Retirement Planning

Wait, a built-in 8% raise for waiting? Wait, an automatic 8% raise just for waiting? Yep. In 2025, Social Security’s delayed retirement credits still boost your benefit by about 8% per year for every year you wait past your full retirement age (FRA) until age 70. That’s not a promo rate. That’s written into the rules for folks born in 1943 or later. If your FRA is 67 (that’s most people retiring now), waiting to 70 stacks roughly a 24% higher monthly check, before any cost-of-living adjustments (COLAs). A built-in raise for patience. Here’s why I start here. You can’t…

The hidden cost of a $0 paycheck Quick question, what’s the price tag on a year without wages? Feels like zero, right? Not quite. In 2025, when households are juggling childcare costs, high-ish mortgage rates, and a job market that’s still tight in spots, those “zero-earning” years can quietly chip away at two big things: your future Social Security check and your tax bill right now. I’ve watched this play out over two decades on the Street and, yep, it still surprises people. Me included, occasionally. Here’s the simple version: Social Security calculates your benefit using your highest 35 years…

The hidden cost you’re probably ignoring: sequence risk meets AI hype The hidden cost you’re probably ignoring isn’t the fund expense ratio or the bid/ask spread, it’s bad returns early in retirement. Sequence-of-returns risk is the budget-killer that doesn’t show up in glossy ETF fact sheets. Take a simple example: you retire with $1,000,000, plan to pull 4% ($40,000), and your portfolio drops 20% in year one. After withdrawals, you’re at about $768,000. Keep taking $40,000 and your effective withdrawal rate just jumped to ~5.2%, without you doing anything “wrong.” Do that in the first 5-10 years, and you’re locking…

A weak jobs report isn’t a recession, remember 33 days in 2020 A weak jobs report isn’t a recession, remember 33 days in 2020. The stat that resets expectations: in March 2020, the S&P 500 fell about 34% in just 33 days and then went on to hit new highs later that same year (2020). That’s your reminder that markets can move a lot faster than the economy, and faster than our nerves, too. I still have the coffee-stained notepad from my desk that month, futures were limit down in the morning and green by lunch. Whiplash city. One month…

The hidden cost nobody budgets for: policy whiplash The hidden cost nobody budgets for: policy whiplash. The Fed tweaks a sentence, bumps a dot, or shifts a rate path, and, poof, your retirement paycheck changes. Not your account balance, your monthly income line item. It’s the stealth expense people miss. A 1% swing in short-term rates can mean $10,000 a year on a $1 million cash/T-bill bucket. At 5%, that bucket throws off about $50,000; at 3%, it’s $30,000. Same principal. Different paycheck. And it can happen fast. For context: the Fed held the policy rate at 5.25%-5.50% for much…

Old-school rebalancing vs. the 2025 mindset Old-school rebalancing was simple: set a 60/40, check it once or twice a year, and go walk the dog. That still works mathematically. But it’s September 2025, and the tape trades like a macro headline machine. Payroll Friday hits at 8:30 a.m. ET, algorithms read the nonfarm payrolls line in under 50 milliseconds, and rates and sectors jerk around before your coffee cools. Here’s the tension we’re all feeling: your 401(k) isn’t a day-trading account, yet the market moves like one. So the real question is practical, not philosophical: should a hot or cold…

Wait, 31% have zero saved? Here’s why the Fed suddenly matters Wait, 31% have zero saved? That’s not a typo. The Federal Reserve’s 2023 Survey of Household Economics and Decisionmaking (published in 2024) found that 31% of non-retirees had no retirement savings. No IRA, no 401(k), nothing. When that many people are starting from zero, interest-rate moves aren’t just for bond geeks, they’re the difference between a plan that pencils out and one that… doesn’t. Here’s the setup in 2025: rate-cut odds keep whipsawing week to week, the 10‑year Treasury has ping‑ponged around the low 4s, and the labor market,…