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

In this episode of Retire with Style, Alex Murguia and Wade Pfau explore key retirement planning strategies, including how couples can optimize Social Security benefits, what to do with surplus funds from bond ladders, and the potential benefits of purchasing single premium immediate annuities (SPIAs) from Roth IRAs. They highlight the importance of maintaining flexibility and tailoring strategies to each retiree’s unique circumstances.

Takeaways

• Delaying social security can benefit the higher earner in a couple.
• The low earner has flexibility in claiming social security earlier.
• Using software can help determine optimal social security claiming strategies.
• Survivorship benefits are crucial in social security planning.
• Bond ladders are used for retirement income, not just reinvestment.
• Surplus funds from bond ladders can be invested in growth portfolios.
• Roth IRAs can be beneficial for purchasing SPIAs.
• SPIAs can provide tax-free income streams in retirement.
• Tax diversification is important in retirement planning.
• Real-life financial planning requires flexibility beyond strict rules.

Chapters

00:00 Introduction and Overview 01:16 Social Security Strategies for Couples 06:41 Managing Bond Ladder Surplus Funds 16:29 Exploring SPIAs in Retirement

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 answer listener questions on retirement planning for high earners. They explore tax strategies like Roth conversions and qualified charitable distributions, and discuss how tools like life insurance and annuities can help hedge longevity risk and support a stable retirement income.

Takeaways

• The importance of community engagement in retirement planning.
• High earners face unique tax challenges and strategies.
• Qualified charitable distributions can help manage tax implications.
• Roth conversions can be beneficial for reducing future RMDs.
• Understanding the widow's penalty in retirement planning is crucial.
• Annuities can provide income stability in later years.
• Life insurance can hedge against the risk of not living long enough.
• The interplay between income sources and tax brackets is complex.
• Gifting strategies can help manage estate taxes effectively.
• Combining life insurance and annuities can optimize retirement income.

Chapters

00:00 Introduction and Community Engagement 03:12 Exploring Tax Strategies for High Earners 06:09 Navigating Retirement Risks for Couples 11:49 Hedging Against Longevity Risks in Retirement 28:59 Conclusion and Future Q&A Sessions

Links

If you want to better understand how to protect your retirement from bad market timing, don’t miss Retirement Researcher’s free webinar: “Four Ways to Manage Sequence of Returns Risk,” hosted by Wade Pfau happening July 15th, 2025 from 1:00 - 2:00 PM ET. You’ll learn practical strategies to reduce volatility’s impact on your retirement income. Register now at retirewithstyle.com/podcast.

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 live Q&A session, Alex Murguia and Wade Pfau answer questions on key aspects of retirement income planning, including withdrawal strategies, the 4% rule, tax considerations, and the role of financial advisors. They discuss how age and financial circumstances can influence withdrawal rates and highlight the importance of using guardrails to manage risk. The conversation also touches on Medicare, ACA subsidies, gifting strategies, and investment approaches to help protect against inflation. Altogether, it offers practical insights for retirees planning their financial future.

Takeaways

• The 4% rule is a guideline for a 30-year withdrawal strategy.
• Withdrawal rates can vary based on age and time horizon.
• Guardrails can help manage sequence of returns risk in retirement.
• Tax strategies are crucial for overfunded retirees to minimize liabilities.
• Medicare and ACA subsidies can impact retirement income planning.
• Gifting strategies can help manage estate taxes and provide for heirs.
• Investment strategies should consider inflation protection, especially for those without Social Security.
• Financial advisors can provide valuable guidance in retirement planning.
• Risk management is essential to ensure sustainable income in retirement.
• Planning for retirement involves both financial and non-financial considerations.

Chapters

00:00 Introduction to Retirement Income Strategies 06:07 Understanding the 4% Rule and Its Variations 11:55 Exploring Withdrawal Rates for Different Ages 21:01 Strategies for Overfunded Retirement Scenarios 30:14 Balancing Total Return and Income Protection Strategies 32:40 Spending Strategies for Retirement Accounts 35:50 Charitable Giving and Roth Accounts 39:31 Mortgage vs. Roth IRA Contributions 43:57 Withdrawal Strategies in Retirement 49:41 Key Steps Before Retirement 53:08 Roth Conversions and IRMA 56:28 Inflation Protection for Educators 01:01:15 Understanding Risk-Wrapper 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