenses and enjoy luxuries [1] - Achieving this level of retirement income requires not only a substantial nest egg but also resilience against inflation, market fluctuations, and longevity risk [2] Financial Requirements - The "magic number" for retirement savings in 2025 is projected to be $1.26 million, which translates to an annual retirement income of approximately $50,400 or $4,200 per month, closely aligning with the median retirement income of $54,710 for Americans over 65 [3] - To achieve a retirement income of $12,000 per month, an individual would need around $3.6 million in retirement savings, which is nearly three times the average retiree's income [4] Inflation and Longevity Risk - Even a modest inflation rate of 2% can significantly erode purchasing power over time, necessitating an increase in retirement income to about $214,000 per year by age 82 to maintain the same standard of living as $144,000 in the first year of retirement [5] - Investment strategies play a crucial role in managing inflation and longevity risk; relying on low-risk assets like bonds may require savings well over $3.6 million to keep pace with inflation [6]

Core Points - The article discusses the importance of creating a revocable living trust to avoid probate, protect privacy, and minimize estate taxes when a person passes away [1][4] - It highlights the complexities and potential legal battles associated with the probate process, using the example of the late entertainer Prince [2][3] - The article emphasizes the need for individuals to structure their living trusts carefully and provides considerations for what to include or exclude [4][11][12] Group 1: Trusts and Wills - A revocable living trust allows individuals to maintain control over their assets and designate beneficiaries, helping to avoid the probate process [1][7] - The process of creating a will is recommended to prevent confusion among family members regarding one's wishes after death [2][3] - The article presents a hypothetical case of an individual, Pete Moneywise, who is preparing his financial affairs, reflecting common concerns among retirement-age individuals [5][4] Group 2: Costs and Services - Ethos Will & Trust offers online services to create wills and living trusts quickly, with documents vetted by estate-planning attorneys [6] - The costs for creating a will start at $149 and a living trust at $349, with a full refund available within 30 days if unsatisfied [7] - Range provides financial planning services for high-earning households, including asset management and tax planning [8][10] Group 3: Items to Exclude from Trusts - Certain assets, such as vehicles, annuities, life insurance, international assets, and checking accounts, are recommended to be excluded from a revocable living trust to avoid complications [11][12][18][19] - The article advises that naming beneficiaries directly on life insurance policies is preferable to placing them in a trust [14][15]