Retire With Style

In this live Q&A session, Wade Pfau, Alex Murguia, and Bill Bengen discuss the intricacies of safe withdrawal rates in retirement, focusing on the relevance of the 4% rule, the impact of inflation, and the importance of investment strategies. They explore various topics including the significance of account types, the risks associated with stock picking, and the necessity of adjusting withdrawal rates based on market conditions and personal circumstances. The conversation emphasizes the need for a tailored approach to retirement planning, considering factors like tax efficiency and rebalancing strategies.   Takeaways Inflation is a significant risk in retirement planning. The 4% rule is not a fixed rule and can vary. Longer planning horizons require lower withdrawal rates. Account types affect the net amount available for withdrawal. Stock picking can be risky and is not recommended for most. Market conditions can influence safe withdrawal rates. Adjusting withdrawal rates in response to inflation is crucial. Understanding current vs. synthetic withdrawal rates is important. Annual reviews of withdrawal plans can help manage risks. Tax efficiency should be considered in withdrawal strategies.   Chapters 00:00 Introduction to Safe Withdrawal Rates 05:30 Understanding Account Types and Withdrawals 09:25 Small Caps and Future Performance 15:10 Annual Review of Withdrawal Plans 19:36 Immediate Actions in High Inflation 21:22 Customizing Withdrawal Strategies 22:55 Tax Considerations in Withdrawals 23:44 Withdrawal Strategies from a Multi-Fund Portfolio 26:45 Replacing Micro Caps in Portfolios   Links Get Bill Bengen’s New Book – A Richer Retirement Want to dive deeper into the research behind the 4% rule and how retirement income planning has evolved? Bill Bengen’s new book, A Richer Retirement, is now available—visit bengenfs.com to learn more and get your copy. 🎉 We’re About to Hit 200 Episodes! 🎉 Can you believe it? Retire With Style is closing in on our 200th episode, and we want you to be part of the celebration! Whether you’ve been with Wade and Alex since episode one or just joined the party, this milestone wouldn’t be possible without listeners like you. Help us mark the occasion by sending in a short video or voice note to share your favorite moment, biggest takeaway, or just some kind words for the guys. We’re also running a special giveaway to thank our community — and yes, there will be prizes. 👉 Be a part of Episode 200 by visiting https://retirewithstyle.com/join-episode-200 to join the celebration! Explore the New RetireWithStyle.com! We’ve launched a brand-new home for the podcast! Visit RetireWithStyle.com to catch up on all our latest episodes, explore topics by category, and send us your questions or ideas for future episodes. If there’s something you’ve been wondering about retirement, we want to hear it! The Retirement Planning Guidebook: 2nd Edition has just been updated for 2025! Visit your preferred book retailer or simply click here to order your copy today: https://www.wadepfau.com/books/ This episode is sponsored by Retirement Researcher https://retirementresearcher.com/. Download their free eBook, 8 Tips to Becoming A Retirement Income Investor at retirementresearcher.com/8tips

William Bengen, a retired financial planner and aerospace engineer, revolutionized retirement planning with the 4% rule. He explains how inflation and market valuations critically affect sustainable withdrawal rates. Bengen emphasizes the need for a comprehensive withdrawal plan and recommends adjusting strategies to around 5.5% for today's economic climate. Listeners learn about the importance of asset allocation and regular monitoring of retirement plans. He also discusses strategies to navigate market volatility and the necessity of continuous adjustments for a secure financial future.

In this conversation, Alex Murguia and Wade Pfau explore strategies for retirement planning, including hedging against inflation, using break-even analysis in Social Security decisions, and evaluating annuities for retirement income. They also cover the implications of Roth conversions and the reverse equity glide path strategy for managing investments. The discussion highlights the importance of understanding how different financial tools contribute to a comprehensive retirement plan.   Takeaways Hedging against inflation can be approached through TIPS or equities, each with distinct risk profiles. TIPS provide a contractually protected hedge against inflation, while equities may offer higher long-term growth. Break-even analysis for social security is often misleading and can lead to poor decision-making. Delaying social security benefits can provide inflation-adjusted lifetime income, which is crucial for retirees. Annuities can be a useful tool for ensuring reliable income, but their lack of inflation protection must be considered. Paying taxes for Roth conversions from an IRA is acceptable if no other funds are available. The present value of social security benefits should be considered as part of a retiree's bond-like income. The reverse equity glide path strategy can help manage sequence risk in retirement by gradually increasing equity exposure. Understanding the implications of social security estimates is essential for accurate retirement planning. Investment strategies should align with individual risk tolerance and retirement income needs.     Chapters 00:00 Market Valuations and Investment Strategies 00:00 Inflation Hedging: TIPS vs. Equities 04:23 The Break-Even Analysis of Social Security 09:54 Annuities and Inflation Protection 14:01 Roth Conversions and Tax Strategies 20:01 Social Security Strategies for Couples 26:58 Retirement Income Challenges and Strategies   Links Explore the New RetireWithStyle.com! We’ve launched a brand-new home for the podcast! Visit RetireWithStyle.com to catch up on all our latest episodes, explore topics by category, and send us your questions or ideas for future episodes. If there’s something you’ve been wondering about retirement, we want to hear it! The Retirement Planning Guidebook: 2nd Edition has just been updated for 2025! Visit your preferred book retailer or simply click here to order your copy today: https://www.wadepfau.com/books/ This episode is sponsored by Retirement Researcher https://retirementresearcher.com/. Download their free eBook, 8 Tips to Becoming A Retirement Income Investor at retirementresearcher.com/8tips

In this conversation, Wade Pfau and Alex Murguia discuss retirement planning topics including market downturns, buffer assets, demographic trends, and emerging products like tontines and buffered ETFs. They highlight how historical market performance shapes future expectations and emphasize the role of strategic asset allocation in retirement income planning. Takeaways Market downturns can last longer than five years, impacting retirement planning. Buffer assets can help retirees weather market downturns without selling at a loss. Demographic trends may influence market performance and interest rates in the future. Modern tontines could provide innovative solutions for retirement income. Combining safety for essential expenses with discretionary spending can optimize retirement income. Historical returns should not be the sole basis for future market assumptions. Buffered ETFs may serve as effective tools for risk diversification in high market valuation environments. Understanding the liquidity and terms of financial products is crucial for effective retirement planning. Technological advances may reshape traditional financial products like tontines. A diversified portfolio can help manage risks associated with market fluctuations.   Chapters   00:00 Introduction and Technical Setup 03:58 Market Downturns and Retirement Planning 12:59 Buffer Assets in Retirement 19:09 Tontines and Modern Financial Solutions 23:06 Combining Safety and Growth in Retirement Income 29:07 Buffered ETFs and Risk Diversification 33:31 Retirement Income Perspectives 34:06 Market Valuations and Investment Strategies   Links Explore the New RetireWithStyle.com! We’ve launched a brand-new home for the podcast! Visit RetireWithStyle.com to catch up on all our latest episodes, explore topics by category, and send us your questions or ideas for future episodes. If there’s something you’ve been wondering about retirement, we want to hear it! The Retirement Planning Guidebook: 2nd Edition has just been updated for 2025! Visit your preferred book retailer or simply click here to order your copy today: https://www.wadepfau.com/books/ This episode is sponsored by McLean Asset Management. Visit https://www.mcleanam.com/retirement-income-planning-llm/ to download McLean’s free eBook, “Retirement Income Planning”

In this episode of Retire with Style, Alex Murguia and Wade Pfau dive into key retirement planning topics, including sequence risk, the 4% rule, withdrawal strategies, and bond yields. They highlight the importance of a comprehensive financial plan that accounts for asset allocation, tax considerations- such as those related to TIPS and annuities- and the role of dynamic, risk-based guardrails. The discussion underscores how retirement income strategies must adapt over time to meet changing needs.   Takeaways Sequence risk is a critical factor in retirement planning. The 4% rule may not be applicable in all scenarios. Bond yields significantly impact sustainable withdrawal rates. Fixed percentage withdrawal strategies can mitigate sequence risk. Dynamic risk-based guardrails offer a flexible approach to spending. Financial planning is essential for effective retirement income management. TIPS are less tax-efficient than other bonds and should be placed in tax-advantaged accounts. Asset allocation should be tailored to individual risk tolerance and retirement goals. The traditional 100 minus age rule for asset allocation is a simplification. Retirement strategies should adapt as circumstances change.   Chapters   00:00 Introduction and Conference Insights 02:11 Exploring Sequence Risk and Spending Strategies 03:35 Understanding the 4% Rule and Bond Yields 10:19 Fixed Percentage Withdrawal Strategies 14:06 Dynamic Risk-Based Guardrails for Spending 20:06 The Role of Financial Planning in Retirement 27:18 Tax Implications of TIPS and Asset Location 29:56 Evaluating Stock-Bond Allocation Strategies   Links Join Our Next Live Q&A Session! We’re hosting our next Retire With Style YouTube Live Q&A on Monday, August 25th at 2:00 PM ET. Wade and Alex will be answering your retirement planning questions live! ✅ Submit your question in advance at retirewithstyle.com ✅ Or join us live and ask your question in the chat Come be part of the conversation- your questions often inspire future episodes! 📺 Subscribe to the Retire With Style YouTube Channel to be notified when we go live!   Explore the New RetireWithStyle.com! We’ve launched a brand-new home for the podcast! Visit RetireWithStyle.com to catch up on all our latest episodes, explore topics by category, and send us your questions or ideas for future episodes. If there’s something you’ve been wondering about retirement, we want to hear it! The Retirement Planning Guidebook: 2nd Edition has just been updated for 2025! Visit your preferred book retailer or simply click here to order your copy today: https://www.wadepfau.com/books/ This episode is sponsored by Retirement Researcher https://retirementresearcher.com/. Download their free eBook, 8 Tips to Becoming A Retirement Income Investor at retirementresearcher.com/8tips

In this episode of Retire with Style, Alex Murguia and Wade Pfau explore how buffer assets can help manage sequence risk in retirement. They discuss different types of buffer assets—including cash, home equity lines of credit (HELOCs), multi-year guaranteed annuities (MYGAs), and whole life insurance—and examine the trade-offs involved with each. Wade also shares insights on the evolving role of reverse mortgages in retirement planning, emphasizing the importance of weighing costs and long-term implications when incorporating these tools into a financial strategy. Takeaways Buffer assets help manage sequence risk by providing a safety net. Cash, HELOCs, and life insurance can serve as buffer assets. HELOCs may not be reliable during market downturns. MIGAs can be considered buffer assets under certain conditions. CDs can also function as buffer assets if withdrawal penalties are minimal. Reverse mortgages offer unique advantages but come with costs. The perception of reverse mortgages has evolved over time. Long-term care costs can be partially covered by reverse mortgages. Whole life insurance allows borrowing against cash value. Understanding the terms of financial products is crucial for effective planning.   Chapters 00:00Introduction and Overview of Sequence Risk 02:24Understanding Buffer Assets 05:32Exploring Alternatives: HELOCs and Other Options 08:51Evaluating Multi-Year Guaranteed Annuities (MIGAs) as Buffer Assets 10:51The Role of CDs and Fixed Indexed Annuities 13:27The Case Against Gold as a Buffer Asset 16:12Reverse Mortgages: Risks and Benefits 19:19Changing Perceptions of Reverse Mortgages 22:31Long-Term Care and Reverse Mortgages 25:38Whole Life Insurance Loans and Their Implications   Links Explore the New RetireWithStyle.com! We’ve launched a brand-new home for the podcast! Visit RetireWithStyle.com to catch up on all our latest episodes, explore topics by category, and send us your questions or ideas for future episodes. If there’s something you’ve been wondering about retirement, we want to hear it! The Retirement Planning Guidebook: 2nd Edition has just been updated for 2025! Visit your preferred book retailer or simply click here to order your copy today: https://www.wadepfau.com/books/ This episode is sponsored by McLean Asset Management. Visit https://www.mcleanam.com/retirement-income-planning-llm/ to download McLean’s free eBook, “Retirement Income Planning”

In this episode of Retire with Style, hosts Alex Murguia and Wade Pfau explore how to manage sequence of returns risk in retirement. They break down four key strategies: spending conservatively, staying flexible with spending, reducing investment volatility, and using buffer assets. The discussion also touches on how sequence risk can arise more than once—especially for early retirees—and how having a pension can affect your overall risk tolerance. Throughout the episode, they emphasize the value of starting retirement on solid footing and building a margin of safety into your plan.   Takeaways Sequence of returns risk is crucial for retirees. Four strategies to manage sequence of returns risk exist. Spending conservatively can mitigate risk. Flexible spending strategies can adapt to market conditions. Reducing investment volatility is essential for stability. Buffer assets provide a safety net during downturns. Early retirement years are particularly vulnerable to risk. A good start in retirement can set the tone for success. Pension income can change portfolio risk tolerance. Understanding personal risk preferences is key to financial planning.   Chapters 00:00Introduction to Sequence of Returns Risk 07:33Understanding the Four Strategies to Manage Risk 17:14Exploring Multiple Sequence of Returns Risks 19:30Portfolio Risk and Pension Considerations   Links Explore the New RetireWithStyle.com! We’ve launched a brand-new home for the podcast! Visit RetireWithStyle.com to catch up on all our latest episodes, explore topics by category, and send us your questions or ideas for future episodes. If there’s something you’ve been wondering about retirement, we want to hear it! The Retirement Planning Guidebook: 2nd Edition has just been updated for 2025! Visit your preferred book retailer or simply click here to order your copy today: https://www.wadepfau.com/books/ This episode is sponsored by Retirement Researcher https://retirementresearcher.com/. Download their free eBook, 8 Tips to Becoming A Retirement Income Investor at retirementresearcher.com/8tips

In this episode of Retire with Style, Wade Pfau and Alex Murguia tackle listener questions on a range of financial topics, including gold’s volatility, alternative investments, and how to measure retirement success. They discuss the realities of investment returns, the impact of recent U.S. bond downgrades, and the importance of understanding risk, using historical data, and maintaining a solid investment strategy in retirement.   Takeaways Gold has lower average returns and higher volatility than stocks. Alternative investments require careful evaluation due to lack of historical data. Quantifying retirement success rates can provide clearer financial goals. The magnitude of failure in financial planning is crucial to understand. Investors should assess the compensated risk of their investments. Monte Carlo simulations can help in understanding potential outcomes. The funded ratio approach simplifies retirement planning. US bond downgrades may not significantly impact long-term market trajectories. Understanding the underlying assumptions of financial plans is essential. Risk assessment is a key component of effective financial planning. Chapters 00:00 Introduction and Overview of Q&A Session 02:33 Debating Gold's Volatility and Investment Value 08:56 Exploring Alternative Investments and Their Evaluation 19:03 The Importance of Theoretical Justification in Investments 20:17 Understanding Retirement Planning Tools 23:04 Probability of Success vs. Rate of Return 27:21 Magnitude of Failure in Financial Planning 30:31 The Funded Ratio Approach 34:06 Evaluating Financial Advisors 36:15 Impact of US Bond Downgrades   Links Explore the New RetireWithStyle.com! We’ve launched a brand-new home for the podcast! Visit RetireWithStyle.com to catch up on all our latest episodes, explore topics by category, and send us your questions or ideas for future episodes. If there’s something you’ve been wondering about retirement, we want to hear it! The Retirement Planning Guidebook: 2nd Edition has just been updated for 2025! Visit your preferred book retailer or simply click here to order your copy today: https://www.wadepfau.com/books/ This episode is sponsored by McLean Asset Management. Visit https://www.mcleanam.com/retirement-income-planning-llm/ to download McLean’s free eBook, “Retirement Income Planning”

In this episode of Retire with Style, Alex Murguia and Wade Pfau explore Treasury Inflation-Protected Securities (TIPS) and their role in retirement planning. They cover the history of TIPS, their tax implications, and how they help protect against inflation. The conversation also addresses the drawbacks of TIPS, current market conditions, and the importance of clear communication- especially for couples where one partner is less engaged in financial matters.   Takeaways TIPS were introduced in 1997 to protect against inflation. TIPS provide a real rate of return that adjusts with inflation. Tax implications of TIPS make them less efficient than other investments. It's important to consider the inflation protection TIPS offer in retirement planning. Market timing is not a sound strategy for investing in TIPS. Communicating financial plans should focus on meaning rather than just numbers. Delaying Social Security can provide inflation-adjusted income. Laddering SPIAs can be an effective strategy for income planning. Understanding your spouse's values can enhance financial discussions. Having a contingency plan for financial management is crucial.   Chapters 00:00 Introduction to TIPS and Their Importance 02:57 Understanding TIPS: Historical Context and Current Trends 06:00 Tax Implications and Asset Location for TIPS 09:01 Inflation Protection Strategies in Retirement 12:01 Evaluating the Downsides of TIPS 14:58 Conclusion and Final Thoughts on TIPS 18:21 Understanding TIPS and Their Role in Portfolios 27:15 Communicating Financial Plans to Less Interested Spouses   Links Explore the New RetireWithStyle.com! We’ve launched a brand-new home for the podcast! Visit RetireWithStyle.com to catch up on all our latest episodes, explore topics by category, and send us your questions or ideas for future episodes. If there’s something you’ve been wondering about retirement, we want to hear it! The Retirement Planning Guidebook: 2nd Edition has just been updated for 2025! Visit your preferred book retailer or simply click here to order your copy today: https://www.wadepfau.com/books/ This episode is sponsored by Retirement Researcher https://retirementresearcher.com/. Download their free eBook, 8 Tips to Becoming A Retirement Income Investor at retirementresearcher.com/8tips

Explore the intricacies of retirement planning, from social security strategies tailored for couples to navigating bond ladders effectively. Discover how delaying benefits can favor higher earners and how low earners gain flexibility. Learn about the smart use of surplus funds for growth and the tax advantages of SPIAs funded by Roth IRAs. Flexibility in financial strategies is key, challenging traditional rules to personalize retirement planning for unique needs.