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<title>Glory Days (They’ll Pass You By)</title>
<link>https://www.theretirementmanifesto.com/glory-days-theyll-pass-you-by/?utm_source=rss&utm_medium=rss&utm_campaign=glory-days-theyll-pass-you-by</link>
<comments>https://www.theretirementmanifesto.com/glory-days-theyll-pass-you-by/#comments</comments>
<dc:creator><![CDATA[Fritz Gilbert]]></dc:creator>
<pubDate>Thu, 16 Oct 2025 07:23:50 +0000</pubDate>
<category><![CDATA[Retirement]]></category>
<category><![CDATA[carpe diem]]></category>
<category><![CDATA[contentment]]></category>
<category><![CDATA[Inspiration]]></category>
<category><![CDATA[Just Do It]]></category>
<category><![CDATA[Purpose]]></category>
<guid isPermaLink="false">https://www.theretirementmanifesto.com/?p=16614</guid>
<description><![CDATA[It was a beautiful October afternoon.  I was driving home after an enjoyable mountain bike ride in the Appalachian Mountains, savoring the cool breeze through the open windows in my […]
The post <a href="https://www.theretirementmanifesto.com/glory-days-theyll-pass-you-by/">Glory Days (They’ll Pass You By)</a> appeared first on <a href="https://www.theretirementmanifesto.com">The Retirement Manifesto</a>.
]]></description>
<content:encoded><![CDATA[It was a beautiful October afternoon. 
I was driving home after an enjoyable mountain bike ride in the Appalachian Mountains, savoring the cool breeze through the open windows in my pickup truck.
The radio was on (yes, I’m an old-timer who still listens to the radio, typically a local Classic Rock station), when Bruce Springsteen started belting out his catchy 1984 song…Glory Days. 
Feel free to watch <a href="https://youtu.be/6vQpW9XRiyM?si=UUwXMoRVhNY6QcJK&t=39" target="_blank" rel="noopener">the video</a> of that infamous tune, but here are some key lyrics to spark your memory:
<ul>
<li>“I had a friend who was a baseball player, back in high school…”</li>
<li>“We went back inside, sat down, had a few drinks, but all he kept talking about was Glory Days…”</li>
<li>“Glory Days, well they’ll pass you by. Glory Days, in the wink of a young girl’s eye.”</li>
<li>“And I hope when I get old, I don’t sit around thinking about it. But I probably will.”</li>
</ul>
The song got me thinking….
…and that thinking led to today’s post.
Glory Days…they’ll pass you by.
It’s not only applicable to high school memories.  It turns out to also be a great reminder for our retirement years.
<hr />Bruce Springsteen sang of the Glory Days. His song about high school memories applies equally well to retirement. <a href='https://twitter.com/intent/tweet?url=https%3A%2F%2Fwww.theretirementmanifesto.com%2Fglory-days-theyll-pass-you-by%2F&text=Bruce%20Springsteen%20sang%20of%20the%20Glory%20Days.%20His%20song%20about%20high%20school%20memories%20applies%20equally%20well%20to%20retirement.&via=retiremanifesto&related=retiremanifesto' target='_blank' rel="noopener noreferrer" >Share on X</a> <hr />
<img fetchpriority="high" decoding="async" class="alignnone size-full wp-image-16622" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/10/Screenshot-2025-10-05-11.44.39-AM.png" alt="how to enjoy retirement" width="440" height="667" srcset="https://www.theretirementmanifesto.com/wp-content/uploads/2025/10/Screenshot-2025-10-05-11.44.39-AM.png 440w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/10/Screenshot-2025-10-05-11.44.39-AM-198x300.png 198w" sizes="(max-width: 440px) 100vw, 440px" />
<hr>
<h1>Glory Days (They’ll Pass You By)</h1>
As I listened to Bruce, my thoughts drifted.
Do I want my life to be focused on the “Glory Days” of the past, or would I rather be intentional about enjoying my current life?
I’ll take Door #2 for $100, Alex.  Every time.
I don’t want to be one of those “old people” who tell the same old stories from their earlier Glory Days.  Better to embrace the current, appreciate the life we’re enjoying today, and reflect on the Glory Days we have left to live.
My thoughts drifted to the contrast between my life now and my life in high school. 
I have great memories of high school, but those days don’t even compare to the days I’m living now.  Back in high school, I had lots of friends, but also dealt with the awkward peer pressure/acceptance issues that all teenagers face. Scraping together a few bucks to go out on the weekend required a part-time job.  In retirement, I’m financially independent, happily married, have as many friends as I did in those old Glory Days, and am making a small impact on the world through my writing and my wife’s charity.
Retirement is like high school with money and no need to attend class, take tests, or do homework.
I would argue that retirement life is better than high school life. Today, I’ll share 5 examples to prove the point that we’re actually living our Glory Days now.  As you read through these examples…
<ul>
<li>Think about your own “Glory Days” list.   </li>
<li>What are you doing now that classifies as “Glory Day Living?” </li>
<li>If your list is short, what can you add to add more “Glory Days” to your life?  </li>
</ul>
Never stop experimenting. Your glory days are out there, but they will pass you by. 
Make them happen, while you still can.
<hr>
<h1>5 Examples Of Living The Glory Days</h1>
<figure id="attachment_16635" aria-describedby="caption-attachment-16635" style="width: 505px" class="wp-caption alignnone"><img decoding="async" class="size-full wp-image-16635" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/10/Screenshot-2025-10-08-12.38.22-PM.png" alt="" width="505" height="498" srcset="https://www.theretirementmanifesto.com/wp-content/uploads/2025/10/Screenshot-2025-10-08-12.38.22-PM.png 505w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/10/Screenshot-2025-10-08-12.38.22-PM-300x296.png 300w" sizes="(max-width: 505px) 100vw, 505px" /><figcaption id="caption-attachment-16635" class="wp-caption-text">Letting Toby enjoy a swim after a 6-mile hike.</figcaption></figure>
1. Playing In The Woods (on a weekday)
One of my true joys in retirement is being able to enjoy the woods on weekdays, when all of the tourists are back at work.  October is my favorite month to be outside, and I’ve been taking full advantage of it.  In each of the past three weeks, I’ve taken Toby for a 6+ mile hike.  Like his “Dad,” he is an active soul, and it’s helpful to let him burn some energy off in the gorgeous mountain area we call home. I’ve also gone mountain biking, and enjoyed “Sunday walks” with my wife on a nice 2.5-mile loop by our cabin.
As I look up at the breeze blowing the colored leaves on an Appalachian mountainside, I pause in appreciation and give thanks for being able to live these…
…Glory Days.
<hr>
<figure id="attachment_16628" aria-describedby="caption-attachment-16628" style="width: 450px" class="wp-caption alignnone"><img decoding="async" class="wp-image-16628 size-full" style="font-weight: bold; font-size: 1rem;" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/10/20251003_132446-scaled-e1759681031565.jpg" alt="" width="450" height="600"><figcaption id="caption-attachment-16628" class="wp-caption-text">Gracie (middle) enjoys her daily walks down our road.</figcaption></figure>
2. Gracie: Our 16-Year-Old Rescue Dog
We adopted Gracie, a “16-year-old” dog, last year (*).  Gracie was tied to a chain, and we were building a fence for her through my wife’s charity, <a href="https://www.facebook.com/freedomforfido" target="_blank" rel="noopener">Freedom For Fido.</a>  She stole our hearts, and we thought we’d give her a better life for the few short months she likely had remaining. Her owner wasn’t responsible, and he was happy to let us adopt her.
We knew we’d be heartbroken when she died, but felt the benefit was worth the cost.
* When we brought Gracie home, she bounded up onto our couch and jumped off the back of the couch onto the floor.  “There’s no way she’s 16,” we thought. (Her owner had told us that she was 16).  Our vet guessed she was 8 – 10 years old, and we subsequently found a sibling through a DNA match and confirmed her age at 10 years old.
We thought Gracie would be gone by now.  Instead, we savor every day we get with her.  We consider every one of them to be…
…Glory Days.
<hr>
<figure id="attachment_16647" aria-describedby="caption-attachment-16647" style="width: 650px" class="wp-caption alignnone"><img loading="lazy" decoding="async" class="size-full wp-image-16647" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/10/Screenshot_20240609-121252-1-e1759945928790.png" alt="" width="650" height="486"><figcaption id="caption-attachment-16647" class="wp-caption-text">Octavia at “Grand Camp” with Grandpa and Grandma.</figcaption></figure>
3. Watching A Grandchild Grow
If you have children, you likely reflect on how quickly the time passed. 
Knowing that, we’re focusing on creating as many positive experiences with our 6-year-old granddaughter as possible.  We’ve started an annual tradition called “Grand Camp,” where Octavia comes to the mountains for a week every summer to do “fun kid stuff” with Grandma and Grandpa. 
It’s our favorite week of the year. 
We build a list all year of activities we think she’d enjoy, then flood the week with great experiences.  We capture the week in photos and give her a hard-bound book every year at Christmas titled “Grand Camp,” with the year engraved on the cover.  Every one of the photos in that book serves as a reminder that we’re living in a time that will pass all too quickly…
…Glory Days.
<hr>
<figure id="attachment_16639" aria-describedby="caption-attachment-16639" style="width: 600px" class="wp-caption alignnone"><img loading="lazy" decoding="async" class="size-full wp-image-16639" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/10/20251001_102539-scaled-e1759943331721.jpg" alt="" width="600" height="450"><figcaption id="caption-attachment-16639" class="wp-caption-text">Our 188th Freedom For Fido fence build.</figcaption></figure>
4. Making A Difference In Our Community
My wife and I never dreamed that we’d be running a charity in retirement.  (For my newer readers, we build free fences for low-income families with dogs in need).  Working arm-in-arm with my wife on the mission makes it special for both of us, and we savor the work we’re doing. 
<a href="https://freedomforfido.com/" target="_blank" rel="noopener">Freedom For Fido</a> has become the thing we enjoy more than anything else at this stage in our lives. I’ve written the story behind the charity in my article, <a href="https://www.theretirementmanifesto.com/freedom-for-fido-a-story-of-finding-purpose-in-retirement/" target="_blank" rel="noopener">“Freedom For Fido – A Story Of Finding Purpose in Retirement.”</a>
When my wife started it, we had no idea that we’d still be going strong 6 years later, and rapidly approaching our 200th fence build (Build #190 is happening this week – <a href="https://www.facebook.com/freedomforfido" target="_blank" rel="noopener">follow our Facebook page</a> for pics as we approach #200!).
The benefits of this work have exceeded our expectations, including:
<ul>
<li>Relationships: We call our volunteers “The Fido Family” for a reason.  </li>
<li>Physical Activity:  I’m in the best shape of my life, in part due to my desire to never stop building fences.</li>
<li>Purpose:  Giving back to those in need brings rewards like nothing else.</li>
</ul>
At every build, my wife does an amazing job of “keeping it fun,” and it’s rewarding to hear the laughter and see the smiles on all of our volunteers’ (and recipients’) faces.  As our society has grown increasingly divisive, she established a guideline that “No Politics Allowed – this is all about the dogs.”   It’s a true joy to watch individuals from “both sides of the aisle” working side by side, with smiles on their faces (one of the few remaining places in our society where that occurs, I’d imagine?).
Everyone talks about the fantastic atmosphere on our builds, and my wife deserves all the credit for keeping it that way. Every time I head out for a Build Day, I take a moment to appreciate the fact that I’m living in our…
…Glory Days.
<hr>
<figure id="attachment_16641" aria-describedby="caption-attachment-16641" style="width: 600px" class="wp-caption alignnone"><img loading="lazy" decoding="async" class="size-full wp-image-16641" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/10/20251005_122354-scaled-e1759944083273.jpg" alt="writing studio design" width="600" height="450"><figcaption id="caption-attachment-16641" class="wp-caption-text">My “Treehouse Writing Studio” (taken as I was writing today’s post)</figcaption></figure>
5. The Retirement Manifesto
10 years in, and <a href="https://www.theretirementmanifesto.com/on-being-a-writer/" target="_blank" rel="noopener">I still love the feeling of “Flow” I experience</a> when I write these articles.  Having a platform to exercise my mind, share my experiences, and provide content that (hopefully) benefits the reader makes my life better.  I savor every reader email and comment that reminds me that the work I do in <a href="https://www.theretirementmanifesto.com/the-treehouse-writing-studio/" target="_blank" rel="noopener">this writing studio</a> is making an impact on people’s lives.  How many people get the opportunity to write something that can impact others? I consider it a blessing, and it’s an area of my life that constantly reminds me that I’m living in…
…Glory Days.
<hr>
<h1><img loading="lazy" decoding="async" class="alignnone size-full wp-image-16643" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/10/autumn-437769_640.jpg" alt="" width="640" height="480" srcset="https://www.theretirementmanifesto.com/wp-content/uploads/2025/10/autumn-437769_640.jpg 640w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/10/autumn-437769_640-300x225.jpg 300w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/10/autumn-437769_640-360x270.jpg 360w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/10/autumn-437769_640-80x60.jpg 80w" sizes="auto, (max-width: 640px) 100vw, 640px" /></h1>
<h1>The Glory Days – They’ll Pass You By</h1>
It’s appropriate that I’m writing this article in October. Like the leaves falling steadily outside my writing studio windows, I know these Glory Days will pass. In a few short years, I’ll be looking back with fond memories on the life I’m living right now.  
I had a stark reminder of that as I read the following in a recent Kiplinger article, <a href="https://www.kiplinger.com/retirement/retirement-planning/need-a-reason-to-retire-early-consider-these-eye-opening-stats" target="_blank" rel="noopener">“Need A Reason To Retire Early? Consider These Eye-Opening Stats.”</a>
<hr>
“As of 2021, the U.S. health life expectancy or HALE is 63.9 years, according to the <a href="https://data.who.int/countries/840" target="_blank" rel="noopener">World Health Organization</a>, the average age a person is expected to live in good health without having chronic diseases or significant disabilities.”
<hr>
Read that again. 
How long, realistically, do we have before our health begins to decline? 
None of us knows the answer to that question, but just like our days in high school, or our days of raising a young child, we can be assured that these days will, indeed, pass us by.
I urge you to have a sense of urgency as you seek to create as many Glory Days as possible in your life. Don’t spend your life thinking about the past.  Focus on the present.  
Create and enjoy your Glory Days.
They will, indeed, pass you by.
Savor every minute until they’re gone.
<hr>
Your Turn:  What are you experiencing in your life now that qualifies as “Glory Days?” If your Glory Days are behind you, what regrets do you have, or what changes are you considering to fill your current life with Glory Days? Finally, I’ve got to ask: What’s better – high school or retirement?  Let’s chat in the comments…
The post <a href="https://www.theretirementmanifesto.com/glory-days-theyll-pass-you-by/">Glory Days (They’ll Pass You By)</a> appeared first on <a href="https://www.theretirementmanifesto.com">The Retirement Manifesto</a>.
]]></content:encoded>
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<slash:comments>27</slash:comments>
<post-id xmlns="com-wordpress:feed-additions:1">16614</post-id> </item>
<item>
<title>What’s More Important Than a Safe Withdrawal Rate?</title>
<link>https://www.theretirementmanifesto.com/whats-more-important-than-a-safe-withdrawal-rate/?utm_source=rss&utm_medium=rss&utm_campaign=whats-more-important-than-a-safe-withdrawal-rate</link>
<comments>https://www.theretirementmanifesto.com/whats-more-important-than-a-safe-withdrawal-rate/#comments</comments>
<dc:creator><![CDATA[Dana Anspach]]></dc:creator>
<pubDate>Thu, 02 Oct 2025 07:36:31 +0000</pubDate>
<category><![CDATA[Retirement]]></category>
<category><![CDATA[asset allocation]]></category>
<category><![CDATA[financial planning]]></category>
<category><![CDATA[retirement planning]]></category>
<category><![CDATA[safe withdrawal rate]]></category>
<guid isPermaLink="false">https://www.theretirementmanifesto.com/?p=16593</guid>
<description><![CDATA[On a random weekday earlier this month, a few hours of unexpected free time materialized on my calendar. My eyes quickly darted to Bill Bengen’s new book, A Richer Retirement: […]
The post <a href="https://www.theretirementmanifesto.com/whats-more-important-than-a-safe-withdrawal-rate/">What’s More Important Than a Safe Withdrawal Rate?</a> appeared first on <a href="https://www.theretirementmanifesto.com">The Retirement Manifesto</a>.
]]></description>
<content:encoded><![CDATA[On a random weekday earlier this month, a few hours of unexpected free time materialized on my calendar.
My eyes quickly darted to Bill Bengen’s new book, <a href="https://amzn.to/4793mZl" target="_blank" rel="noopener">A Richer Retirement: Supercharging the 4% Rule to Spend More and Enjoy More</a>, (Amazon Affiliate link), which had been sitting on my desk since its arrival on August 5th.
I snatched it up and closed my office door, fearing some unknown pressing need would encroach upon this gift of time.
By afternoon’s end, the text was devoured. To make sure I correctly interpreted his words, I set up a Zoom meeting with Bill to have a one-on-one conversation. It felt like two kindred Vulcans discussing their quest to find a logical answer to something that cannot be answered with logic.  
What is this mythical quest?
The perfect withdrawal plan.
In this post, I’ll share key concepts from the book and from my talk with Bill.
<hr />Today, I review Bill Bengen's latest book in my quest for the perfect retirement withdrawal plan. <a href='https://twitter.com/intent/tweet?url=https%3A%2F%2Fwww.theretirementmanifesto.com%2Fwhats-more-important-than-a-safe-withdrawal-rate%2F&text=Today%2C%20I%20review%20Bill%20Bengen%27s%20latest%20book%20in%20my%20quest%20for%20the%20perfect%20retirement%20withdrawal%20plan.&via=retiremanifesto&related=retiremanifesto' target='_blank' rel="noopener noreferrer" >Share on X</a> <hr />
<img loading="lazy" decoding="async" class="alignnone size-full wp-image-16600" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/09/Screenshot-2025-09-30-10.53.16-AM-e1759244570970.png" alt="A Richer Retirement" width="400" height="579">
But first, why was I so eagerly anticipating this book? Who is <a href="https://en.wikipedia.org/wiki/William_Bengen" target="_blank" rel="noopener">Bill Bengen</a>, you may ask?
<hr>
<h2>The Father of the 4% Rule</h2>
Bill is, unintentionally, the “father” of the 4% rule. It started with a research paper he published in 1994.
An MIT grad in Aeronautics and Astronautics, he worked in his family’s bottling and distribution business. After the company was sold in 1987, he shifted into financial planning.
When clients began asking how much they could safely withdraw in retirement, he discovered that finding answers proved more challenging than he imagined. Industry responses from financial colleagues were inconsistent and lacked supporting research.
His engineering mind went to work, seeking a mathematical solution to the problem.
He used historical data to test portfolio designs for SAFEMAX – the highest safe withdrawal rate for a given set of parameters. His initial analysis utilized a 50/50 portfolio of U.S. large-company stocks and intermediate-term government bonds, tested over a thirty-year time horizon.
The result?
A 4.15% SAFEMAX rate. The withdrawal rate at which, over the parameters he tested, no retiree would have run out of money. Bengen felt that the ‘.05’ decimal place implied greater precision than the research justified, so he rounded down to 4.1%. With media involvement, it became abbreviated, and the “4% rule” was born.
As Bengen himself says, it was never meant to be a law like one of Newton’s Laws of Motion — just a starting point.
<hr>
<h2>What’s Changed Since 1994?</h2>
A simple two-asset class portfolio no longer reflects reality.
His latest model includes small-cap, micro-cap, international, and Treasury bills. With 55% stocks, 40% bonds, and 5% cash, his updated SAFEMAX rises to 4.7%.
But here’s the catch: that’s the worst-case retiree, the unlucky one who retired into the toughest market sequence.
His historical testing encompasses 349 retirees, each retiring one calendar quarter apart. And thus, the 4.7% rate applies to only one of the 349 – the one who experienced the worst timing of market conditions.
He emphasizes, if all retirees indiscriminately use the 4.7% SAFEMAX for their withdrawal plan, they would significantly underspend.
In fact, the average portfolio balance for all retirees (in his research) was more than five times its initial value, meaning that for most, the universally safe rate was too safe.
<hr>
<h2>Valuation and Inflation</h2>
How much should recent stock market highs factor into your withdrawal rate?
Bengen’s latest book includes a section on the impact of stock valuations and inflation. Using CAPE ratios (Shiller Cyclically Adjusted Price-to-Earnings Ratio (Shiller CAPE, a measure of stock market valuation) and CPI (Consumer Price Index, a measure of inflation), he builds tables to guide starting withdrawal amounts.
(You can find these tables on his website under <a href="https://www.bengenfs.com/charts-tables-for-you/" target="_blank" rel="noopener">Charts and Tables</a>, Chapter 2, tables 2.1 through 2.4.)
For example, if the Shiller CAPE is at 19 and the CPI is between 2.5% and 5%, that equates to a 6.95% SAFEMAX starting withdrawal rate.
If the Shiller CAPE were even higher, as it is today, would that materially lower the expected SAFEMAX for someone retiring today?
Maybe. The answer is complicated.
Bill told me that today (as of our Sept. 27, 2025, conversation), 5.5% would be his SAFEMAX, even with current market valuations.
However, he emphasized that it’s a fluid number. It can change. It’s not intended as a “set it and forget it” strategy.
He also acknowledged that as portfolio diversification expands beyond the large-cap asset class, results are not as highly correlated with metrics like the Shiller CAPE.
And he feels investors spend too much time worrying about the garden-variety bear markets when sustained high inflation is the bigger risk.
To hedge against sustained higher inflation, you must have enough equities in your portfolio to grow it sufficiently to maintain your spending power.
Perhaps that’s why his recommended allocation to equities continues to rise.
<hr>
<h2><img loading="lazy" decoding="async" class="alignnone size-full wp-image-16610" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/09/pie-chart-7658449_640.jpg" alt="what asset allocation should I have in retirement?" width="640" height="360" srcset="https://www.theretirementmanifesto.com/wp-content/uploads/2025/09/pie-chart-7658449_640.jpg 640w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/09/pie-chart-7658449_640-300x169.jpg 300w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/09/pie-chart-7658449_640-135x75.jpg 135w" sizes="auto, (max-width: 640px) 100vw, 640px" /></h2>
<h2>Today’s Allocation Debate</h2>
In one of Bill’s latest <a href="https://www.linkedin.com/feed/update/urn:li:activity:7377133671327322113/" target="_blank" rel="noopener">LinkedIn posts</a>, he said,
<blockquote>“I recommend that the 55% allocation to stocks used frequently in my book be upgraded to 65% for all retirees with planning horizons of at least 20 years.”</blockquote>
What’s my thinking about that? Naturally, the answer is, “It depends.”
What does it depend on? Your individual financial circumstances and behavioral tendencies.
I say:
<blockquote>Know thyself, and thy ‘right-fit’ portfolio shall reveal itself unto you.  </blockquote>
For example, if you are delaying Social Security and relying entirely on your portfolio for early spending needs — and you feel anxious about market risk — starting with a more conservative stance, perhaps 55% equities, may make more sense. If all goes well, your equity allocation can float up over time.
Bengen discusses this approach, called the <a href="https://www.kitces.com/blog/should-equity-exposure-decrease-in-retirement-or-is-a-rising-equity-glidepath-actually-better/" target="_blank" rel="noopener">“rising equity glidepath,”</a> favorably in his book.
<hr>
<h2><img loading="lazy" decoding="async" class="alignnone size-full wp-image-16607" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/09/dart-1943313_640.jpg" alt="what's the 4% safe withdrawal rate?" width="640" height="360" srcset="https://www.theretirementmanifesto.com/wp-content/uploads/2025/09/dart-1943313_640.jpg 640w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/09/dart-1943313_640-300x169.jpg 300w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/09/dart-1943313_640-135x75.jpg 135w" sizes="auto, (max-width: 640px) 100vw, 640px" /></h2>
<h2>What the 4% Rule Misses</h2>
When it comes to taxes, percentage calculations are gross withdrawals. They do not represent spendable income. You’ll have to assess taxes and how much of that gross withdrawal is available to spend.
Taxes are one of several factors I cover in my free report, <a href="https://www.sensiblemoney.com/four-percent-rule/" target="_blank" rel="noopener">Four Things Near Retirees Must Know About the 4% Rule</a>, where I discuss several items not covered in the traditional 4% rule approach.
The bottom line – while we all want certainty and a neat mathematical formula to follow, life doesn’t work that way. You need a fluid and dynamic process. Not a rule.
<hr>
<h2>The Most Important Factor</h2>
Bill summed it up succinctly,
<blockquote>“Have a plan so you don’t run out.”</blockquote>
Not a rule. Not a percentage. Instead, a structured process.
The process itself is what matters most — deciding on your structure, monitoring, measuring, and adjusting consistently. The output of this process allows your withdrawals to adjust dynamically.
How often do you monitor and adjust?
Bill and I are in sync on this; annual reviews are sufficient. Measuring at random highs or lows may lead you off course.
My preference is updating plans annually based on year-end values. If your software or measuring process updates based on real-time values, you may get a warped view.
For example:
<ul>
<li>If measuring near market peaks, it may lead you to withdraw too much.</li>
<li>If reassessing near market bottoms, it may lead you to withdraw too little.</li>
</ul>
<hr>
<h2><img loading="lazy" decoding="async" class="alignnone size-full wp-image-16608" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/09/danger-1927503_640.jpg" alt="will I run out of money in retirement?" width="640" height="426" srcset="https://www.theretirementmanifesto.com/wp-content/uploads/2025/09/danger-1927503_640.jpg 640w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/09/danger-1927503_640-300x200.jpg 300w" sizes="auto, (max-width: 640px) 100vw, 640px" /></h2>
<h2>Managing Risk</h2>
Both Bill and I were practicing advisors during the Great Recession. We remember the fear.
In his words, “It’s hard to imagine something worse than that. I was plain scared”.
So was I.
It’s easy to forget that feeling in today’s high markets.
That’s why having a third party to help manage risk is so valuable — to temper overconfidence in bull markets and fear in bear markets.
Who do you turn to help remain objective about your decisions? 
This applies to advisors, too. I am forever grateful for a team of colleagues, as we keep each other grounded in our thinking.
Like me, Bill favors remaining 100% equities during the accumulation phase, but advises adjusting to a more conservative position as retirement approaches.
When asked about the magnitude and timing of such adjustments, he said it depends on market conditions. And added that in today’s market, he’d lean toward a sharper reduction in equities for those nearing retirement.
<hr>
<h2>Connecting Cash Flow to Allocation</h2>
To connect cash flow needs to your portfolio allocation and withdrawal rate, you need a process.
In Fritz’s last post, <a href="https://www.theretirementmanifesto.com/retirement-success/" target="_blank" rel="noopener">3 Questions That Determine 99% of Your Retirement Success</a>, he begins with “Do You Have a Reliable Cash Flow Plan?”.
Your cash flow plan is the starting place for connecting your portfolio to your life. I break it into four parts.
<ol>
<li>Start with an income timeline —  a map of all incoming cash flows that do not come from your portfolio assets. This includes items such as Social Security, pensions, annuity income, deferred compensation payouts with a set schedule, and rental income.</li>
<li>Next comes an expense timeline. Expenses are rarely linear. Some years may include more travel, a new car, or funding a wedding. Other years may not have such large outflows.</li>
<li>Then, you calculate the gap, which is the difference between your income and expense timelines. This gap illustrates the year-by-year amount needed from savings and investments.</li>
<li>Finally, you solve for a tax-managed way to cover that gap, dependent on what account types you have.</li>
</ol>
This type of process maps your withdrawals down to the account level.
Show me what someone needs to withdraw from which account in which year, and I can recommend a starting allocation.
And while I can calculate the withdrawal rate too, I don’t find the annual withdrawal rate matters so much as long as the lifetime withdrawals result in a reasonable “fundedness” level.
Fundedness is a measure that pension plans use, comparing plan assets to the future cash flows to be delivered. This metric can be applied to a household’s balance sheet just as well as to a pension plan.
I find this process so fundamental that I am befuddled by how someone would come up with a starting allocation or withdrawal rate without first mapping cash flows.
<hr>
<h2>Final Thoughts</h2>
Bill’s process leads him to comfortably conclude that a 5.5% gross withdrawal rate is reasonable today – but only as a starting point. It’s not a forever number to follow.
With my preferred process of mapping cash flows and connecting the financial plan to the portfolio, a household’s safe withdrawal rate for the year could be in excess of 10% or below 4%.  
But following my process, Fritz’s process, or Bengen’s process isn’t as crucial as making sure you have a process to follow.  As for the answer to the article of today’s post (“What’s more important than a Safe Withdrawal Rate?”), I hope the answer is now clear:
Regardless of which withdrawal rate you use in your retirement, the more important question is what process will you establish to keep your spending on track throughout your retirement?
And that, I believe, is the key. Whatever you use – stick by it.
It reminds me a bit of James Clear’s acclaimed book <a href="https://amzn.to/3KlFLNg" target="_blank" rel="noopener">Atomic Habits</a> (Amazon Affiliate link). You need “atomic habits” that you apply to your retirement process.
What about you? If you are nearing retirement, or already retired, what process do you use to determine how much you can safely withdraw? And how often do you measure and reassess? We welcome your thoughts below so we can all learn from one another.
The post <a href="https://www.theretirementmanifesto.com/whats-more-important-than-a-safe-withdrawal-rate/">What’s More Important Than a Safe Withdrawal Rate?</a> appeared first on <a href="https://www.theretirementmanifesto.com">The Retirement Manifesto</a>.
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<item>
<title>3 Questions That Determine 99% of Your Retirement Success</title>
<link>https://www.theretirementmanifesto.com/retirement-success/?utm_source=rss&utm_medium=rss&utm_campaign=retirement-success</link>
<comments>https://www.theretirementmanifesto.com/retirement-success/#comments</comments>
<dc:creator><![CDATA[Fritz Gilbert]]></dc:creator>
<pubDate>Thu, 18 Sep 2025 07:59:21 +0000</pubDate>
<category><![CDATA[Retirement]]></category>
<category><![CDATA[budget]]></category>
<category><![CDATA[contingency planning]]></category>
<category><![CDATA[financial planning]]></category>
<category><![CDATA[retirement planning]]></category>
<guid isPermaLink="false">https://www.theretirementmanifesto.com/?p=16171</guid>
<description><![CDATA[We all know the importance of planning when it comes to achieving retirement success. But what, exactly, should you plan for?   Today, we’re boiling it down to the three questions […]
The post <a href="https://www.theretirementmanifesto.com/retirement-success/">3 Questions That Determine 99% of Your Retirement Success</a> appeared first on <a href="https://www.theretirementmanifesto.com">The Retirement Manifesto</a>.
]]></description>
<content:encoded><![CDATA[We all know the importance of planning when it comes to achieving retirement success.
But what, exactly, should you plan for?  
Today, we’re boiling it down to the three questions you must answer before you retire.
Answer all three correctly, and you’ll be well on your way to retirement success.
Sounds easy, right??
Hold that thought.  Done right, it will take you some time to work through what initially seems to be an easy homework assignment.  Take your time.
Your retirement success depends on it.
<hr />Today, 3 questions you should answer before you make the decision to retire. <a href='https://twitter.com/intent/tweet?url=https%3A%2F%2Fwww.theretirementmanifesto.com%2Fretirement-success%2F&text=Today%2C%203%20questions%20you%20should%20answer%20before%20you%20make%20the%20decision%20to%20retire.&via=retiremanifesto&related=retiremanifesto' target='_blank' rel="noopener noreferrer" >Share on X</a> <hr />
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<hr>
<h1>3 Questions That Determine 99% of Your Retirement Success</h1>
Once upon a time, I had a boss who was really, really good at asking questions.
We all knew if we were making a presentation, we’d better be prepared for the barrage of questions to follow.  She had an innate ability to drill down to the issues that truly mattered.  It was something we all noticed, and a skill few of us possess.
To help those of you who struggle with asking the right questions, today I’ll present the top 3 questions you need to answer as you prepare for retirement.
Like my old boss, if you answer these correctly, you’ll know you’re tackling the issues that really matter.
<hr>
<img loading="lazy" decoding="async" class="alignnone size-full wp-image-16555" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/09/dollars-499481_640.jpg" alt="" width="638" height="286" srcset="https://www.theretirementmanifesto.com/wp-content/uploads/2025/09/dollars-499481_640.jpg 638w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/09/dollars-499481_640-300x134.jpg 300w" sizes="auto, (max-width: 638px) 100vw, 638px" />
Question 1:  Do You Have A Reliable Cash Flow Plan?
No one wants to spend their retirement worrying about money.
To minimize that concern in retirement, it’s important to do some math on the front end.  While many questions about retirement are difficult to answer, getting a handle on your expenses and income isn’t too difficult. 
Time-consuming, yes.  But worth every minute.
In short, developing a cash flow plan requires you to estimate your retirement spending and income, ensuring you have sufficient income to cover your expenses over the duration of your retirement.
In our case, we tracked every dime we spent for a year, then made adjustments to reflect how we expected our spending would change post-retirement (downsizing, more travel, etc.). In reality, getting an estimate for your retirement spending is one of the easier tasks in retirement planning, and yet many folks “take a swag” instead of spending the time required to build a solid “bottom-up” forecast. For details on how I did this as I was planning for retirement (including screenshots of my spreadsheets), check out <a href="https://www.theretirementmanifesto.com/25-when-can-i-retire-step-1-spending/" target="_blank" rel="noopener">“When Can I Retire? (Step 1 – Spending).”</a>
On the income side, it’s essential to quantify all your expected income sources and develop a strategy for <a href="https://www.theretirementmanifesto.com/how-to-determine-when-to-claim-social-security/" target="_blank" rel="noopener">when to claim Social Security</a>.  You’ll need to adopt an <a href="https://www.theretirementmanifesto.com/a-step-by-step-guide-to-your-annual-financial-update/" target="_blank" rel="noopener">Annual Financial Review</a> to ensure your investment withdrawals follow a methodology to stay within the limits of <a href="https://www.theretirementmanifesto.com/how-much-can-you-safely-spend-in-retirement/" target="_blank" rel="noopener">How Much You Can Safely Spend in Retirement.  </a>To see how I developed our Retirement Income Plan, check out <a href="https://www.theretirementmanifesto.com/28-when-can-i-retire-step-2-income/" target="_blank" rel="noopener">“When Can I Retire? (Step 2 – Income)”.</a>
Once you’ve mapped out the macro numbers, it’s important to develop a <a href="https://www.theretirementmanifesto.com/our-retirement-investment-drawdown-strategy/" target="_blank" rel="noopener">Drawdown Strategy</a>.  Which accounts will you draw from first?  How will you build <a href="https://www.theretirementmanifesto.com/how-to-build-a-retirement-paycheck/" target="_blank" rel="noopener">A Retirement Paycheck?</a>  Are you planning to do <a href="https://www.theretirementmanifesto.com/the-golden-age-of-roth-conversions/" target="_blank" rel="noopener">Roth Conversions?</a>  How will you build cash buffers to avoid overreacting in the next bear market?
Finally, it’s important that you lay out your cash flow plan over the duration of your retirement. 
In our case, I did it both<a href="https://www.theretirementmanifesto.com/36-when-can-i-retire-putting-it-all-together/" target="_blank" rel="noopener"> in a spreadsheet</a> and by using the software from <a href="https://go.boldin.com/retirementmanifesto" target="_blank" rel="noopener">Boldin</a> (Affiliate link), a tool I recommend for anyone approaching retirement and concerned about making their money last through their lifetime.  Using both methods, I projected our retirement cash flow to age 95 to give confidence that we wouldn’t outlive our money.
For a detailed Case Study that utilized this approach, check out <a href="https://www.theretirementmanifesto.com/from-food-stamps-to-fire-a-case-study-on-retirement-planning/" target="_blank" rel="noopener">“From Food Stamps To FIRE – A Case Study on Retirement Planning.”</a>
Yes, answering Question 1 will require a significant amount of time.
Having been through it myself, I can assure you that your peace of mind in retirement is worth it.
<hr>
<img loading="lazy" decoding="async" class="alignnone size-full wp-image-16561" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/09/crash-1308575_640.jpg" alt="" width="640" height="425" srcset="https://www.theretirementmanifesto.com/wp-content/uploads/2025/09/crash-1308575_640.jpg 640w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/09/crash-1308575_640-300x199.jpg 300w" sizes="auto, (max-width: 640px) 100vw, 640px" />
Question 2: Have You Accounted for Healthcare and Unexpected Costs?
 It’s never good when you need to replace your HVAC system unexpectedly, and yet unexpected costs are a reality of life.  How do we address these in our plan for retirement success?  Consider each of the following unexpected costs, and build them into your cashflow plan:
a) Healthcare Costs:  If you’re retiring before age 65, how are you going to cover your healthcare costs? Since we retired at age 55, we built in a hefty cushion in our spending estimate ($2,500/month, inflating at 5% annually) to cover our private health insurance.  Fortunately, our costs have come in below that level, and we’re pleased to have a “surprise to the good” instead of the other way around. Don’t forget to capture the expense of funding your HSA each year, if eligible (you must discontinue HSA contributions six months before applying to enroll in Medicare).  If you’re retiring at age 65 or later, how will you decide on which Medicare plan you should use? I recommend using<a href="https://switchers.askchapter.org/ntm/embed/simple-switchers?overridePhoneNumber=7755650284&utm_campaign=RM_MC_WE_DF_4O_US_H0_3U" target="_blank" rel="noopener"> Chapter</a> (Affiliate link) to help you choose <a href="https://www.theretirementmanifesto.com/how-to-choose-the-best-medicare-plan/" target="_blank" rel="noopener">“The Best Medicare Plan For You”</a>.  Healthcare costs are expensive, and it’s critical to ensure they are accurately reflected in your cash flow model.
b) Taxes:  Remember those Roth conversions you were considering?  Don’t forget that the incremental tax associated with those conversions needs to be accounted for, ideally using money from your taxable/brokerage accounts to maximize the money you’re able to convert (<a href="https://www.theretirementmanifesto.com/my-biggest-surprise-in-retirement/" target="_blank" rel="noopener">it’s surprising how expensive this can be)</a>.  For many, you’ll be making Quarterly Estimated Tax payments for the first time in your life, and you’ll get penalized if you underpay.  Talk with your CPA to ensure you get it right, or use the <a href="https://www.hrblock.com/tax-center/irs/tax-responsibilities/avoiding-underpayment-tax-penalty/" target="_blank" rel="noopener">Safe Harbor Rule</a> when establishing those quarterly payments.
c) Car Replacement & Maintenance Items: You’ve always had an emergency fund when you were working, right? How do we modify that strategy in retirement? In our case, I took a tip from the <a href="https://amzn.to/3V2HoRW" target="_blank" rel="noopener">WSJ Complete Retirement Guidebook</a> (Amazon Affiliate link) to determine a reasonable annual amount to set aside for unexpected emergencies, as summarized below:
<img loading="lazy" decoding="async" class="alignnone size-full wp-image-4484" src="https://www.theretirementmanifesto.com/wp-content/uploads/2017/06/Reserve.png" alt="" width="564" height="381" srcset="https://www.theretirementmanifesto.com/wp-content/uploads/2017/06/Reserve.png 564w, https://www.theretirementmanifesto.com/wp-content/uploads/2017/06/Reserve-300x203.png 300w" sizes="auto, (max-width: 564px) 100vw, 564px" />
Every year, we divert the first $12k of our Safe Withdrawal Rate to a standalone “Retirement Reserves” account in Capital One.  In the event any “unexpected” expenses come up during the year, we simply transfer money from that fund to our checking account to cover the bill.  So far, so good, and we’ve been fortunate that the reserve has been sufficient to meet any unexpected expenses through the first 7 years of our retirement.
d) Family Assistance / Charity:  Do you have parents or a child who may need your financial assistance during your retirement?  Don’t naively assume they’ll be fine and exclude them from your cash flow plan.  If there’s any possibility that you’ll be supporting someone you love, build it into your numbers.  If they don’t need it, you’ll have a surprise to the good, and that always beats the alternative.  Consider helping your children when they need it most, rather than making them wait for an inheritance.  It’s rewarding to see your children benefit from a much-needed boost, but also a delicate balance of independence vs. entitlement.  Think about what you want to do, and build in some buffer to allow yourself to help someone in need.  The same goes for charities.  Are you planning on tithing in retirement?  Is there a charity you’d like to help with ongoing support?  Build it into your numbers.
e) Inflation:  Way back in 2019, I wrote <a href="https://www.theretirementmanifesto.com/inflation-the-silent-killer-of-retirement/" target="_blank" rel="noopener">Inflation: The Silent Killer of Retirement.</a>  Inflation had been tame for years when I wrote that article, but it didn’t stay that way.  When you lay out your cash flow to age 95, add in an inflation adjustment by category to ensure you’re factoring it into your plans over time.  Make sure your portfolio is properly diversified and includes <a href="https://www.theretirementmanifesto.com/investment-options-to-protect-against-inflation/" target="_blank" rel="noopener">Investment Options To Protect Against Inflation</a>. Finally, make sure your spending estimate includes some discretionary spending that you can cut back on for a few years in the event of stagflation, or below-market returns combined with above-average inflation.
f) Long Term Care Expenses: We all face the risk of LTC expenses, and the only options we have to mitigate that risk are to either <a href="https://www.theretirementmanifesto.com/ltc-insurance-a-reader-responds/" target="_blank" rel="noopener">buy LTC insurance</a> or <a href="https://www.theretirementmanifesto.com/why-we-arent-buying-long-term-care-insurance/" target="_blank" rel="noopener">choose to self-insure</a> (note: if you don’t make a decision, you ARE choosing to self-insure).  If you’ve decided to buy insurance, it’s simple to capture those in your cash flow model.  Self-insurance is less obvious.  If you’d like to capture this expense, I’d suggest you consider subtracting the <a href="https://howmuchcaniaffordtospendinretirement.blogspot.com/2025/09/self-insuring-your-long-term-care-what.html?m=1" target="_blank" rel="noopener">present value of your future LTC costs</a> from your Net Worth when calculating your Safe Withdrawal rate.  Alternatively, you could hold investments to cover your potential LTC costs in a separate account, then exclude those when calculating your SWR.  Either way, make sure you’ve thought about your risk of LTC expenses and factored them into your plan.
<hr>
<figure id="attachment_16562" aria-describedby="caption-attachment-16562" style="width: 750px" class="wp-caption alignnone"><img loading="lazy" decoding="async" class="size-full wp-image-16562" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/09/Screenshot_20250829_122903_Photos-e1757103051837.jpg" alt="" width="750" height="467"><figcaption id="caption-attachment-16562" class="wp-caption-text">A recent Freedom For Fido fence build (I’m 2nd from L, my wife is in the green sweatshirt).</figcaption></figure>
Question 3: How Will You Spend Your Time And Stay Fulfilled?
A common mistake many folks make when planning for retirement is to focus primarily on the financial issues.  Money is “only” a tool, and most folks find that achieving their financial goal doesn’t, in and of itself, lead to happiness in life (did you know retirement <a href="https://www.theretirementmanifesto.com/will-retirement-be-depressing/" target="_blank" rel="noopener">increases the probability of depression by 40%?</a>).  Your challenge, as you approach retirement, is to decide what type of life you want to build for yourself in retirement, then use your financial resources to help you achieve the life that brings true contentment.
Successful retirees have learned that the non-financial elements are critically important and should be addressed with the same rigor as the financial elements. When you retire, you’re not only losing your paycheck.  You’re also losing the following benefits from work, and you WILL struggle if you haven’t considered how you’ll replace them:
<ul>
<li>Purpose</li>
<li>Structure</li>
<li>Identity</li>
<li>Relationships</li>
<li>Achievement</li>
</ul>
As I was approaching retirement, I was curious why some retirees had a smooth transition, whereas others struggled (<a href="https://www.theretirementmanifesto.com/shining-the-light-on-retirement-blind-spots/" target="_blank" rel="noopener">only 32% of retirees reported a smooth transition</a>).  Based on my research, I discovered the most significant <a href="https://www.theretirementmanifesto.com/why-72-of-retirees-are-happy/" target="_blank" rel="noopener">differentiators between happy vs. unhappy retirees.</a>  There is a direct correlation between how much planning a person does before retirement (including the non-financial elements) and the resulting transition.  The more time you spend thinking about the non-financial elements, the smoother your transition will be.
I’ve written dozens of articles on the topic, and it’s the primary focus of<a href="https://www.theretirementmanifesto.com/my-book/" target="_blank" rel="noopener"> my book</a>.  I struggle to boil the entire topic down to a summary, so I’ve decided to include a bullet list of relevant articles.  If you take nothing else away from this article, please recognize the importance of answering Question 3 before you retire.
Your homework assignment:  Pick at least two of the following articles and read them as you prepare to answer this critical question for yourself:
<ul>
<li><a href="https://www.theretirementmanifesto.com/the-4-phases-of-retirement/" target="_blank" rel="noopener">The 4 Phases of Retirement</a></li>
<li><a href="https://www.theretirementmanifesto.com/introducing-the-90-10-rule-of-retirement/" target="_blank" rel="noopener">Introducing The 90/10 Rule of Retirement</a></li>
<li><a href="https://www.theretirementmanifesto.com/freedom-for-fido-a-story-of-finding-purpose-in-retirement/" target="_blank" rel="noopener">Freedom For Fido – A Story of Finding Purpose in Retirement</a></li>
<li><a href="https://www.theretirementmanifesto.com/i-am-rich-and-have-no-idea-what-to-do-with-my-life/" target="_blank" rel="noopener">I Am Rich And Have No Idea What To Do With My Life</a></li>
<li><a href="https://www.theretirementmanifesto.com/the-ten-commandments-of-retirement/" target="_blank" rel="noopener">The 10 Commandments of Retirement</a></li>
<li><a href="https://www.theretirementmanifesto.com/shining-the-light-on-retirement-blind-spots/" target="_blank" rel="noopener">Shining The Light on Retirement Blind Spots</a></li>
<li><a href="https://www.theretirementmanifesto.com/7-hidden-traps-of-retirement/" target="_blank" rel="noopener">7 Hidden Traps of Retirement</a></li>
<li><a style="font-size: 1rem;" href="https://www.theretirementmanifesto.com/purpose-motivation-and-life-in-cold-water/" target="_blank" rel="noopener">Purpose, Motivation, and Life Aspirations</a></li>
<li><a href="https://www.theretirementmanifesto.com/3-levels-of-retirement-readiness-where-do-you-stand/" target="_blank" rel="noopener">3 Levels of Retirement Readiness: Where Do You Stand</a></li>
</ul>
<hr>
Conclusion
In summary, the three questions you must answer before you choose to retire:
1) Do You Have A Reliable Cash Flow Plan?
2) Have You Accounted for Healthcare and Unexpected Costs?
3) How Will You Spend Your Time And Stay Fulfilled?
Will these three questions really determine 99% of your retirement success?  Who knows (it did catch your attention, though, right?).  Regardless of the actual percentage, there’s no doubt in my mind that these are the right questions to ask as you approach retirement (I think my old boss would be proud  <img src="https://s.w.org/images/core/emoji/16.0.1/72x72/1f609.png" alt="😉" class="wp-smiley" style="height: 1em; max-height: 1em;" />).
More important than the questions are your answers.  If you’re not comfortable answering them yourself, this is one area where it pays to hire an expert to help.
Spend the necessary time to answer the questions well.  
Your retirement success is riding on it.
<hr>
Your Turn:  If you’re already retired, what other question would you encourage a soon-to-be retiree to ask themself?  In hindsight, which of these questions are most important?  If you’re not yet retired, which question concerns you the most?  Let’s chat in the comments…
The post <a href="https://www.theretirementmanifesto.com/retirement-success/">3 Questions That Determine 99% of Your Retirement Success</a> appeared first on <a href="https://www.theretirementmanifesto.com">The Retirement Manifesto</a>.
]]></content:encoded>
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<post-id xmlns="com-wordpress:feed-additions:1">16171</post-id> </item>
<item>
<title>Why My Airbnb Lost Money…and Still Felt Like a Win</title>
<link>https://www.theretirementmanifesto.com/why-my-airbnb-lost-money-and-still-felt-like-a-win/?utm_source=rss&utm_medium=rss&utm_campaign=why-my-airbnb-lost-money-and-still-felt-like-a-win</link>
<comments>https://www.theretirementmanifesto.com/why-my-airbnb-lost-money-and-still-felt-like-a-win/#comments</comments>
<dc:creator><![CDATA[Dana Anspach]]></dc:creator>
<pubDate>Thu, 04 Sep 2025 08:24:36 +0000</pubDate>
<category><![CDATA[Investments]]></category>
<category><![CDATA[financial planning]]></category>
<category><![CDATA[investments]]></category>
<category><![CDATA[objectives]]></category>
<guid isPermaLink="false">https://www.theretirementmanifesto.com/?p=16525</guid>
<description><![CDATA[I moved to Arizona on August 1, 2001, and spent the next four years working with various CPA firms across the Phoenix and Scottsdale area. At one of those firms, […]
The post <a href="https://www.theretirementmanifesto.com/why-my-airbnb-lost-money-and-still-felt-like-a-win/">Why My Airbnb Lost Money…and Still Felt Like a Win</a> appeared first on <a href="https://www.theretirementmanifesto.com">The Retirement Manifesto</a>.
]]></description>
<content:encoded><![CDATA[I moved to Arizona on August 1, 2001, and spent the next four years working with various CPA firms across the Phoenix and Scottsdale area.
At one of those firms, I saw my first tax return with more than a million dollars of income. The Suttons (not their real name) owned commercial properties across the city. This was the first of many wealthy families I met who secured their fortunes through real estate.
I found real estate investing intriguing. Clearly, it could be lucrative. But aside from owning my home, I never pursued it. The late-night infomercials promising passive income looked glamorous, but from where I sat, real estate success seemed to take full-time effort, expertise, and a dash of luck.
In the fall of 2022, an opportunity emerged. I put my home of sixteen years on Airbnb.
I didn’t do it with visions of striking it rich. My reason was much simpler.
Here’s the story of my second year owning an Airbnb.
<hr />I turned my property into an AirBnB and lost money. I still consider it a win. Here's why... <a href='https://twitter.com/intent/tweet?url=https%3A%2F%2Fwww.theretirementmanifesto.com%2Fwhy-my-airbnb-lost-money-and-still-felt-like-a-win%2F&text=I%20turned%20my%20property%20into%20an%20AirBnB%20and%20lost%20money.%20I%20still%20consider%20it%20a%20win.%20Here%27s%20why...&via=retiremanifesto&related=retiremanifesto' target='_blank' rel="noopener noreferrer" >Share on X</a> <hr />
<img loading="lazy" decoding="async" class="alignnone size-full wp-image-16536" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/09/Screenshot-2025-09-02-1.50.10-PM.png" alt="" width="443" height="666" srcset="https://www.theretirementmanifesto.com/wp-content/uploads/2025/09/Screenshot-2025-09-02-1.50.10-PM.png 443w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/09/Screenshot-2025-09-02-1.50.10-PM-200x300.png 200w" sizes="auto, (max-width: 443px) 100vw, 443px" />
<h1>Why My AirBnB Lost Money…And Still Felt Like A Win</h1>
I turned the house into a rental for one reason: flexibility. With one move, I could cover both a downside risk and an upside option.
As I explain in <a href="https://medium.com/@moneyover55/my-first-year-owning-an-airbnb-property-d49750c423fc" target="_blank" rel="noopener">My First Year Owning an Airbnb Property</a>, at the time, I was in a new relationship. If it didn’t work out, I needed a fallback plan. Having a home to move back to offered me downside protection.
Luckily, it’s the upside option we’re leveraging. My husband and I bought a new home, which we knew would require a major remodel. When that time came, we’d need a place to live.
I’ve watched clients shuffle between rentals, hotels, and storage sheds when construction dragged on. I knew that wouldn’t work for me—not while running a business. Stability at home preserves my energy for everything else.
If we kept the old house, whether it made money or not, the flexibility would be priceless.
So here was the plan: Rent the old house on Airbnb while living in the new house for a few years, using that time to build up cash reserves and devise a remodel plan. Once the remodel plan began, we’d turn off the Airbnb calendar and move back in. No leases, no scrambling for dog-friendly rentals, no stress if the project ran long.
That kind of peace of mind feels like biting into a cool peppermint patty.
<img loading="lazy" decoding="async" class="alignnone size-full wp-image-16538" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/09/chocolate-2202154_640.jpg" alt="" width="640" height="179" srcset="https://www.theretirementmanifesto.com/wp-content/uploads/2025/09/chocolate-2202154_640.jpg 640w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/09/chocolate-2202154_640-300x84.jpg 300w" sizes="auto, (max-width: 640px) 100vw, 640px" />
<hr>
<h2>Expertise</h2>
In order to make the plan work, I needed someone with expertise.
Of course, peace of mind only goes so far—you also need know-how.
My brother had been running Airbnb’s for more than a decade. Me? I’d rented a few on vacations.
So I asked him to help. For a percentage of the rental income, he flew out, set up the property, created the listing, handled pricing, guest communications, and most repairs.
Most importantly, he became a voice of calm reason.
He told me what it would take to become a “superhost” and assured me year two would be better than year one. He was right.
Looking back, he did for me exactly what I do for clients: guided me through unfamiliar decisions, set clear expectations, handled the details, and kept me from making too many costly mistakes.
Could I have squeezed out more cash flow doing it myself? I doubt it. Without the time or expertise, I wouldn’t have had the same occupancy, the same great reviews, and certainly not the same level of sanity.
All that being said, do I have passive income… or any income at all?
<hr>
<h2>4 Ways of Measuring Earnings</h2>
Whether you call it income, earnings, or wealth-building, real estate has multiple dimensions. I break mine into four buckets: cash flow, effort, net worth impact, and taxes.
<h3>1. Cash Flow</h3>
In year one, total outgoing cash exceeded incoming cash by more than $18,000 thanks to two hefty repairs (a new pool pump and a major roof repair) and one mistake (installing a pool heater).
In year two, cash flow turned positive at $1,476. I’ve shared the numbers in the figure below.
Looking at year two numbers, leveraged real estate shows its appeal: someone else helps pay for the asset.
<a href="https://www.theretirementmanifesto.com/wp-content/uploads/2025/09/Airbnb_rental_income.png"><img loading="lazy" decoding="async" class="aligncenter size-full wp-image-16526" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/09/Airbnb_rental_income.png" alt="" width="356" height="527" srcset="https://www.theretirementmanifesto.com/wp-content/uploads/2025/09/Airbnb_rental_income.png 356w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/09/Airbnb_rental_income-203x300.png 203w" sizes="auto, (max-width: 356px) 100vw, 356px" /></a>
<h3>2. Effort</h3>
How much effort did those results require?
Even with my brother handling most of it, Airbnb takes work. Guests call about TVs. Neighbors text about sprinklers. I haul trash bins, pay invoices, and organize records at tax time. One guest asked us to come by to change a light bulb. Others want more hangers.
Passive? Not by my definition. With a robust portfolio and a full-time property manager, sure, then I’d call it passive.
<h3>3. Net Worth Impact</h3>
In years one and two, $9,815 and $7,845 of the cash flow paid down principal—this adds to wealth. (I accidentally made an extra payment in 2023, which is why more principal was paid in 2023 than in 2024. At a 2.75% mortgage rate, paying it down faster was not my goal. In transferring payments to occur from a business account, I neglected to stop the personal payment in time.)
As far as overall asset value, the property’s value dipped from the prior year. We’re not selling yet, so I don’t worry about short-term fluctuations. However, values could decline further before our timeline comes to fruition. There are no guarantees that the property will rise in value during our holding period.
<h3>4. Tax Impact</h3>
Here’s where it gets interesting. 
Even though the 2024 cash flow was positive, in addition to cash expenses, you also deduct depreciation, which allows you to claim a dollar amount to recognize wear and tear on a tangible asset. This is all reported on tax form Schedule E and resulted in a net loss of $6,560 for the year.
Can I deduct that loss? It depends. Three key concepts are at play: real estate professional status, the MAGI-based special allowance for non-professionals, and the passive activity rules.
Note: If you want to study real estate taxation, the book <a href="https://amzn.to/4nc4Yrx" target="_blank" rel="noopener">Advanced Tax Strategies, Cracking the Code for Savvy Real Estate Investors</a> (Amazon Affiliate Link) will help. My copy is tagged with color-coded mini sticky notes.
<a href="https://www.theretirementmanifesto.com/wp-content/uploads/2025/09/AdvancedTaxStrategiesforSavvyRealEstateInvestors-rotated.jpg"><img loading="lazy" decoding="async" class="alignnone wp-image-16527 size-full" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/09/AdvancedTaxStrategiesforSavvyRealEstateInvestors-rotated-e1756836170264.jpg" alt="" width="550" height="734"></a>
I’ll cover the nuts and bolts of the three factors to determine if the loss is tax-deductible.
<h3>1) Real Estate Professional Status</h3>
If you qualify as a real estate professional, rental losses are active and can offset wages and other active income.
It’s tough to qualify if you already have a full-time non-real estate career, but it can work for couples where one spouse devotes substantial time to the rentals, while the other maintains high W-2 or active business income. In our household, we both have full-time, non-real-estate careers, so this status doesn’t apply.
<h3>2) Special $25,000 Allowance (for Non-Professionals)</h3>
If you don’t qualify as a real estate professional, your ability to deduct rental losses against other income phases out as Modified Adjusted Gross Income (MAGI) rises:
<ul>
<li>$100,000 or less MAGI: up to $25,000 deductible</li>
<li>$100,001–$150,000: reduced by 50% of MAGI over $100,000</li>
<li>Over $150,000: special allowance eliminated</li>
</ul>
Our income is too high, so this allowance doesn’t help us either.
<h3>3) Passive Activity Rules</h3>
Since neither of the first two provisions applies, we move on to the passive activity rules.
Here’s how they work:
<ul>
<li>Passive Losses and Income Matching:
<ul style="list-style-type: square;">
<li>The IRS categorizes income and losses as either passive or non-passive. Passive losses can only offset passive income (not earned income or portfolio income like interest or dividends).</li>
<li>Royalty income is usually considered passive if the taxpayer does not materially participate in the activity (such as royalties from a book or mineral rights where the taxpayer isn’t actively involved in development or promotion).</li>
</ul>
</li>
</ul>
<ul>
<li>Passive Activity Grouping:
<ul style="list-style-type: square;">
<li>Losses and income don’t have to come from the same property to offset one another, unless you’ve made a formal grouping election that says otherwise.</li>
</ul>
</li>
</ul>
<ul>
<li>Loss Carryforward:
<ul style="list-style-type: square;">
<li>Unused passive losses carry forward indefinitely until you have passive income or dispose of the activity.</li>
</ul>
</li>
</ul>
<ul>
<li>Disposition Exception:
<ul style="list-style-type: square;">
<li>If you sell your entire interest in a passive activity in a taxable sale to an unrelated party, it unlocks suspended losses, and they can offset income – regardless of how that income is characterized.</li>
</ul>
</li>
</ul>
Short-term rental nuance: if your average booking is 7 days or less and you materially participate, that activity may be non-passive, which can allow losses to offset active income. Best to talk with your tax professional to determine if this applies.
<h3>How This Works for Us</h3>
Our rental is passive, but I have passive royalty income from my books and courses. In 2024, those royalties nearly equaled our rental loss, so the two offset each other. Prior-year passive losses are still being carried forward.
Technically, I could calculate the resulting tax savings and add that to my cash flow analysis. It would add a few thousand.
<hr>
<h2><img loading="lazy" decoding="async" class="alignnone size-full wp-image-16540" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/09/house-for-sale-2845213_640-e1756836525235.jpg" alt="" width="500" height="500"></h2>
<h2>What Happens Upon Sale?</h2>
That disposition exception can be a powerful tool for high earners when pairing the transaction with a high-income year. Passive losses that have been carried forward unlock at sale and offset income taxed at your marginal rate.
For retirees with carry-forward passive losses and large IRAs, unlocking losses in the RMD years (beginning at age 73–75, depending on birth year) could be more valuable than doing so earlier, as your tax rate may be higher. Or you might time a sale with a Roth conversion.
Caveat: not all “unlocked” losses offset at the top rate. Depreciation taken along the way is subject to recapture (generally, up to a 25% tax rate applies), and there are additional nuances. So, it is not quite as simple as saying all losses offset income at the highest rate. But then it never is simple when it comes to taxes, is it?
<h3>Our Plan</h3>
We expect to move back into the Airbnb in 2026 during our rebuild, then sell it in 2027. That sale should unlock accumulated passive losses while our marginal rate is high.
That leaves us one last item to navigate: the home-sale gain exclusion rules.
<hr>
<h2>Primary Residence Gain Exclusion Rules</h2>
When you sell a primary residence, you can exclude capital gains from taxation up to $250,000 as a single filer, and $500,000 as a married-joint filer, if certain tests are met.  At time of sale, you must have owned and lived in the home for two out of the previous five years, and you can’t have used the exclusion in the prior two years. Only one spouse needs to meet the ownership test, but both must meet the use test.
<ul>
<li>I meet the ownership test.</li>
<li>We both lived in the house in 2022, although we weren’t yet married, and we will live there again as a married couple in 2026.</li>
</ul>
However, the years we had it as a rental are a “non-qualified use” and there will be a pro-rata calculation to account for those.  For example, if we rented itl three out of the ten years prior to sale, 3/10 of the normal gain exclusion would be taxable. In this example, instead of a $500,000 gain exclusion (which would apply as we are married and filing jointly at the time of sale), because of the rental years, we may get $350,000 of gain exclusion. We’ll be running all this through our CPA, of course.
After accounting for capital gain exclusion, you then recapture depreciation, followed by suspended passive losses offsetting other forms of income. 
<hr>
<h2>Rental Real Estate for Retirement</h2>
Would I rely on this property, or something similar, for steady retirement income?
No. 
The cash flow is unpredictable. I don’t want a varying paycheck in retirement, let alone one that may at times require me to put money back in.
As a wealth-builder, real estate can be great. As a retirement paycheck for the average, non-professional investor? I find the cash flow too lumpy for comfort.
<h3>My Goals</h3>
We all invest for different reasons. It gets confusing when goals are fuzzy. It works best if each investment has a clear job description.
For my Airbnb, the job description was crystal clear: provide flexibility and peace of mind. It’s doing that job beautifully. The freedom to move back on our timeline and start our project without scrambling is priceless.
Flexibility is a valuable feature. 
Not every decision is about maximizing returns. Maximizing life satisfaction and ease of transitions matters too. By that measure, this rental has been a win.
<h3>What about you?</h3>
Have you owned rental real estate? What were your goals, and how did it work out? We’d love to hear your experiences in the comments below.
The post <a href="https://www.theretirementmanifesto.com/why-my-airbnb-lost-money-and-still-felt-like-a-win/">Why My Airbnb Lost Money…and Still Felt Like a Win</a> appeared first on <a href="https://www.theretirementmanifesto.com">The Retirement Manifesto</a>.
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<post-id xmlns="com-wordpress:feed-additions:1">16525</post-id> </item>
<item>
<title>Traveling In The Arctic</title>
<link>https://www.theretirementmanifesto.com/traveling-in-the-arctic/?utm_source=rss&utm_medium=rss&utm_campaign=traveling-in-the-arctic</link>
<comments>https://www.theretirementmanifesto.com/traveling-in-the-arctic/#comments</comments>
<dc:creator><![CDATA[Fritz Gilbert]]></dc:creator>
<pubDate>Thu, 28 Aug 2025 08:00:17 +0000</pubDate>
<category><![CDATA[Retirement]]></category>
<category><![CDATA[carpe diem]]></category>
<category><![CDATA[Inspiration]]></category>
<category><![CDATA[Just Do It]]></category>
<category><![CDATA[retirement activities]]></category>
<guid isPermaLink="false">https://www.theretirementmanifesto.com/?p=16443</guid>
<description><![CDATA[It was a spontaneous decision. “Let’s Go To The Arctic!” My wife and I were on our way home last summer from a Disney Cruise we took with our daughter […]
The post <a href="https://www.theretirementmanifesto.com/traveling-in-the-arctic/">Traveling In The Arctic</a> appeared first on <a href="https://www.theretirementmanifesto.com">The Retirement Manifesto</a>.
]]></description>
<content:encoded><![CDATA[It was a spontaneous decision.
“Let’s Go To The Arctic!”
My wife and I were on our way home last summer from a Disney Cruise we took with our daughter and granddaughter.  The cruise was great, but the cacophony of excited children grated a bit on our aging nerves.  As we were driving home, we discussed our mutual desire for a vacation “Just For Us.”  We realized we both had the same desire to spend some time above the Arctic Circle. 
After a few weeks of research, we booked a <a href="https://www.vikingcruises.com/" target="_blank" rel="noopener">Viking Cruise</a> for August 2025 (they don’t allow children on their cruises).  The “Expedition Cruise” took place on a polar-rated ship and spent 2 weeks above the Arctic Circle, along the coast of Greenland, and into the Northwest Passage. Here’s an overview of the cruise route:
<img loading="lazy" decoding="async" class="alignnone wp-image-16448 size-full" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/Screenshot_20250725_103133_Gmail-e1756137104150.jpg" alt="" width="500" height="515">
We just got home from the cruise.  It was one of the best vacations we’ve ever taken.
Today, I’ll tell you about it.  And…I’ll share a lot of photos.
Hint:  Yes, we saw polar bears.
<hr />We just got back from 2 weeks above the Arctic Circle. Want to see what it looks like? <a href='https://twitter.com/intent/tweet?url=https%3A%2F%2Fwww.theretirementmanifesto.com%2Ftraveling-in-the-arctic%2F&text=We%20just%20got%20back%20from%202%20weeks%20above%20the%20Arctic%20Circle.%20Want%20to%20see%20what%20it%20looks%20like%3F&via=retiremanifesto&related=retiremanifesto' target='_blank' rel="noopener noreferrer" >Share on X</a> <hr />
<hr>
<figure id="attachment_16478" aria-describedby="caption-attachment-16478" style="width: 440px" class="wp-caption alignnone"><img loading="lazy" decoding="async" class="size-full wp-image-16478" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/Screenshot-2025-08-26-2.21.46-PM.png" alt="" width="440" height="668" srcset="https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/Screenshot-2025-08-26-2.21.46-PM.png 440w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/Screenshot-2025-08-26-2.21.46-PM-198x300.png 198w" sizes="auto, (max-width: 440px) 100vw, 440px" /><figcaption id="caption-attachment-16478" class="wp-caption-text">Standing at the entrance to The Northwest Passage</figcaption></figure>
<hr>
<h1>Traveling in The Arctic</h1>
It isn’t easy to get to Greenland.
While the capital city of <a href="https://en.wikipedia.org/wiki/Nuuk" target="_blank" rel="noopener">Nuuk</a> recently expanded its runway to 6,600 feet in length (allowing international jets to land), there are very few flights from the USA.  To accommodate the 300+ passengers on our cruise, Viking hired a Charter jumbo jet to fly us all directly from NYC, along with all of the supplies necessary for our voyage (we had marvelous fresh fruit and sushi throughout our trip).  An interesting and efficient solution to a difficult-to-service embarkation port.  We all flew into NYC, were transported to a nearby hotel for the evening, and set our alarms for 2:15 a.m. to catch our early morning departure to Greenland.
Nuuk was fogged in.
As we approached Nuuk after our 4-hour flight from NYC, we were advised that Nuuk was fogged in and we would have to divert 200 miles to Kangerlussuaq Airport, originally an air force base and one of the only runways in Greenland long enough to land our plane.  After sitting on the ground for 3+ hours, we resumed our journey, landed in Nuuk, and were transported to the ship via bus.
In total, it was 30 hours door-to-door.
It isn’t easy to get to Greenland. 
In spite of that, it’s an amazing country and well worth a visit.  I expect you’ll see a surge of cruises working out of Nuuk in the coming years, and an increase in commercial airline traffic to support the growing tourism industry.  FYI, Greenland is a huge country, as illustrated by this overlay on the USA:
<img loading="lazy" decoding="async" class="alignnone size-full wp-image-16498" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/6142204693326192979-e1756236893342.jpg" alt="" width="600" height="315">
Below are highlights from the trip, starting with the vessel we traveled on:
<hr>
The Ship
<figure id="attachment_16467" aria-describedby="caption-attachment-16467" style="width: 750px" class="wp-caption alignnone"><img loading="lazy" decoding="async" class="wp-image-16467 size-full" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/20250813_103340-1-scaled-e1756230466498.jpg" alt="" width="750" height="468"><figcaption id="caption-attachment-16467" class="wp-caption-text">The Viking Octantis</figcaption></figure>
The <a href="https://www.vikingcruises.com/expeditions/ships/viking-octantis.html" target="_blank" rel="noopener">Viking Octantis </a>is a 665 ft long Polar Class 6 vessel, designed for travel in polar regions.  In the winter, it travels to Antarctica, across the infamous Drake Passage.  She’s tough, but designed for luxury travel.  My favorite part of the ship is The Aula auditorium, an engineering marvel with retractable screens that reveal an amazing 270-degree view of the waters behind the ship.  Throughout the trip, we enjoyed lectures from polar experts, Inuit “Cultural Ambassadors,” and daily briefings on our upcoming ports of interest.
<figure id="attachment_16465" aria-describedby="caption-attachment-16465" style="width: 550px" class="wp-caption alignnone"><img loading="lazy" decoding="async" class="size-full wp-image-16465" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/Screenshot-2025-08-26-1.36.14-PM-e1756229841295.png" alt="" width="550" height="533"><figcaption id="caption-attachment-16465" class="wp-caption-text">The Aula (photo & description courtesy of Viking website)</figcaption></figure>
<hr>
We were allowed to tour the bridge of the Octantis, a modern-day wonder of technology for travel in some of the world’s most dangerous waters:
<figure id="attachment_16490" aria-describedby="caption-attachment-16490" style="width: 650px" class="wp-caption alignnone"><img loading="lazy" decoding="async" class="wp-image-16490 size-full" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/20250820_121948-scaled-e1756235323597.jpg" alt="" width="650" height="488"><figcaption id="caption-attachment-16490" class="wp-caption-text">The bridge of The Octantis</figcaption></figure>
<hr>
The Toys
The ship also carries all of her own “toys”, including kayaks, Zodiacs, two submarines, and Special Operations Boats to transport and entertain guests in the various locations we visited. We toured “The Hanger” during the cruise, and were in awe of the thinking that went into its design.  
<figure id="attachment_16482" aria-describedby="caption-attachment-16482" style="width: 629px" class="wp-caption alignnone"><img loading="lazy" decoding="async" class="size-full wp-image-16482" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/Screenshot-2025-08-26-1.55.20-PM.png" alt="" width="629" height="499" srcset="https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/Screenshot-2025-08-26-1.55.20-PM.png 629w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/Screenshot-2025-08-26-1.55.20-PM-300x238.png 300w" sizes="auto, (max-width: 629px) 100vw, 629px" /><figcaption id="caption-attachment-16482" class="wp-caption-text">The Hanger where all the toys live.</figcaption></figure>
<figure id="attachment_16468" aria-describedby="caption-attachment-16468" style="width: 700px" class="wp-caption alignnone"><img loading="lazy" decoding="async" class="size-full wp-image-16468" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/20250812_112156-scaled-e1756230604700.jpg" alt="" width="700" height="318"><figcaption id="caption-attachment-16468" class="wp-caption-text">My wife and I kayaking above The Arctic Circle.</figcaption></figure>
<figure id="attachment_16469" aria-describedby="caption-attachment-16469" style="width: 450px" class="wp-caption alignnone"><img loading="lazy" decoding="async" class="wp-image-16469 size-full" style="font-weight: bold; font-size: 1rem;" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/20250812_070635-1-scaled-e1756230698445.jpg" alt="" width="450" height="504" srcset="https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/20250812_070635-1-scaled-e1756230698445.jpg 450w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/20250812_070635-1-scaled-e1756230698445-268x300.jpg 268w" sizes="auto, (max-width: 450px) 100vw, 450px" /><figcaption id="caption-attachment-16469" class="wp-caption-text">My wife on a Zodiac as we entered Sismiut, Greenland</figcaption></figure>
<hr>
The Inuit – Indigenous People of The Arctic
<figure id="attachment_16470" aria-describedby="caption-attachment-16470" style="width: 650px" class="wp-caption alignnone"><img loading="lazy" decoding="async" class="size-full wp-image-16470" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/original_02fd1401-ad7c-44fd-a6f2-bca55442d866_20250813_070522-e1756230944907.jpg" alt="" width="650" height="602"><figcaption id="caption-attachment-16470" class="wp-caption-text">Inuit elders in traditional dress (note the sealskin boots)</figcaption></figure>
One of my unexpected pleasures of the trip was learning about the<a href="https://en.wikipedia.org/wiki/Inuit" target="_blank" rel="noopener"> Inuit </a>culture (they’re not called Eskimos anymore). These are rugged people who live in one of the most inhospitable parts of the world, and comprise the vast majority of the local population (there are 57,000 people in Greenland, about 12% of whom are Danish). In addition to presentations from the Cultural Ambassadors aboard the ship (one of whom was a local high school teacher on her summer break), we were greeted warmly by the Elders in several of the fishing villages we visited on our cruise.
In addition to performing local songs and dances, the elders displayed traditional attire, explained a bit about their culture, and answered every question asked by the curious tourists. In one town, they demonstrated local sporting competitions, which included fascinating techniques of kicking a piece of bone hanging at various heights from a rope. They’re a very soft-spoken people, often assumed to be shy due to their soft voices and focus on communal (versus individual) needs.  Theirs is primarily a subsistence hunting culture, though they welcome the growth of tourism and view it as a means to educate outsiders about their unique lifestyle (not to mention the economic boost to their local economy).
Greenlandic homes are colorful, as illustrated in this photo from Sismiut:
<figure id="attachment_16488" aria-describedby="caption-attachment-16488" style="width: 600px" class="wp-caption alignnone"><img loading="lazy" decoding="async" class="size-full wp-image-16488" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/20250821_112150-scaled-e1756235028765.jpg" alt="" width="600" height="800"><figcaption id="caption-attachment-16488" class="wp-caption-text">The colorful homes of Sismiut, Greenland</figcaption></figure>
In one village, we were invited into an individual’s home for “Kappemik” (local coffee and danishes, baked by the women of the community before our arrival).  It was fascinating to spend time inside a “local’s” home, and imagine what their life must be like in such remote communities far above the Arctic Circle. 
Hint: The Inuit don’t like their pictures being taken, so always ask for permission first (the elders in the photo above invited us to take that picture, it’s the only picture of Inuit I took the entire trip)
<hr>
The Scenery
It’s hard to describe how wild Greenland and Nunavut, the Northernmost province of Canada, really are.  The western coast of Greenland is the most beautiful coastline I’ve ever seen.  With 80% of the country covered by an ice sheet, I can only imagine how remote and wild the interior is. There are over 150 named fjords in Greenland (and countless unnamed ones), most of which terminate with a glacier.  Here’s one example:
<figure id="attachment_16484" aria-describedby="caption-attachment-16484" style="width: 750px" class="wp-caption alignnone"><img loading="lazy" decoding="async" class="size-full wp-image-16484" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/20250811_121431-scaled-e1756234096520.jpg" alt="" width="750" height="563"><figcaption id="caption-attachment-16484" class="wp-caption-text">A Greenland glacier (note Zodiacs in the foreground)</figcaption></figure>
The town of Ilulissat (which in Inuit means “Iceberg”) sits where the  <a href="https://en.wikipedia.org/wiki/Ilulissat_Icefjord" target="_blank" rel="noopener">Ilulissat Icefjord</a> (a UNESCO World Heritage Site) runs from the interior ice field to the sea.  A bit of trivia – the iceberg that sank the Titantic was deposited in the sea from this icefjord.  I can’t even begin to describe the scale of the icefjord – note the people in the bottom of this picture for scale:
<figure id="attachment_16485" aria-describedby="caption-attachment-16485" style="width: 550px" class="wp-caption alignnone"><img loading="lazy" decoding="async" class="size-full wp-image-16485" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/20250813_091907-scaled-e1756234486659.jpg" alt="" width="550" height="733"><figcaption id="caption-attachment-16485" class="wp-caption-text">The Ilulissat Icefjord (note people at bottom for scale)</figcaption></figure>
I took a 5-mile hike from the town to an awe-inspiring overlook of the icefjord.  It was worth every step:
<figure id="attachment_16486" aria-describedby="caption-attachment-16486" style="width: 600px" class="wp-caption alignnone"><img loading="lazy" decoding="async" class="wp-image-16486 size-full" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/20250813_084051-scaled-e1756234663509.jpg" alt="" width="600" height="800"><figcaption id="caption-attachment-16486" class="wp-caption-text">A rock cairn marks the trail along the icefjord</figcaption></figure>
<hr>
The Entrance To The Northwest Passage
After a week cruising the western shore of Greenland, we were excited to enter the infamous Northwest Passage, where we spent the second half of our journey.  No article about traveling in the Arctic would be complete without a photo showing the entrance to the famous waters in the Canadian province of Nunavut:
<figure id="attachment_16500" aria-describedby="caption-attachment-16500" style="width: 800px" class="wp-caption alignnone"><img loading="lazy" decoding="async" class="wp-image-16500 size-full" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/20250816_180122-1-scaled-e1756237547626.jpg" alt="" width="800" height="471" srcset="https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/20250816_180122-1-scaled-e1756237547626.jpg 800w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/20250816_180122-1-scaled-e1756237547626-300x177.jpg 300w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/20250816_180122-1-scaled-e1756237547626-768x452.jpg 768w" sizes="auto, (max-width: 800px) 100vw, 800px" /><figcaption id="caption-attachment-16500" class="wp-caption-text">The entrance to the Northwest Passage.</figcaption></figure>
<hr>
The Furthest Point North – Beechey Island
One of the highlights of the trip was a visit to Beechey Island, 562 miles above the Arctic Circle (for the record, it’s at 74.7° North and has 6 weeks of 24-hour daylight).  Sadly, it’s also the final resting place for three members of the failed <a href="https://en.wikipedia.org/wiki/Franklin%27s_lost_expedition" target="_blank" rel="noopener">Franklin Expedition</a> in 1845*.  This map gives you a sense of how far North we were:
<img loading="lazy" decoding="async" class="alignnone size-full wp-image-16493" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/Screenshot_20250704-155007-e1756236198528.png" alt="" width="600" height="508">
<div>Here are a few photos from Beechey Island:</div>
<div> </div>
<div dir="auto">
<figure id="attachment_16494" aria-describedby="caption-attachment-16494" style="width: 650px" class="wp-caption alignnone"><img loading="lazy" decoding="async" class="size-full wp-image-16494" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/20250818_055300-scaled-e1756236311620.jpg" alt="" width="650" height="488"><figcaption id="caption-attachment-16494" class="wp-caption-text">The desolate (and cold, windy) shores of Beechey Island, 560 miles above the Arctic Circle</figcaption></figure>
</div>
<figure id="attachment_16496" aria-describedby="caption-attachment-16496" style="width: 650px" class="wp-caption alignnone"><img loading="lazy" decoding="async" class="wp-image-16496 size-full" style="font-weight: bold; font-size: 1rem;" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/20250818_054609-scaled-e1756236475834.jpg" alt="" width="650" height="488"><figcaption id="caption-attachment-16496" class="wp-caption-text">The Final Resting Place for 3 members of the failed Franklin Expedition</figcaption></figure>
* Side note:  Read some books before you go.  I benefited greatly by reading <a href="https://amzn.to/4n33ekm" target="_blank" rel="noopener">Across The Top of The World </a>(Amazon Affiliate link) before our departure, an amazing book about the early expeditions in search of the Northwest Passage, including a chapter on the doomed Franklin Expedition.
<hr>
The Polar Bears
We visited Beechey Island early in the morning.
Why? Because we needed the rest of the day to go “hunting.”  Based on ice maps the crew studied daily, they knew there was a large swatch of sea ice nearby.  From experience, they knew that’s where the polar bears would be.  Even in the summer, the polar bears use the sea ice to hunt for seals.
<figure id="attachment_16507" aria-describedby="caption-attachment-16507" style="width: 750px" class="wp-caption alignnone"><img loading="lazy" decoding="async" class="wp-image-16507 size-full" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/907db65ca71b466bad9411c6ef769010_Photo_Upload_4_Nuuk_to_Nuuk_August_10_2025-e1756309921823.jpg" alt="" width="750" height="422"><figcaption id="caption-attachment-16507" class="wp-caption-text">Mom is concerned about a nearby male hunting her cub (males eat cubs!)</figcaption></figure>
We had a successful “hunt.”
We spotted 6 polar bears, and savored every minute watching them in their natural environment. The highlight was watching a Mom with her cub as they faced a life-threatening male, which are known to eat cubs. We were spellbound by the drama and watched as Mom and cub ultimately jumped in the water and swam 500 yards to move downwind from the male, who (fortunately) missed his snack.
By the time the day was done, even the ship’s crew was excited by the results.  “I’ve been traveling to the Arctic for years, and you just don’t see them this close!”  Yes, it was that good.  We all took photos with our cell phones, but I’m pleased to share some professional photos with you (thanks to John Chardine, a retired research scientist who was a guest speaker on the ship and permitted me to use his photos – he took them while we were standing next to each other on the deck of the boat.  Check out his photography site <a href="https://www.chardinephoto.ca/" target="_blank" rel="noopener">here).</a>
<figure id="attachment_16509" aria-describedby="caption-attachment-16509" style="width: 600px" class="wp-caption alignnone"><img loading="lazy" decoding="async" class="wp-image-16509 size-full" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/Screenshot_20250824_091952_Gallery-e1756310417124.jpg" alt="" width="600" height="733"><figcaption id="caption-attachment-16509" class="wp-caption-text">The first bear we spotted, a big (and curious) male.</figcaption></figure>
<figure id="attachment_16511" aria-describedby="caption-attachment-16511" style="width: 650px" class="wp-caption alignnone"><img loading="lazy" decoding="async" class="wp-image-16511 size-full" style="font-weight: bold; font-size: 1rem;" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/Screenshot_20250824_091725_Gallery-e1756321344233.jpg" alt="" width="650" height="712"><figcaption id="caption-attachment-16511" class="wp-caption-text">Big male, trying to find the cub.</figcaption></figure>
<figure id="attachment_16514" aria-describedby="caption-attachment-16514" style="width: 700px" class="wp-caption alignnone"><img loading="lazy" decoding="async" class="size-full wp-image-16514" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/Screenshot_20250819_090355_Gallery-e1756322092327.jpg" alt="" width="700" height="721"><figcaption id="caption-attachment-16514" class="wp-caption-text">Mom & Cub swimming to safety</figcaption></figure>
<figure id="attachment_16513" aria-describedby="caption-attachment-16513" style="width: 700px" class="wp-caption alignnone"><img loading="lazy" decoding="async" class="size-full wp-image-16513" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/Screenshot_20250824_091449_Photos-e1756321932508.jpg" alt="" width="700" height="582" srcset="https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/Screenshot_20250824_091449_Photos-e1756321932508.jpg 700w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/Screenshot_20250824_091449_Photos-e1756321932508-300x249.jpg 300w" sizes="auto, (max-width: 700px) 100vw, 700px" /><figcaption id="caption-attachment-16513" class="wp-caption-text">I took this one with my cell phone.</figcaption></figure>
<hr>
Conclusion
The trip is one my wife and I will never forget.  Sure, it cost a lot of money, but creating special memories is an investment I’ll never regret in these few short years we have to live our dream lives.  How much did we enjoy it?  Enough that we’ve already booked a second Expedition Cruise with Viking.  In November 2027, we’ll be sailing The Octantis to Antarctica.
We can’t wait.
Long-time readers know I’ve been <a href="https://www.theretirementmanifesto.com/why-is-it-so-hard-to-spend-money/" target="_blank" rel="noopener">struggling to spend </a>in retirement.  The good news?  I’m getting better at it.  I recently wrote a <a href="https://www.linkedin.com/feed/update/urn:li:activity:7365391177686196224/" target="_blank" rel="noopener">LinkedIn post</a>, which summarizes my thoughts on our trip and is an appropriate conclusion for today’s post.
After we retire, what’s the best use of our money?
Once your basic needs are covered, give yourself permission to spend (within safe limits) on creating memories. In time, those memories will become your greatest investments. 
I returned last night from an (expensive) 2-week Expedition to Greenland and The Northwest Passage. 
The value of watching polar bears (including this mom and her cub) live in their natural environment, 500 miles North of The Arctic Circle?
Priceless.
Life is short. Invest in making new memories, while you still can.
#NoRegrets
P.S. If you enjoyed this “travel blog” article, you may be interested in the following summaries of every major trip we’ve taken since my retirement in 2018: 
<ul>
<li>2018:  <a href="https://www.theretirementmanifesto.com/what-i-learned-from-an-epic-7000-mile-train-journey/" target="_blank" rel="noopener">A 7,000-Mile Train Trip</a></li>
<li>2019:  <a href="https://www.theretirementmanifesto.com/taking-an-rv-trip-across-america-with-4-dogs/" target="_blank" rel="noopener">A Summer In The Pacific Northwest</a></li>
<li>2020:  <a href="https://www.theretirementmanifesto.com/the-great-escape/" target="_blank" rel="noopener">Michigan’s Upper Peninsula</a> and <a href="https://www.theretirementmanifesto.com/a-drive-across-america/" target="_blank" rel="noopener">A Drive Across America</a></li>
<li>2021: <a href="https://www.theretirementmanifesto.com/our-2021-rv-adventure-is-underway/" target="_blank" rel="noopener"> A Tour of The Midwest</a></li>
<li>2022: <a href="https://www.theretirementmanifesto.com/our-2022-rv-adventure-is-underway/" target="_blank" rel="noopener">How COVID Attacked Our 2022 RV Adventure </a></li>
<li>2023: <a href="https://www.theretirementmanifesto.com/on-the-road-again/" target="_blank" rel="noopener">Slow Travel Visiting Family</a></li>
<li>2024:<a href="https://www.theretirementmanifesto.com/were-going-on-vacation/" target="_blank" rel="noopener"> The Maryland Shore </a>and <a href="https://www.theretirementmanifesto.com/chasing-fall-colors-in-the-ozarks-our-next-rv-adventure/" target="_blank" rel="noopener">A Month in The Ozarks</a></li>
</ul>
<hr>
Your Turn:  What’s the best vacation you’ve ever taken, and why?  Have you ever considered traveling in the Arctic?  Want to join us in Antarctica? Let’s chat in the comments…
The post <a href="https://www.theretirementmanifesto.com/traveling-in-the-arctic/">Traveling In The Arctic</a> appeared first on <a href="https://www.theretirementmanifesto.com">The Retirement Manifesto</a>.
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<title>OBBBA Tax Changes While Trekking Through the Alps: A Pre-Go-Go Reflection</title>
<link>https://www.theretirementmanifesto.com/obbba-tax-changes-while-trekking-through-the-alps-a-pre-go-go-reflection/?utm_source=rss&utm_medium=rss&utm_campaign=obbba-tax-changes-while-trekking-through-the-alps-a-pre-go-go-reflection</link>
<comments>https://www.theretirementmanifesto.com/obbba-tax-changes-while-trekking-through-the-alps-a-pre-go-go-reflection/#comments</comments>
<dc:creator><![CDATA[Dana Anspach]]></dc:creator>
<pubDate>Thu, 07 Aug 2025 08:35:42 +0000</pubDate>
<category><![CDATA[Retirement]]></category>
<category><![CDATA[retirement taxes]]></category>
<guid isPermaLink="false">https://www.theretirementmanifesto.com/?p=16410</guid>
<description><![CDATA[What is one thing the OBBBA Tax Changes have in common with the Alps? Today, I’m going to answer that riddle.  I’m also going to highlight the key issues from […]
The post <a href="https://www.theretirementmanifesto.com/obbba-tax-changes-while-trekking-through-the-alps-a-pre-go-go-reflection/">OBBBA Tax Changes While Trekking Through the Alps: A Pre-Go-Go Reflection</a> appeared first on <a href="https://www.theretirementmanifesto.com">The Retirement Manifesto</a>.
]]></description>
<content:encoded><![CDATA[What is one thing the OBBBA Tax Changes have in common with the Alps?
Today, I’m going to answer that riddle.  I’m also going to highlight the key issues from the new tax bill:
<ul>
<li>What are the big wins for retirees?</li>
<li>What changes may hurt early retirees?</li>
<li>What the new law means for retirement planning.</li>
</ul>
But first, a story of my recent Pre-Go-Go adventure…
On June 29th, I left for Switzerland.
It was more than a vacation—it was my first deliberate experiment blending the final stretch of my working years with the early flavors of retirement. I’ve started calling it my “Pre-Go-Go” phase: that period before retirement where you test out what life might look like when the pace slows and priorities shift.
Since starting my business in 2011, I’ve never taken a vacation without my laptop—until this one. While I remained mostly unplugged, I used my phone to peek in on emails and Slack messages (an internal messaging app we use).
On July 1, we began our hike. Eight to ten hours a day, I was outdoors in the most beautiful country I’ve ever seen, with emails—and tax bills—far from my mind. I grew up watching The Sound of Music. Watching it on the screen and seeing it firsthand are quite different. The sheer scale of seeing mountains shoot straight up is… awe-inspiring. Our world is incredible.
Below is a picture from our first day of hiking.
<figure id="attachment_16414" aria-describedby="caption-attachment-16414" style="width: 640px" class="wp-caption alignnone"><a href="https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/Dana-Alps-Day1-rotated.jpg"><img loading="lazy" decoding="async" class="size-full wp-image-16414" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/Dana-Alps-Day1-rotated.jpg" alt="A view from the hiking trail in the Alps." width="640" height="480" srcset="https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/Dana-Alps-Day1-rotated.jpg 640w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/Dana-Alps-Day1-300x225.jpg 300w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/Dana-Alps-Day1-360x270.jpg 360w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/Dana-Alps-Day1-80x60.jpg 80w" sizes="auto, (max-width: 640px) 100vw, 640px" /></a><figcaption id="caption-attachment-16414" class="wp-caption-text">Tour du Mont Blanc Hike – Day 1</figcaption></figure>
<hr>
<h1>The One Big Beautiful Bill Act Rolls Out</h1>
On July 3rd, our internal “Planner” messaging channel began buzzing with the news of the One Big Beautiful Bill Act (OBBBA). 
“What would the team do?” I wondered.
They immediately set out to update our planning model. By Monday, July 7th, they began putting clients in the new model to understand the impact. They even wrote and sent a brief newsletter outlining a few key provisions.
I watched it all happen from afar and did not intervene. They didn’t miss a beat.
And I didn’t miss a beat either! I enjoyed my vacation and did not let the news distract me. Two and a half weeks immersed in another world did wonders for my energy and focus.
July 16th was my first day back in the office. I was ready to go back. I missed work. It felt like being away from home or family for too long.  I’m clearly not ready for retirement—but I also confirmed that I need to incorporate more breaks like these. That balance is critical for me at this stage of my career.
Given all this, I label my first Pre-Go-Go trip experiment a success!
Now, on to what I (luckily) still love to do—translate financial complexity into what it means at a household level.
<hr>
<h2>Digesting the New Tax Changes</h2>
My first thoughts on the OBBBA?
What a hodge-podge of random provisions! What complexity. If we thought Roth conversion analyses were difficult before… ooof (me trying to type out the sound of getting the wind knocked out of you). They just got exponentially more challenging.
For those who want a thorough technical run-down of the rules, no one does it better than the professionals who write for Kitces.com at the Nerd’s Eye View. You’ll find their write-up at <a href="https://www.kitces.com/blog/obbba-one-big-beautiful-bill-act-tax-planning-salt-cap-senior-deduction-qbi-deduction-tax-cut-and-jobs-act-tcja-amt-trump-accounts/" target="_blank" rel="noopener">Breaking Down The “One Big Beautiful Bill Act”: Impact of New Laws on Tax Planning</a>.
For those who want a practical summary, I’ve outlined key provisions below—grouped by who benefits and who might be impacted negatively.
Let’s dive in.
<img loading="lazy" decoding="async" class="alignnone size-full wp-image-16431" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/taxes-4326713_640.jpg" alt="" width="640" height="431" srcset="https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/taxes-4326713_640.jpg 640w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/08/taxes-4326713_640-300x202.jpg 300w" sizes="auto, (max-width: 640px) 100vw, 640px" />
<hr>
<h1>Key Provisions of OBBBA</h1>
<hr>
<h1>1. Universal Wins</h1>
<h2>A) Most Impactful: Tax Rates</h2>
<ul>
<li>Impacts: Everyone</li>
<li>Timeframe: 2025, no expiration</li>
</ul>
The current brackets no longer sunset, avoiding a reversion to pre-2018 levels. This one change alone is responsible for increasing “fundedness” by around 3% in most plans I’ve reviewed. (Fundedness is one of several metrics used to <a href="https://www.sensiblemoney.com/learn/3-ways-to-tell-if-your-retirement-income-plan-will-work/" target="_blank" rel="noopener">stress test a retirement plan</a>.)
This positive impact comes from a reduction in households’ <a href="https://www.advisorperspectives.com/articles/2023/11/13/managing-taxes-retirement-effective-marginal-rate" target="_blank" rel="noopener">effective marginal rate</a>, which reduces the present value of lifetime taxes, increasing the after-tax value of assets estimated at the end of a plan.
Or, put another way, these improved metrics offer the opportunity to spend more earlier without compromising future financial outcomes.
You may want to ask, “Rather than leave an extra couple hundred thousand when I’m 85, how much more could I spend now and still end up in the same place?”
<h2>B) Standard Deduction and Bracket Adjustments (Minor, but Beneficial)</h2>
These next two provisions also benefit nearly everyone:
<ul>
<li>In 2025, a slightly higher standard deduction takes effect.</li>
<li>In 2026, the 10% and 12% brackets expand modestly, which becomes worth a few hundred to a few thousand dollars in tax savings, depending on household income.</li>
</ul>
<h2>C) Extra Senior Deduction</h2>
<ul>
<li>Impacts: Age 65+, MAGI < $175K* (singles), < $250K (joint)</li>
<li>Timeframe: 2025 to 2028</li>
</ul>
MAGI refers to Modified Adjusted Gross Income.
Adds $6,000 (singles) or $12,000 (joint) to the standard deduction for qualifying seniors. The deduction begins phasing out at $75K (single) and $150K (joint), making Roth conversions and tax-deferred withdrawals trickier to plan when near those limits.
*Previous posted version showed this as $150k. It has been corrected to $175k.
<h2>D) Mortgage Insurance Deduction</h2>
<ul>
<li>Impacts: Homeowners with <20% down</li>
<li>Timeframe: Begins 2026</li>
</ul>
Mortgage insurance premiums become deductible again—helpful for late-start retirement savers, or perhaps those rebuilding after divorce or bankruptcy and using FHA/VA loans with less than 20% down.
<h2>E) Auto Loan Interest Deduction</h2>
<ul>
<li>Impacts: MAGI <$150K (single), <$250K (joint)</li>
<li>Timeframe: 2025 to 2028</li>
</ul>
Eligible for vehicles assembled in the U.S. and purchased with a new loan (or refinanced without increasing balance). Only the first $10,000 of interest is deductible.
I’m honestly perplexed how many households at these income levels will rack up $10K in interest. Perhaps that’s because I’m focused on retirees – a colleague reminded me that many households with teenage children have multiple cars. And who knows, maybe auto financing departments will get creative with loan packages where you pay all interest first?
<h2>F) Qualified Tips and Overtime Deductions</h2>
<ul>
<li>Impacts: MAGI < $150K (single), < $300K (joint)</li>
<li>Timeframe: 2025 to 2028</li>
</ul>
The Qualified Tips (first $25,000 of qualified tip income – same limit single or married) and Qualified Overtime deductions (first $12,500 single/$25,000 joint) are subject to eligibility requirements and phaseouts.
I see this as a win for service and blue-collar workers. Also helpful for retirees working part-time in tipped industries.
<h2>G) Charitable Deduction for Non-Itemizers </h2>
<ul>
<li>Impacts: Non-itemizing filers</li>
<li>Timeframe: Begins 2026, no expiration</li>
</ul>
Non-itemizers can deduct $1,000 (single) or $2,000 (joint) for charitable gifts. Modest, but could help households who give consistently but don’t meet the standard deduction threshold. However, this deduction, unlike the Qualified Charitable Contribution (QCD from an IRA), does not lower AGI, so it won’t help in other areas. 
<h2>H) SALT Deduction Increase</h2>
<ul>
<li>Impacts: MAGI < $600,000</li>
<li>Timeframe: 2025 – 2029</li>
</ul>
Raises the SALT cap (state and local taxes) to $40,000 (phasing out at MAGI of $500K and gone by $600K). Most useful for middle-income earners in high-tax states.
The definition of “middle income,” of course, is up for debate.
<h2>I) Estate Tax Exemption</h2>
<ul>
<li>Impacts: Ultra-high-net-worth households</li>
<li>Timeframe: Begins 2026</li>
</ul>
The estate tax exemption increases to $15 million per person, starting in 2026. Great news for the next generation of a select few families.
<hr>
<h1>2. Changes That May Hurt Early Retirees</h1>
<h2>A) HealthCare Tax Credit Changes</h2>
<ul>
<li>Impacts: Pre-age 65 Marketplace Plan users</li>
<li>Timeframe: Begins 2026, no expiration</li>
</ul>
We’re back to pre-2021 rules. The 8.5% MAGI cap on premiums is gone. Starting in 2026, your income must fall within the federal poverty level thresholds to qualify for Advance Premium Tax Credits.
In the past few years, I’ve seen many early retirees (in the 55 to 64 age range) qualify for substantial credits that helped cover their insurance premium costs—even though many of them had financial assets in the $1.5 to $2.5 million range. That’s because eligibility is not tied to assets but to income. And income can be managed by when and how you use various assets for cash flow.
<ul>
<li>Before 2021, if your income exceeded the federal poverty levels (FPL – adjusted each year with inflation), you were not eligible for a subsidy to help cover the cost of a Marketplace health plan.</li>
<li>From 2021 to 2025, adjustments to the formula helped more households qualify for higher credits. In 2026, those adjustments are eliminated. Less households will qualify, and those who do will see lower credit amounts.</li>
</ul>
Additional changes are beyond the scope of this summary. But it all means that starting in 2026, income projections for your Marketplace plan application will be more critical—if you overshoot, you may owe far more back when you file your tax return than in recent years.
However, there may be one silver lining: a new HSA-eligible Marketplace plan. Some households losing credit eligibility may be able to get an HSA deduction instead—if they choose their plan appropriately.
Deductions, however, are not as beneficial as credits.
<h2>B) Not Great for Gamblers</h2>
<ul>
<li>Impacts: Itemizers with gambling activity</li>
<li>Timeframe: Begins 2025, no expiration</li>
</ul>
Losses can now only offset 90% of winnings. This hits gambling retirees hard, since winnings inflate AGI but losses don’t reduce it. (And a higher AGI can result in higher taxes in many other areas.)
I’ll never forget one client I worked with, who has since passed, who had over $500,000 in gambling wins and losses on his tax return each year. That’s a lot of time at the casino. Now that same client would claim $50,000 of gross income, even though his losses equaled his winnings.
With sports betting on the rise, this may impact more people.
<h2>C) Charitable Deduction Changes for Itemizers</h2>
<ul>
<li>Impacts: Itemizers who make charitable contributions</li>
<li>Timeframe: Begins 2026, no expiration</li>
</ul>
Charitable contributions, beginning in 2026, will be subject to a .5% (half a percent) floor, with a complex set of ordering rules to follow depending on the type of donation.
For some, donating more this year may be beneficial.
In one recent client meeting, we had donor-advised fund (DAF) contributions planned for this year and next, then in 2027, donations shift to come from the IRA through Qualified Charitable Contributions as this person reaches age 70 ½ that year. Now, instead, we recommend making the 2026 DAF contributions in 2025 to avoid losing part of the deduction due to the floor next year.
In addition, in 2026, there is an itemized deduction cap, which effectively means the benefit of the deductions is capped at the 35% rate, rather than the highest 37% rate. This impacts only those with income falling in this 37% bracket.
Essentially, these rules impose both a floor and a cap on charitable deductions.
For those who regularly contribute to charity, consider accelerating any future planned large charitable contributions into 2025.
<h2>D) AMT (Alternative Minimum Tax)</h2>
<ul>
<li>Impacts: Taxable income > $500K (single), > $1M (joint)</li>
<li>Timeframe: Begins 2026, no expiration</li>
</ul>
I’m not sure if anyone knows what AMT is anymore—since TCJA (Tax Cuts and Jobs Act) changes, it impacts only about .1% (1/10 of 1%) of households. A specified amount of income is exempt from the AMT tax. But this exemption phases out as your income crosses IRS thresholds.
Now, the AMT exemption phaseout limits drop, most likely hitting those who still hold incentive stock options—uncommon since 2006 accounting-rule changes—but potentially relevant in tech-heavy or executive households. This may also impact those with large capital gains, as those gains may more easily push them into the range where they lose the exemptions.
<hr>
<h1>What This Means for Planning</h1>
There are many, many other changes. The sheer scope of this bill is mind-boggling. Without software, accurately incorporating everything into a tax return is nearly impossible. Perhaps Einstein could do it.
Everyone wants a “rule of thumb” approach for what to adjust. That was hard before. Now, with multiple income cliffs and overlapping MAGI thresholds, the only realistic approach is case-by-case.
One client told us they’d heard they should accelerate Roth conversions. Maybe—for some people, in some situations. But I can’t imagine recommending that universally based on OBBBA.
Our planning team has also debated how “permanent” these changes really are. Could future legislation raise rates? Absolutely. But even then, plans still benefit from several years of lower rates.
<hr>
<h2>My Universal Conclusions</h2>
There are only two things I’ve seen hold true in every single plan so far:
<ol>
<li>OBBBA improves outcomes by a measurable margin.</li>
<li>It adds immense complexity, especially around conversions and withdrawal strategies.</li>
</ol>
Oh, and I’ll add a third: it gives me one giant headache. Has anyone tried correlating Advil sales with tax bill releases?
These changes illustrate the importance of thoughtful tax planning—it’s an evolving puzzle. And the OBBBA added many new pieces.
Whether you’re still working or already easing into retirement, an updated plan may reveal more room to breathe—maybe even enough for an earlier retirement, that bucket-list Pre-Go adventure, or simply the confidence for more worry-free spending in your Go-Go years.
In the opening line, I asked a riddle.  In my final line, I’ll answer it.
“Room To Breathe”
Perhaps the one thing OBBBA has in common with The Alps.
<hr>
Your Turn: Have you evaluated how the OBBBA changes impact you? If so, we’d love to hear your insights in the comments.
The post <a href="https://www.theretirementmanifesto.com/obbba-tax-changes-while-trekking-through-the-alps-a-pre-go-go-reflection/">OBBBA Tax Changes While Trekking Through the Alps: A Pre-Go-Go Reflection</a> appeared first on <a href="https://www.theretirementmanifesto.com">The Retirement Manifesto</a>.
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<title>The Future of Retirement: How Technology Will Make Aging Easier</title>
<link>https://www.theretirementmanifesto.com/the-future-of-retirement-how-technology-will-make-aging-easier/?utm_source=rss&utm_medium=rss&utm_campaign=the-future-of-retirement-how-technology-will-make-aging-easier</link>
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<dc:creator><![CDATA[Fritz Gilbert]]></dc:creator>
<pubDate>Thu, 10 Jul 2025 08:38:56 +0000</pubDate>
<category><![CDATA[Retirement]]></category>
<category><![CDATA[retirement activities]]></category>
<category><![CDATA[retirement planning]]></category>
<guid isPermaLink="false">https://www.theretirementmanifesto.com/?p=15904</guid>
<description><![CDATA[I remember my first “mobile phone” like it was yesterday (calling it “mobile” was a stretch). It was the late 1980s, I was in my first sales role, and our […]
The post <a href="https://www.theretirementmanifesto.com/the-future-of-retirement-how-technology-will-make-aging-easier/">The Future of Retirement: How Technology Will Make Aging Easier</a> appeared first on <a href="https://www.theretirementmanifesto.com">The Retirement Manifesto</a>.
]]></description>
<content:encoded><![CDATA[I remember my first “mobile phone” like it was yesterday (calling it “mobile” was a stretch).
It was the late 1980s, I was in my first sales role, and our VP wanted all sales reps to be accessible while traveling.  I recall the technician installing the “box” part of the phone in the trunk of my company car, and how I had to remove it from the mount and into a case for carrying.  The thing was huge and similar to the following picture I found <a href="https://techcentral.co.za/the-cellphones-of-the-1980s/191544/" target="_blank" rel="noopener">here</a>:
<figure id="attachment_16072" aria-describedby="caption-attachment-16072" style="width: 454px" class="wp-caption alignnone"><img loading="lazy" decoding="async" class="size-full wp-image-16072" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/02/Screenshot-2025-02-11-3.36.32-PM.png" alt="" width="454" height="379" srcset="https://www.theretirementmanifesto.com/wp-content/uploads/2025/02/Screenshot-2025-02-11-3.36.32-PM.png 454w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/02/Screenshot-2025-02-11-3.36.32-PM-300x250.png 300w" sizes="auto, (max-width: 454px) 100vw, 454px" /><figcaption id="caption-attachment-16072" class="wp-caption-text">The Vodafone weighed 10 lbs.</figcaption></figure>
In 1996, I got a <a href="https://lowendmac.com/2016/a-history-of-palm-part-2-palm-pdas-and-phones-1996-to-2003/" target="_blank" rel="noopener">Palm Pilot.</a>  I loved that thing.  I remember the docking station and how you had to hit that “synch” button to run an update between your computer and the Palm unit. For the first time in my career, I could ditch my physical address book and calendar and view things on my computer or the Palm unit. I loved the cool stylus that slid sleekly into the case.
I was, finally, hip.  <img src="https://s.w.org/images/core/emoji/16.0.1/72x72/1f609.png" alt="😉" class="wp-smiley" style="height: 1em; max-height: 1em;" />
<figure id="attachment_16073" aria-describedby="caption-attachment-16073" style="width: 296px" class="wp-caption alignnone"><img loading="lazy" decoding="async" class="wp-image-16073 size-full" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/02/Screenshot-2025-02-11-3.42.00-PM.png" alt="" width="296" height="379" srcset="https://www.theretirementmanifesto.com/wp-content/uploads/2025/02/Screenshot-2025-02-11-3.42.00-PM.png 296w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/02/Screenshot-2025-02-11-3.42.00-PM-234x300.png 234w" sizes="auto, (max-width: 296px) 100vw, 296px" /><figcaption id="caption-attachment-16073" class="wp-caption-text">The Palm Pilot – I loved that stylus!</figcaption></figure>
A trip down memory lane wouldn’t be complete without mentioning the 2002 introduction of the first <a href="https://en.wikipedia.org/wiki/BlackBerry" target="_blank" rel="noopener">Blackberry</a> smartphone, whose nickname “Crackberry” came years before people knew of the addictions <a href="https://www.theretirementmanifesto.com/beware-the-dopamine-cartel/" target="_blank" rel="noopener">The Dopamine Cartel</a> would later spread to the world.  I loved my BlackBerry and the irresistable tactile pleasure those buttons provided (I’ve never enjoyed the “smooth-faced” phones to the same degree as those wonderful little buttons):
<figure id="attachment_16079" aria-describedby="caption-attachment-16079" style="width: 350px" class="wp-caption alignnone"><img loading="lazy" decoding="async" class="wp-image-16079 size-full" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/02/Screenshot-2025-02-12-11.55.04-AM-e1739379738789.png" alt="" width="350" height="410"><figcaption id="caption-attachment-16079" class="wp-caption-text">Nothing beat the click of those buttons!</figcaption></figure>
A lunky old mobile phone, my first Palm Pilot, and the infamous CrackBerry… A fun trip down memory lane, but what’s my point?
It’s easy to look in the rearview mirror and see the improvements technology has brought into our lives.
But what about the future?  
How will technology impact our later years?
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<img loading="lazy" decoding="async" class="alignnone size-full wp-image-16350" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/03/Screenshot-2025-06-17-2.35.11-PM.png" alt="" width="437" height="667" srcset="https://www.theretirementmanifesto.com/wp-content/uploads/2025/03/Screenshot-2025-06-17-2.35.11-PM.png 437w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/03/Screenshot-2025-06-17-2.35.11-PM-197x300.png 197w" sizes="auto, (max-width: 437px) 100vw, 437px" />
<hr>
<h1>The Future of Retirement</h1>
As a salesman in the mid-1980s, I thought nothing of pulling into a hotel in the middle of the day and using my corporate calling card in the pay phone cubicle to check in with the office secretary. Voice mail wasn’t a thing, so the secretary dutifully wrote down the messages and recited them when I called in. I remember those hotel corridors lined with pay phones, and the mass of other salespeople doing the same thing.  
It’s just the way it was 40 years ago.
We had no idea what was coming, and we were fine with how things were.
As it was in the past, so it will be in the future.
From the beginning of my career to the end of my career, the world changed. From the beginning of my retirement to the end of my retirement, the world will change again.  We have no idea what is coming, and we’re fine with how things are. But one thing is certain:
The speed of technological advancement will only increase, and our lives will be impacted in ways we can’t imagine.
<hr>
<figure id="attachment_16124" aria-describedby="caption-attachment-16124" style="width: 600px" class="wp-caption alignnone"><img loading="lazy" decoding="async" class="size-full wp-image-16124" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/03/Screenshot_20250306-103438-e1741278980196.png" alt="will technology make aging easier" width="600" height="592"><figcaption id="caption-attachment-16124" class="wp-caption-text">AI image by Google Gemini</figcaption></figure>
Technology We’ll Use When We’re “Old”
It’s easy to look back and recall the changes that have occurred, but it’s entirely different to try to predict what the future will bring.  Sure, we’ve all heard about <a href="https://chatgpt.com/" target="_blank" rel="noopener">ChatGPT</a>, but few of us truly grasp the impact AI will have on our later years.  
None of us knows what the future holds, but it’s interesting to imagine what impact technology will have on our old age. Based on some research I’ve done and using my imagination, here are a few things we may have to look forward to.  They seem far-fetched, but considering how far we’ve come in the past few decades, and recognizing the pace of technology will only increase, these projections may fall short of the reality we’ll be living when we’re “old.”
“Aging In Place” will become far more practical, and children who live miles away from their widowed Mom will have more options to provide care from afar.  Transportation will change, as will the way “support” services are provided for the elderly. 
Some ideas to consider…
Robotic Advancement:  When we’re “old,”  we’ll look back on that <a href="https://www.irobot.com/en_US/roomba.html" target="_blank" rel="noopener">Roomba</a> in the same way we look back at that 10-pound “mobile” phone today.  It worked, but we had no idea where the advancements would lead.  Advancements in robotics, combined with AI technology, will revolutionize our elderly lives.  Our robot assistants will carry in the groceries, keep our homes clean, and help us get out of bed (and into our robotic wheelchairs). Self-driving vehicles will, at some point, become common, eliminating the need for future generations to take away their parents’ keys.
AI Personal Assistants:  An AI “nurse” who monitors us and is available 24/7 will be helpful for our far-away children, and a natural solution for the increased healthcare needs as Baby Boomers reach old age.  In addition to ensuring we take our daily medications, our assistant will monitor our vitals, detect if we fall, and automatically contact emergency personnel in the event of an emergency.  Personal safety devices could be available, which will automatically deploy in the event of a fall or when they detect instability.  “I’ve fallen, and I can’t get up” will become a thing of the past.  The burden of caregiving will be greatly reduced for children or spouses dealing with aging loved ones.
Financial Management:  The role of today’s financial planner will change dramatically. With the projected shortfall of financial planners, AI will fill the gap and become embraced by most.  Automated rebalancing, monitoring of your financial accounts, fraud detection, and automatic refilling of your spending accounts will reduce the need for personal contact with an advisor.  Smart advisors are already getting ahead of this trend by offering in-house AI features as part of their service, allowing them to serve a larger account base with the same hours of personal involvement.  Client expenses will fall accordingly.
Predictive Healthcare:  Doctors will treat a disease before you get it.  Healthcare technology will move to preventative solutions rather than today’s “reactive” healthcare business model.  AI monitors will constantly monitor your vitals and notify professionals in real time if something changes.  Technology will learn to detect anomalies that increase your risk of certain diseases, and preventative medicine will become the norm.
AI Companionship:  Loneliness is an epidemic, and AI will evolve to meet the need for companionship.  Lifelike robotics are a certainty (it’s not if, but when), and their AI brain will tell you exactly what you want to hear.  If you think those algorithms on your social media are addictive, wait until you meet your new AI friend.  Some of us will call them our best friends. It’s sad, in a way, but compared to spending your latter years in a state of loneliness, it seems the lesser of two evils.
Memory Preservation:  I suspect we’ll see some breakthroughs in Alzheimer’s research (perhaps it’s wishful thinking).  Technology will lead to breakthrough cures for many of the plagues of aging.  Cognitive augmentation will provide AI-driven tools to help keep the mind sharp. The way we pass memories down to future generations will become almost life-like.  Our great-great-grandchildren may view 3D holograms of us telling stories about our lives.  More likely, our likeness will be preserved with AI and carry on conversations with the generations that follow.
Increased Lifespan:  By the time we get there, we’ll be celebrating our 100th birthday with plenty of friends. Technological advances will reduce the death rates of many common diseases, and improvements in preventive health care will result in an increased life expectancy.  Nutrition and fitness programs will be customized via AI to address your areas of greatest weakness. Folks in their 90s will be running marathons.  Not only will we live longer, but we’ll be healthier for most of those years. I fully expect I’ll live to 100, and I hope I’m still writing the occasional post to be able to tell you, “I told you so.” (wink)
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Lifelong Learning & Entertainment: Our options for lifelong learning will expand, offering augmented “reality tours” of every spot on earth, from some of the greatest experts in any topic of interest.  Algorithms will know what you like, and you’ll be fed a constant stream of immersive experiences.  Want to know what it was like to fight at Gettysburg? Curious what it was like to face a Roman Gladiator? Want to see Jesus give his Sermon on the Mount?  Want to take a painting course from Picasso? The educational and entertainment opportunities will be limitless.
The End of Aging:  This one’s a stretch, but I think it’s fair to say how we age will differ dramatically from what previous generations experienced.  No one knows the future, but I suspect in 40 years we’ll be laughing as we tell our great-grandchildren when we first heard the term “Artificial Intelligence,” and how naive we were when we said it wasn’t anything that would directly affect us in retirement.
<hr>
Conclusion
There was something quaint about stopping at payphones and using my phone calling card as a 25-year-old sales rep.  When they installed that first “mobile” phone in my car, I never imagined we’d all be carrying computers in our pockets years before my retirement.  
Despite the drawbacks of technology, life is better now.
I suspect when I’m 100 and looking back at my 60s, I’ll be saying the same thing.  I encourage you to pay attention to technology.  Rather than resist change, be willing to explore new developments that may be helpful as you age. Stay curious, and think about the possibilities.
You can reject it or embrace it, but there’s little doubt that technology will make our lives easier when we get “old.”
For that, we should be thankful.
<hr>
Your Turn:  Have you thought about how technology will impact the future of retirement?   I’d love to hear your thoughts.  And, did you love your Blackberry as much as I loved mine?  Let’s chat in the comments.
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<title>How Social Security Spousal Benefits May Change My Claim Date</title>
<link>https://www.theretirementmanifesto.com/how-social-security-spousal-benefits-may-change-my-claim-date/?utm_source=rss&utm_medium=rss&utm_campaign=how-social-security-spousal-benefits-may-change-my-claim-date</link>
<comments>https://www.theretirementmanifesto.com/how-social-security-spousal-benefits-may-change-my-claim-date/#comments</comments>
<dc:creator><![CDATA[Dana Anspach]]></dc:creator>
<pubDate>Thu, 26 Jun 2025 08:36:24 +0000</pubDate>
<category><![CDATA[Retirement]]></category>
<category><![CDATA[financial planning]]></category>
<category><![CDATA[retirement planning]]></category>
<category><![CDATA[social security]]></category>
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<description><![CDATA[After 18 years of writing about Social Security and conducting hundreds of analyses for singles, couples, widows, widowers, and divorcees, I figured I had my own claiming strategy nailed down. […]
The post <a href="https://www.theretirementmanifesto.com/how-social-security-spousal-benefits-may-change-my-claim-date/">How Social Security Spousal Benefits May Change My Claim Date</a> appeared first on <a href="https://www.theretirementmanifesto.com">The Retirement Manifesto</a>.
]]></description>
<content:encoded><![CDATA[After 18 years of writing about Social Security and conducting hundreds of analyses for singles, couples, widows, widowers, and divorcees, I figured I had my own claiming strategy nailed down.
So, when I finally ran my own customized analysis, my eyes popped open in astonishment at the recommendation I saw!
Naturally, I assumed I’d claim at 70—not a day earlier. That’s the go-to advice for healthy, married high earners.
I was 100% certain the software would confirm it.
But it didn’t.
<h2>Here’s what happened.</h2>
<hr />I thought I had my Social Security claiming strategy figured out...until I didn't. Here's what happened. <a href='https://twitter.com/intent/tweet?url=https%3A%2F%2Fwww.theretirementmanifesto.com%2Fhow-social-security-spousal-benefits-may-change-my-claim-date%2F&text=I%20thought%20I%20had%20my%20Social%20Security%20claiming%20strategy%20figured%20out...until%20I%20didn%27t.%20Here%27s%20what%20happened.&via=retiremanifesto&related=retiremanifesto' target='_blank' rel="noopener noreferrer" >Share on X</a> <hr />
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<hr>
<h1>How Spousal Benefits May Change My Claim Date</h1>
Until two years ago, I was unmarried and hadn’t spent much time on my own claiming strategy. I’m in great health— my <a href="https://novoslabs.co/product/novos-age/" target="_blank" rel="noopener">Novos Epigenic Age Report</a> pegs my biological age at 45 – nine years younger than my actual age. (Health aficionados – check it out!)
I wanted to maximize my guaranteed, inflation-adjusted lifetime income. Unless my health took a major turn, claiming before 70 wasn’t on the radar. For most healthy, single individuals with assets or income to draw on between 62 and 70, that’s the approach I recommend.
Then I got married to a Canadian.
He is three years my senior and has no prior U.S. work history.
Still, I didn’t give it much thought. I updated our retirement projections for the last two years, continuing to use my standard assumption for claiming at age 70.
But this year, the details started to matter.
<hr>
<h2>What changed? </h2>
Two significant changes made a bigger impact than I realized.  First, I’m now 54 (my husband is 57), and have entered the timeframe where the details matter.
When someone is within ten years of age 62—the earliest you can claim benefits—I stop using rough estimates. That’s when I switch to detailed calculations based on actual earnings history and projected work years.
I diligently entered my earnings history and projected earnings from now through age 70 into <a href="https://www.covisum.com/solutions/social-security-timing" target="_blank" rel="noopener">Social Security Timing</a>, my preferred advisor-facing software package for this function.
Second, I got married, and my husband will only have 10 years of work history that will “count” toward Social Security.  Unlike in the past, I had to figure out how to handle my husband’s earnings. He’s self-employed and will barely log ten years of U.S. work history before his Full Retirement Age (FRA), which is 67.
<hr>
<h2>How Social Security calculates your benefits</h2>
It’s worth taking a brief detour in my story to explain how Social Security calculates your benefits:
<ol>
<li>Take your highest 35 years of earnings.</li>
<li>Index them to inflation, resulting in AIME (Average Indexed Monthly Earnings).</li>
<li>Run AIME through the <a href="https://www.ssa.gov/oact/cola/bendpoints.html" target="_blank" rel="noopener">bend points</a> for the year you reach age 62. This calculates a monthly benefit amount called your Primary Insurance Amount (PIA). (See graphic for detail on bend points – uses 2022 data – however, they are indexed to inflation each year.)</li>
<li>Post age 62, your PIA increases based on the annual Cost of Living Adjustment (COLA).</li>
<li>After age 62, new earnings aren’t inflation-indexed for the AIME—but if they’re higher than one of your lowest 35 years, they can still boost your benefit.</li>
</ol>
Based on the numbers, my husband’s earnings weren’t likely to generate a retirement benefit larger than his spousal benefit. Even with ten years of work, he’d still have 25 years of zeroes in his record.
<figure id="attachment_16363" aria-describedby="caption-attachment-16363" style="width: 900px" class="wp-caption aligncenter"><a href="https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/HowSocialSecurityCalculatesYourBenefit.png"><img loading="lazy" decoding="async" class="size-full wp-image-16363" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/HowSocialSecurityCalculatesYourBenefit.png" alt="" width="900" height="568" srcset="https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/HowSocialSecurityCalculatesYourBenefit.png 900w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/HowSocialSecurityCalculatesYourBenefit-300x189.png 300w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/HowSocialSecurityCalculatesYourBenefit-768x485.png 768w" sizes="auto, (max-width: 900px) 100vw, 900px" /></a><figcaption id="caption-attachment-16363" class="wp-caption-text">A graphic explaining how Social Security calculates your benefits.</figcaption></figure>
<hr>
<h2>How spousal benefits work</h2>
If you’ve been married for at least one year, you may be eligible for a spousal benefit of up to 50% of your spouse’s FRA benefit—if you claim at your FRA or later. You’ll receive whichever is higher: your own benefit or the spousal. Not both.
<ul>
<li>Note: FRA is age 67 for anyone born Jan. 2, 1960, or later. Survivor benefits use a different FRA. Don’t confuse the two!</li>
<li>Note: Spousal benefits don’t grow past FRA and are reduced if claimed before FRA.</li>
<li>Note: To claim a spousal benefit, you and your spouse must both be age 62, and your spouse must have filed for their benefits before you are eligible for a spousal benefit.</li>
<li>Note: Divorced? If you were married 10+ years and remain unmarried, you may be eligible for an ex-spouse benefit. (Different rules apply.)</li>
</ul>
In our case, we only need to focus on the spousal benefit rules. But I can’t stress this enough: there are distinct—and often confusing—rules for each benefit type. Here’s a quick breakdown:
<ul>
<li>Retirement benefits – Based on your own earnings record.</li>
<li>Spousal benefits – Based on your spouse’s record. You must be age 62+, and your spouse must have filed.</li>
<li>Divorced spouse benefits – Available if you were married 10+ years and remain unmarried. Your ex does not need to file first.</li>
<li>Survivor benefits (current spouse passes away) – You must have been married at least 9 months. Can claim as early as age 60. Different FRA applies. Can switch later to your own benefit.</li>
<li>Ex-Spouse Survivor benefits (divorced & ex-spouse passes away) – Available if the marriage lasted 10+ years and you were not remarried before age 60. Switching options also apply.</li>
<li>Disability benefits – Eligibility based on medical condition and work credits.</li>
<li>Benefits for dependents – May apply if you have a child under age 18, disabled, or still in school.</li>
</ul>
If you are in any of these situations, don’t assume the rules that apply to one benefit type are universal. There are nuances to each benefit type. I’ve captured only the highlights in my list above.
<hr>
<h2>Our Recommended Claiming Strategy</h2>
Back to my story…so what did the software recommend based on my earnings alone?
Claim at 67.
I stared at the screen.
This can’t be right.
What about maximizing survivor benefits? What about longevity risk? I used life expectancies of 90 for each of us, which, in this software package, impacts the calculations.
Perturbed, I bumped life expectancy to 95 for each of us. It moved my recommendation out one year – to 68.
“What?” my brain exclaimed. “What assumptions get me to my planned age 70 claiming?”
<h2>Inflation and Return Assumptions</h2>
I began experimenting with assumptions, such as the assumed annual inflation rate (currently 2.4%) and the assumed real rate of return (currently 2.55%, based on Treasury data). Both of these inputs impact the projections and recommendations.
The real rate of return is what you expect to earn—safely—above inflation. Add that to the inflation rate, and that would be the total investment return you might expect – in this example, 4.95% (2.4 + 2.55).
The real rate of return is used to take the future cash flows expected from Social Security and turn them into a present value number – essentially what lump sum would you have to have, earning a real rate of return of 2.55% or more, that would deliver the same cash flows as Social Security. That lump sum view allows you to compare claiming strategies on an apples-to-apples basis in today’s dollars. In our case, changing these assumptions did not change my recommended strategy.
Here’s why.
<hr>
<h2>Spousal Benefits and Age Intersect</h2>
I’m the higher earner—but not the older spouse. At 67, my FRA, my husband can claim a spousal benefit – and even if we live a long, long time, the extra monthly amount we get by me delaying until 70 doesn’t make up for the three years where he gets nothing if I delay until age 70.
While I understood the math, I still felt incredulous. Naturally, I ran a second analysis—nerd mode fully engaged.
I went over to <a href="https://opensocialsecurity.com/" target="_blank" rel="noopener">Open Social Security</a>, a free online program, to run the numbers there.  (Fritz provides a detailed analysis of this tool and how he used it in his post on <a href="https://www.theretirementmanifesto.com/how-to-determine-when-to-claim-social-security/" target="_blank" rel="noopener">How to Determine When to Claim Social Security</a>.)
And it got even more complicated!
<h2>Open Social Security</h2>
At Open Social Security, when the answers initially didn’t make sense, I discovered a tiny box at the top that says “Click here to hide the selection list.” I clicked it and it opened an expanded list of options, where I could then click “still working.” 
Then I entered our PIA, the approximate month we’ll stop working, and our monthly earnings until the month we retire. (I don’t like that I can’t input actual earnings into this package. It’s fine for a ballpark estimate, but not great for people with complex earnings trajectories.)
The recommended strategy? I claim at 66 and 8 months, and my husband at 69 and 6 months.
Hmmmmm…  
<hr>
<h2>The Earnings Limit</h2>
At 66, I will still be subject to the <a href="https://www.sensiblemoney.com/learn/dont-get-pinged-by-the-social-security-earnings-limit/" target="_blank" rel="noopener">earnings limit</a>, which reduces your benefit if you claim before FRA and earn more than the annual adjusted limit.
I turn 66 in May 2037. I would be 66 for 7 months that year. If I claimed at 66, my benefits would be reduced $1 for every $2 earned over the limit for the 2037 calendar year.
However, Social Security uses two earnings limits—one for years before FRA, and a higher one for the calendar year you attain FRA.
In your FRA calendar year, a higher earnings limit applies, and only earnings before the month you reach FRA are counted. At 66 and 8 months (2038), I will be within the calendar year where I reach my FRA – so a higher earnings limit applies, and only earnings before FRA count. So, technically, I could start benefits a few months before my FRA and would not be subject to the earnings limit for those few months. But just because I could, doesn’t mean I should. I would be quite reluctant to claim any time before FRA.
<hr>
<h2>Why Different Recommendations?</h2>
So why did the two tools offer recommendations that differ by four months? I’ve gone down this rabbit hole before. It usually comes down to how each software calculates present value. This time, I chose not to investigate.
Instead, I was deep in calculation frenzy (like shark frenzy for nerds in spreadsheet mode), so I went back to Social Security Timing, where I tested different earnings scenarios to see when my husband might qualify for a benefit of his own.
If he earns enough, the recommended strategy changes – he should claim at 67, receiving his retirement benefit. I would claim at 70, maximizing my retirement and survivor benefit. And when I claim at 70, he instantly becomes eligible for a spousal benefit, which would be more than his retirement benefit, so he would begin receiving what I call a spousal “top-off payment” to level-up his benefit amount to the full spousal amount.
Basically, you get your retirement benefit or the spousal benefit – whichever is more. If the spousal amount is more, the calculation pays your benefit first, and then the difference is added as the spousal amount. I call it a “top off”.
<hr>
<h2>What’s On the Line</h2>
The difference between best and worst (claiming as early as possible) strategies was $200,000 in terms of present value, assuming I live to 95. That’s a lot of money on the line.
However, as we delved into nuances, such as claiming ages of 67 or 70, the differences in outcomes became smaller. Perhaps $30,000, $40,000, or up to $80,000 is at stake. Still not pocket change.
There is real money at stake in this decision.
So, what will we decide?
<hr>
<h2>The Unique Characteristic You Can’t Get Anywhere Else</h2>
We have a decade before my husband’s FRA – so we have time to figure it out.
But most likely – I’ll delay until 70.
Why?
Retirement comes with risks—and not everything can be measured with a rate-of-return lens. What if I live to 100? In my mind, I’ve always planned to. Social Security provides lifelong inflation-adjusted income – a unique characteristic you can’t get from investments or anywhere else.
Essentially, Social Security becomes a unique puzzle piece in our plan—doing what no other investment can.
People who claim early to “invest the difference” are missing this point entirely. They are also frequently neglecting to factor in the value of future inflation adjustments, taxation, their own future cognitive abilities to maintain an investment program, and, if married, the value of the survivor benefit using joint-life expectancy odds.  
<h2>What About the System Running Out?</h2>
The annual Social Security Trustees report has just been released, and headlines are vying for our attention with claims of Social Security’s impending “insolvency.” I see frequent queries in retirement planning chat groups from people considering claiming at 62—because they fear that if they don’t, they’ll get nothing.
It doesn’t work this way. In the software, I can click a button that implements a 21% benefit cut. And guess what? It doesn’t change the recommendation. Because if you delayed, you’re still getting 79% of a larger number. And that number is still going up with inflation, and providing a unique benefit that no other asset can provide.
I don’t know what is going to happen – but I do fear Congress will wait too long to act. In the 80’s the system was facing imminent insolvency – potentially a few months of benefit payments remaining. You can read an excellent overview of it – and a comparison to what is going on today at <a href="https://www.congress.gov/crs-product/R47040">Congress.gov</a>.
I do believe the system is a success and should continue. And I do believe we should all tell our representatives we’d like them to prioritize this now – and not procrastinate a day longer.
<hr>
<h2>Conclusion:  My Take-Away</h2>
This whole experience reminded me that rules of thumb don’t cut it as you approach retirement.
While reporters love simple axioms—Social Security and “simple” don’t belong in the same sentence.
As you’re planning for retirement, don’t finalize your Social Security claiming strategy without doing your research. Don’t let the headlines scare you into making a poor decision.  Also, recognize that spousal benefits can make a big difference in when you claim, and there’s serious money at stake in the decision.
I thought I had it all figured out, but then I got married, and the spousal benefits impact was more significant than I realized.
Learn from my experience.
Do your homework, then do it again.
Continue to refine your numbers as you get closer to your claim date.  Determining when to claim your Social Security is an important decision.  Take the time to understand your options before you finalize your plan.
 
Your Turn:  What age are you planning on claiming Social Security?  What lessons have you learned about spousal benefits, and did they impact your claiming decision?  Let’s chat in the comments…
<hr>
PS: Dana in the Wild
For podcast fans, I was recently on two podcasts that may be of interest: 
<ul>
<li>Stacking Benjamins’s June session on <a href="https://www.stackingbenjamins.com/create-your-retirement-spending-plan-1698/" target="_blank" rel="noopener">Carving Out a Robust Retirement Spending Plan</a>. Watch out – my fellow guests began debating risk management techniques. Interesting discussion, but a tad technical at times.</li>
<li>Inspired Money’s June episode on <a href="https://podcasts.apple.com/us/podcast/retirement-income-strategies-maximizing-returns-for/id1278174903?i=1000711588386" target="_blank" rel="noopener">Retirement Income Strategies: Maximizing Returns for Peace of Mind</a>. I take issue with the title of this episode, but it was a great convo, including incredibly insightful statements from one of my favorites in the industry – Roger Whitney of Rock Retirement. </li>
</ul>
The post <a href="https://www.theretirementmanifesto.com/how-social-security-spousal-benefits-may-change-my-claim-date/">How Social Security Spousal Benefits May Change My Claim Date</a> appeared first on <a href="https://www.theretirementmanifesto.com">The Retirement Manifesto</a>.
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<post-id xmlns="com-wordpress:feed-additions:1">16362</post-id> </item>
<item>
<title>My Biggest Surprise in Retirement</title>
<link>https://www.theretirementmanifesto.com/my-biggest-surprise-in-retirement/?utm_source=rss&utm_medium=rss&utm_campaign=my-biggest-surprise-in-retirement</link>
<comments>https://www.theretirementmanifesto.com/my-biggest-surprise-in-retirement/#comments</comments>
<dc:creator><![CDATA[Fritz Gilbert]]></dc:creator>
<pubDate>Thu, 12 Jun 2025 08:12:36 +0000</pubDate>
<category><![CDATA[Retirement]]></category>
<category><![CDATA[asset allocation]]></category>
<category><![CDATA[financial independence]]></category>
<category><![CDATA[financial planning]]></category>
<category><![CDATA[Personal finance]]></category>
<category><![CDATA[retirement planning]]></category>
<category><![CDATA[retirement savings]]></category>
<guid isPermaLink="false">https://www.theretirementmanifesto.com/?p=16298</guid>
<description><![CDATA[Surprise! Fritz here.  I know I said I was retiring from full-time blogging, but we’ve just started a two-month home expansion project (a 700 sq ft addition), and our house […]
The post <a href="https://www.theretirementmanifesto.com/my-biggest-surprise-in-retirement/">My Biggest Surprise in Retirement</a> appeared first on <a href="https://www.theretirementmanifesto.com">The Retirement Manifesto</a>.
]]></description>
<content:encoded><![CDATA[Surprise! Fritz here. 
I know I said I was <a href="https://www.theretirementmanifesto.com/im-retiring-from-full-time-blogging/" target="_blank" rel="noopener">retiring from full-time blogging</a>, but we’ve just started a two-month home expansion project (a 700 sq ft addition), and our house is a construction zone.  My <a href="https://www.theretirementmanifesto.com/the-treehouse-writing-studio/" target="_blank" rel="noopener">treehouse writing studio</a> is an oasis from the chaos, so I’ve had some time to write.  Here’s what our front hallway looks like at the moment (you can see why I’m <del>hiding</del> writing in my studio):
<img loading="lazy" decoding="async" class="alignnone size-full wp-image-16319" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/PXL_20250602_205430605-scaled-e1748983137714.jpg" alt="" width="400" height="533">
PS: You can watch the project’s progress on my <a href="https://www.instagram.com/the_retirement_manifesto/" target="_blank" rel="noopener">Instagram</a> or <a href="https://www.facebook.com/TheRetirementManifesto" target="_blank" rel="noopener">Facebook</a> account, if interested. 
Anyway….on to the post.  
<hr>
<h1>My Biggest Surprise in Retirement</h1>
If you’re a long-time reader, you know how much I planned for retirement.
That planning paid off.
My transition into retirement went smoothly (check out my <a href="https://www.theretirementmanifesto.com/what-the-first-week-of-retirement-is-really-like/" target="_blank" rel="noopener">Retirement Reality Series,</a> where I journaled through the transition), and I’ve enjoyed the last 7 years more than any period in my life.
And yet, there’s one financial element that caught me by surprise.
Today, I’m sharing it with you.
I suspect you’ll be surprised, too…
<hr />I planned well for retirement, but this one financial element caught me by surprise. <a href='https://twitter.com/intent/tweet?url=https%3A%2F%2Fwww.theretirementmanifesto.com%2Fmy-biggest-surprise-in-retirement%2F&text=I%20planned%20well%20for%20retirement%2C%20but%20this%20one%20financial%20element%20caught%20me%20by%20surprise.&via=retiremanifesto&related=retiremanifesto' target='_blank' rel="noopener noreferrer" >Share on X</a> <hr />
<img loading="lazy" decoding="async" class="alignnone size-full wp-image-16303" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/Screenshot-2025-06-03-1.19.19-PM.png" alt="" width="419" height="668" srcset="https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/Screenshot-2025-06-03-1.19.19-PM.png 419w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/Screenshot-2025-06-03-1.19.19-PM-188x300.png 188w" sizes="auto, (max-width: 419px) 100vw, 419px" />
<hr>
<h1>My Biggest Surprise in Retirement</h1>
I’m fortunate to have saved aggressively in my company’s 401(k) since I started my career at Age 22.
It’s what allowed me to retire at Age 55.
And yet, like many folks my age, those savings were predominantly in “Before-Tax” accounts in my company’s 401(k) plan.  Sure, I got the tax break while working, and I felt like a genius. Besides, we didn’t have the option of investing in a Roth, so the decision was easy. 
I knew those taxes would come due when I “got old,” but I’d worry about that later.
Later has arrived.  
As I shared in my <a href="https://www.theretirementmanifesto.com/our-retirement-investment-drawdown-strategy/" target="_blank" rel="noopener">Retirement Drawdown Strategy</a>, when I retired, we had 56% of our retirement savings in Before-Tax accounts, as shown below:
<img loading="lazy" decoding="async" class="alignnone size-full wp-image-4465" src="https://www.theretirementmanifesto.com/wp-content/uploads/2017/06/Tax-Allocation.png" alt="" width="607" height="380" srcset="https://www.theretirementmanifesto.com/wp-content/uploads/2017/06/Tax-Allocation.png 607w, https://www.theretirementmanifesto.com/wp-content/uploads/2017/06/Tax-Allocation-300x188.png 300w" sizes="auto, (max-width: 607px) 100vw, 607px" />
<hr>
<h2>The Golden Age of Roth Conversions</h2>
Now that I’m retired, I’ve been laser-focused on doing annual Roth conversions to reduce that Before-Tax balance. As I wrote in <a href="https://www.theretirementmanifesto.com/the-golden-age-of-roth-conversions/" target="_blank" rel="noopener">The Golden Age of Roth Conversions</a>, it makes sense to do Roth conversions in your early retirement years (be careful if you’re getting ACA subsidies, and ugly Aunt IRMAA can be a problem if you’re 63 or older).  I won’t rehash the arguments for why; you can read about it in the linked article.
My goal is to manage the taxes on my terms, rather than being “forced” into whatever the Required Minimum Distributions rule requires in my 70s.  I’d also like to get as much of that money converted into a Roth for the benefit of my wife, in the event I die early (she’d pay higher taxes as a single tax filer vs. our current “Married Filing Jointly” status). For now, I’m playing the tax bracket “stuffing” game (topping off my selected tax bracket with Roth conversions) and trying to be smart about minimizing the taxes I pay throughout my retirement.
The Bad News: The Roth conversions are not making as much of a difference as I had hoped.
And that, in summary, is my biggest surprise.
<hr>
My Biggest Surprise in Retirement:  It’s Hard To Reduce Your Pre-Tax Account Balance!
We’ve all heard about the power of compounding and how valuable it is in personal finance.  If you want a refresher, check out my post, <a href="https://www.theretirementmanifesto.com/15-building-block-ii-the-most-powerful-force-in-the-universe/" target="_blank" rel="noopener">“The Most Powerful Force in the Universe.” </a>
What I didn’t think about, and only realized after I retired and started doing Roth conversions, is the fact that compounding makes it difficult to reduce your pre-tax account balance.
Despite doing aggressive Roth conversions, our pre-tax balance isn’t coming down like I expected!
In fairness, part of that “problem” is driven by above-average returns since my retirement in 2018.  First world problem, I know.  But it’s still been a big surprise.
Let’s do a hypothetical example to demonstrate the point.  
To make the math easy, let’s say you have $1M in your pre-tax account, and your first full year of retirement is 2019.  If you had that entire $1M in stocks, here’s what would have happened without doing any Roth conversions (S&P 500 returns from <a href="https://ycharts.com/indicators/sp_500_total_return_annual" target="_blank" rel="noopener">ycharts</a>, including dividends):
<img loading="lazy" decoding="async" class="alignnone size-full wp-image-16305" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/Screenshot-2025-06-03-1.31.50-PM-1.png" alt="" width="515" height="177" srcset="https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/Screenshot-2025-06-03-1.31.50-PM-1.png 515w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/Screenshot-2025-06-03-1.31.50-PM-1-300x103.png 300w" sizes="auto, (max-width: 515px) 100vw, 515px" />
In this example, a $1M portfolio would have grown to $2.6M in 6 short years.  That’s the power of compounding. Amazing!
Let’s modify the above example, and say you’re doing an annual Roth conversion of $50k. 
How much impact would Roth conversions make? Not much…
<img loading="lazy" decoding="async" class="alignnone size-full wp-image-16308" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/Screenshot-2025-06-03-1.41.00-PM.png" alt="" width="616" height="180" srcset="https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/Screenshot-2025-06-03-1.41.00-PM.png 616w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/Screenshot-2025-06-03-1.41.00-PM-300x88.png 300w" sizes="auto, (max-width: 616px) 100vw, 616px" />
Despite doing annual Roth conversions of $50k, the pre-tax value has still doubled, to $2.15 M!
<hr>
A More Realistic Scenario – $500k 
Ok, I hear you.  No one has $1M in their pre-tax account.  I got your attention, though, right?
Fair enough, let’s assume the starting balance is $500k (which compares nicely with the <a href="https://www.investopedia.com/401k-balance-60-year-old-11678393" target="_blank" rel="noopener">average 401(k) balance of $573k</a> for folks in their 60’s):
<img loading="lazy" decoding="async" class="alignnone size-full wp-image-16309" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/Screenshot-2025-06-03-1.44.11-PM.png" alt="" width="616" height="180" srcset="https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/Screenshot-2025-06-03-1.44.11-PM.png 616w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/Screenshot-2025-06-03-1.44.11-PM-300x88.png 300w" sizes="auto, (max-width: 616px) 100vw, 616px" />
The problem remains.
With a $500k starting balance and $50k annual Roth conversions, the account has still grown by $357k (to $857k), or 71%.
Bottom Line:  It’s difficult to reduce your pre-tax account balance due to the power of compound interest.
In fact, the only way to reduce your pre-tax account is to do annual Roth conversions in excess of the annual return generated by the pre-tax portion of your portfolio.  Sticking with the $500k example, an average annual Roth conversion of $89k would have been required to maintain the pre-tax balance at $500k, as shown below:
<img loading="lazy" decoding="async" class="alignnone size-full wp-image-16312" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/Screenshot-2025-06-03-3.52.03-PM.png" alt="" width="617" height="192" srcset="https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/Screenshot-2025-06-03-3.52.03-PM.png 617w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/Screenshot-2025-06-03-3.52.03-PM-300x93.png 300w" sizes="auto, (max-width: 617px) 100vw, 617px" />
(Note:  you could argue about my $0 Roth conversion in a down year, but it’s just an example.  Quit whining and do your own math – wink.)
<hr>
What About A 60/40 Portfolio @ $500k?
No one has a 100% stock portfolio in their pre-tax accounts, right?  Let’s see what things look like if our retiree had a 60/40 stock/bond allocation in their pre-tax accounts.  We’ll use the S&P 500 for stocks, and Vanguard’s Total Bond Market Index Fund (VBMFX) for bonds, we can find their annual returns <a href="https://finance.yahoo.com/quote/VBMFX/performance/" target="_blank" rel="noopener">here.</a>
Without any Roth conversions, the account would have grown from $500k to $990k, as shown below:
<img loading="lazy" decoding="async" class="alignnone size-full wp-image-16328" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/Screenshot-2025-06-04-12.38.08-PM.png" alt="" width="741" height="180" srcset="https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/Screenshot-2025-06-04-12.38.08-PM.png 741w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/Screenshot-2025-06-04-12.38.08-PM-300x73.png 300w" sizes="auto, (max-width: 741px) 100vw, 741px" />
Add in our $50k/year of Roth conversions, and the ending balance is $609k, an increase of 22%:
<img loading="lazy" decoding="async" class="alignnone size-full wp-image-16315" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/Screenshot-2025-06-03-3.59.48-PM.png" alt="" width="844" height="222" srcset="https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/Screenshot-2025-06-03-3.59.48-PM.png 844w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/Screenshot-2025-06-03-3.59.48-PM-300x79.png 300w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/Screenshot-2025-06-03-3.59.48-PM-768x202.png 768w" sizes="auto, (max-width: 844px) 100vw, 844px" />
Bottom Line:  Even with a 40% bond allocation, it’s difficult to reduce your pre-tax balance via Roth conversions.
We’ve done aggressive Roth conversions every year, yet I continue to be frustrated by how little we’ve moved the needle.  In full transparency, we’ve reduced it, but only by 15% of its starting value.  That’s far less than I would have expected, given the size of the conversions we’ve done. 
I’m grateful, as I realize this “problem” is a result of a strong market through my first 7 years of retirement, but I still worry about those darned RMD’s.  Perhaps <a href="https://www.theretirementmanifesto.com/what-if-stocks-only-rise-3/" target="_blank" rel="noopener">a decade of 3% returns</a> will help, but that’s not the type of help I had in mind.  (BTW, that article, written in Jan 2025, seems a bit prophetic now…)
<hr>
A Note About Asset Allocation “Location”
This is a reasonable place to mention which assets should be held in which type of tax-structured account.
One of the more advanced techniques (“tweaking”, some would say) for optimizing your portfolio is Asset Location Optimization, which focuses on putting certain assets in certain tax buckets to optimize after-tax returns.  For example, since bond income is taxed at your nominal tax rate, it’s best to hold them in your Before-Tax accounts (which are taxed at your nominal rate when doing a Roth conversion/RMD/withdrawal).  Compare that to stocks, which are best in your Roth, where the higher growth is tax-free.
Below is a chart summarizing the concept (I discuss this in more detail <a href="https://www.theretirementmanifesto.com/our-retirement-investment-drawdown-strategy/" target="_blank" rel="noopener">here</a>):
<img loading="lazy" decoding="async" class="alignnone size-full wp-image-4470" src="https://www.theretirementmanifesto.com/wp-content/uploads/2017/06/Tax-location.png" alt="" width="449" height="269" srcset="https://www.theretirementmanifesto.com/wp-content/uploads/2017/06/Tax-location.png 449w, https://www.theretirementmanifesto.com/wp-content/uploads/2017/06/Tax-location-300x180.png 300w" sizes="auto, (max-width: 449px) 100vw, 449px" /> 
When my investments were in a 401(k), the plan rules didn’t allow me to shift assets between account types, so I held the same asset allocation in both my pre-tax and Roth 401(k).  One of the main reasons I said <a href="https://www.theretirementmanifesto.com/saying-goodbye-to-the-401k/" target="_blank" rel="noopener">“Goodbye to my 401(k)” </a>was to give flexibility to move asset classes within different tax-structured accounts per the above chart, which I’ve been doing since closing the 401(k) in mid-2022.
A note on nomenclature: “After-Tax” and “Taxable” are the same names for funds held in a taxable account (e.g., brokerage), and “Before-Tax” and “Pre-Tax” are the same names for funds deducted from your annual income when contributed (e.g., 401k or Traditional IRA).
<hr>
Our Asset Allocation By Account Type:
As the table below demonstrates, while our overall portfolio is 66% stocks, our Roth allocation is 96% stocks (you want the highest growth in your tax-free account).  Compare that to bonds, where our overall portfolio holds 16%, but our pre-tax bond allocation is 34% (you want bonds in pre-tax, where they’ll be taxed at your marginal rate).  It’s not a perfect implementation of the table above, but we’re moving in that direction.
<img loading="lazy" decoding="async" class="alignnone size-full wp-image-16324" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/Screenshot-2025-06-04-11.45.20-AM.png" alt="" width="529" height="143" srcset="https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/Screenshot-2025-06-04-11.45.20-AM.png 529w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/Screenshot-2025-06-04-11.45.20-AM-300x81.png 300w" sizes="auto, (max-width: 529px) 100vw, 529px" />
I should note that most of the 25% “Alternative” allocation in our pre-tax is in a REIT, which is similar to bonds from a tax perspective.  I hope the lower allocation to stocks in our pre-tax account (44%) will help reduce the power of compounding and allow us to draw down the pre-tax balance more effectively via future Roth conversions.
A note about the taxable allocations:  the 25% “Alternative” in our taxable account represents our <a href="https://www.theretirementmanifesto.com/why-we-just-bought-a-second-home-in-retirement/" target="_blank" rel="noopener">second home in Alabama</a>, which we include in our “spendable” assets since we could sell the property, if necessary, to fund retirement needs. Also, our taxable account’s 16% bond allocation is held primarily in tax-free municipal bonds.
<hr>
The Difficulty of Covering The Tax Burden
A note about how to cover the tax burden associated with Roth conversions is in order.
To make the best use of Roth conversions, it’s best to cover the tax burden with taxable funds (rather than using some of the pre-tax money to cover the taxes).  This maximizes the amount of money you’re moving into the Roth, rather than “diverting” some of those funds for taxes.
Sounds great in principle, but the second part of my “biggest surprise in retirement” is how much after-tax cash gets consumed paying those taxes on the Roth conversions.  I always knew the tax would come due, but I didn’t realize how painful it would be. I’m committed to paying taxes with after-tax money to maximize the value of the Roth conversion, but it takes a lot of cash.
As you’re planning for your retirement, do not overlook the tax burden.
Every quarter, I wince as I send Uncle Sam my Estimated Quarterly Tax payment.  I’ve enjoyed the benefits of tax deferral for 4 decades, but we can’t avoid the taxman forever.  I’ve sized Bucket 1 in my <a href="https://www.theretirementmanifesto.com/how-to-build-a-retirement-paycheck/" target="_blank" rel="noopener">Bucket Strategy</a> accordingly, and we’re doing fine.  But the impact of those taxes is easy to miss in your pre-retirement planning.
I take some solace in the fact that we’re (hopefully) being smart in managing our Roth conversions, and the result should be a lower tax burden throughout our retirement.  
Pay them now, or pay them later.
The one fact is…you will pay those taxes.
No surprise there.
<hr>
Conclusion
There you have it.  My biggest surprise in retirement is how difficult it’s been to reduce our pre-tax account balance despite aggressive annual Roth conversions.  I realize that’s primarily due to the power of compounding in a strong market, but it’s still been a surprise. Also, I knew the increased tax burden would consume a lot of cash, but “knowing it” and “living it” are two different things.
Dealing with drawing down your pre-tax accounts is a surprise you should be prepared for as you plan for retirement. 
It’s not as easy as you think.
Don’t be surprised.
<hr>
That’s it for now…time to head back inside and face the home expansion chaos.
Your Turn:  If you haven’t yet retired, have you included tax impacts in your spending forecasts?  If you’ve already retired, are you facing the same surprise that I am?  Finally, would you be interested in an article about our home expansion project? Let’s chat in the comments…
The post <a href="https://www.theretirementmanifesto.com/my-biggest-surprise-in-retirement/">My Biggest Surprise in Retirement</a> appeared first on <a href="https://www.theretirementmanifesto.com">The Retirement Manifesto</a>.
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<item>
<title>Retirement – My Journey From “No, Never” to “Maybe One Day”</title>
<link>https://www.theretirementmanifesto.com/retirement-my-journey-from-no-never-to-maybe-one-day/?utm_source=rss&utm_medium=rss&utm_campaign=retirement-my-journey-from-no-never-to-maybe-one-day</link>
<comments>https://www.theretirementmanifesto.com/retirement-my-journey-from-no-never-to-maybe-one-day/#comments</comments>
<dc:creator><![CDATA[Dana Anspach]]></dc:creator>
<pubDate>Thu, 05 Jun 2025 09:14:05 +0000</pubDate>
<category><![CDATA[Retirement State of Mind]]></category>
<category><![CDATA[Semi-Retirement]]></category>
<category><![CDATA[financial planning]]></category>
<category><![CDATA[retirement planning]]></category>
<guid isPermaLink="false">https://www.theretirementmanifesto.com/?p=16278</guid>
<description><![CDATA[When Fritz and I agreed to this experiment, we had no idea what to expect. Who knew my sparkle bomb of an idea (sharing my own thoughts on retirement on […]
The post <a href="https://www.theretirementmanifesto.com/retirement-my-journey-from-no-never-to-maybe-one-day/">Retirement – My Journey From “No, Never” to “Maybe One Day”</a> appeared first on <a href="https://www.theretirementmanifesto.com">The Retirement Manifesto</a>.
]]></description>
<content:encoded><![CDATA[When Fritz and I agreed to this experiment, we had no idea what to expect. Who knew my sparkle bomb of an idea (sharing my own thoughts on retirement on this blog) would, well, set off so many sparkles! Thank you for the warm welcome in the comments. I look forward to continuing the journey with all of you.
As I said in <a href="https://www.theretirementmanifesto.com/a-new-chapter-for-the-retirement-manifesto/">our initial post</a>, I want to share how my personal thoughts on retirement shifted from “Nope, Never” to “Maybe One Day.” It may sound subtle, but to me, it was seismic.
<hr />I never thought I'd retire. Then...I took a vacation and had an awakening. <a href='https://twitter.com/intent/tweet?url=https%3A%2F%2Fwww.theretirementmanifesto.com%2Fretirement-my-journey-from-no-never-to-maybe-one-day%2F&text=I%20never%20thought%20I%27d%20retire.%20Then...I%20took%20a%20vacation%20and%20had%20an%20awakening.&via=retiremanifesto&related=retiremanifesto' target='_blank' rel="noopener noreferrer" >Share on X</a> <hr />
Here’s how it happened…
<hr>
<img loading="lazy" decoding="async" class="alignnone size-full wp-image-16290" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/Screenshot-2025-06-02-2.32.53-PM.png" alt="" width="442" height="669" srcset="https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/Screenshot-2025-06-02-2.32.53-PM.png 442w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/Screenshot-2025-06-02-2.32.53-PM-198x300.png 198w" sizes="auto, (max-width: 442px) 100vw, 442px" />
<hr>
<h2>A Personal Awakening</h2>
I love…
<ul>
<li>…accomplishing things.</li>
<li>…growing my company.</li>
<li>…contributing to my profession.</li>
<li>…mentoring those new to the financial planning career.</li>
</ul>
Give me three days off, and I’m itching to return to work.
That’s why this vacation was different. It was day 13, and I hadn’t been bored yet. We were in Beaver Creek, CO, where we got married. It’s my favorite mountain town.
Until this vacation, when people asked about my retirement plans, I’d casually say I planned to work until 70. But it wasn’t a carefully thought-out plan. It was simply the only path I could see.
Then, at 53, on that vacation, I experienced what a joyful retirement might feel like: a life centered around nature, health, and writing. Writing fills me with joy — when I can do it at a reasonable pace, not squeezed between emails, financial statements, and Zoom meetings.
Suddenly, retirement wasn’t a vague checkbox I advised others to prepare for—it was something I could see for myself one day. Not a fully formed picture.… but like being in a room with the light off and then a dimmer switch turns on, casting just enough glow to glimpse a path forward.
<ul>
<li>Pre-awakening:  The logic was clear: I was supposed to save and plan for retirement. And, since I help others do that, I didn’t want to be a hypocrite.</li>
<li>Post-awakening: I was no longer planning for retirement out of obligation — I can see it one day. My future no longer felt like a murky unknown—it felt like something I could shape.</li>
</ul>
Here’s our Sept 2023 wedding photo from the top of the ski lift in Beaver Creek.
<figure id="attachment_16279" aria-describedby="caption-attachment-16279" style="width: 300px" class="wp-caption alignnone"><a href="https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/176-scaled.jpg"><img loading="lazy" decoding="async" class="size-medium wp-image-16279" src="https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/176-300x200.jpg" alt="Beaver Creek, CO Wedding Photo" width="300" height="200" srcset="https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/176-300x200.jpg 300w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/176-1024x683.jpg 1024w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/176-768x512.jpg 768w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/176-1536x1024.jpg 1536w, https://www.theretirementmanifesto.com/wp-content/uploads/2025/06/176-2048x1365.jpg 2048w" sizes="auto, (max-width: 300px) 100vw, 300px" /></a><figcaption id="caption-attachment-16279" class="wp-caption-text">Dana’s favorite place in the mountains.</figcaption></figure>
<hr>
<h2>What Shape Will I Shape?</h2>
As I spent time thinking about the retirement I wanted to design, and how I would achieve it, a few things became clear:
1) I Can’t Go from 100 to Zero
Work full time – then stop all at once? No, such an abrupt transition doesn’t suit me. I must begin weaving in more time off now. That means planning more vacations, remote work weeks from Colorado, and learning to take weekends and holidays off like a normal person – weaning myself from the “always on” mindset of an entrepreneur. This is easier said than done.
2) I Work for Fun—So I Need More Fun
When I don’t have anything else exciting planned, I work. Because for me, my work is fun. So, the only way to scale back is to deliberately add other joyful experiences to my calendar. The first step? My husband and I booked a bucket-list hike along the Mont Blanc circuit in the Alps, spanning France, Italy, and Switzerland. We’ll hike about 99 miles over twelve days this summer.
3) I’m Not Building to Sell—I’m Here for the Journey
I needed more clarity around what I want from my eventual succession plan. Some business owners build to sell for maximum enterprise value. That’s never been my path. I’m building future generations of financial planners who will become owners of the firm. Two already have. This gives me something more valuable: maximum life satisfaction value. How do I continue to use this metric as my compass?
4) I Want a Long, Gradual Transition
I need to communicate to my team that I’m looking for shared responsibility. My goal is to scale down gradually over the next sixteen years. Yes—sixteen. It’s a long ramp, but it feels right for me. Each year, I must identify key tasks, determine who can take them over, train them as needed, and then I must let go of that item. 
That clarity I found gave me energy.
Energy is a good sign that you’re headed in the right direction.
<hr>
<h2>My Pre-Go Phase Begins  (And Go-Go Starts Now, Too)</h2>
With my newfound clarity, I began working on a new book, which I hope to release this fall.
It’s called Living Off Your Acorns: Your Guide to the Four Phases of Retirement. It covers the mindset and financial shifts that happen in each phase: Pre-Go, Go-Go, Slow-Go, and No-Go.
When does each phase begin? It’s different for each of us.
My Pre-Go phase began on that vacation, when the light went on. While this phase typically spans the five to ten years before retirement, I realized I would need to overlay mine with the Go-Go phase—which for those with a more abrupt path to retirement, typically occurs during the first five to ten years of retired life.
If I don’t overlap mine with my current working years, I’ll reach 70 without having done many of the things I dream about. And at 70, my window to do them will be shorter. So I’m layering in my Go-Go experiences now. This is my path. And I’m intentionally making it happen.
<hr>
<h2><img loading="lazy" decoding="async" class="alignnone size-full wp-image-248" src="https://www.theretirementmanifesto.com/wp-content/uploads/2015/05/Money.jpg" alt="" width="717" height="406" srcset="https://www.theretirementmanifesto.com/wp-content/uploads/2015/05/Money.jpg 717w, https://www.theretirementmanifesto.com/wp-content/uploads/2015/05/Money-300x170.jpg 300w, https://www.theretirementmanifesto.com/wp-content/uploads/2015/05/Money-624x353.jpg 624w" sizes="auto, (max-width: 717px) 100vw, 717px" /></h2>
<h2>The Financial Side</h2>
My financial plan was already in motion. I update it each year. But now, with a more clearly defined path, I approached several things differently in my 2025 update.
First, I stress-tested an earlier retirement. 
What if health issues force me out of work early? What if my feelings about work shift in my early 60s? I stress-tested a retirement as early as 65. I don’t think that’s my path—but according to the Transamerica Retirement Survey, <a href="https://www.theretirementmanifesto.com/9-retirement-surprises/" target="_blank" rel="noopener">56% of retirees retired</a><a href="https://www.theretirementmanifesto.com/9-retirement-surprises/" target="_blank" rel="noopener"> earlier than planned. </a>I’d be foolish to assume it couldn’t happen to me.
Next, I ran our custom Social Security plan. 
When estimating future benefits, if retirement is far in the future, I use generalized assumptions in financial plans—often based on the Full Retirement Age benefit amount as estimated on someone’s statement. But as someone approaches retirement, we refine those projections. Typically, refinement begins around age 55. This year, I am 54 and my husband is 57. It was time.
Using specialized software, I input our historical and future estimated earnings through our projected last year of work. The program then calculates an actuarially recommended claiming strategy based on inflation, interest rates, and life expectancy.
This is where I got the surprise of a lifetime. I’ve run hundreds of Social Security analyses – I was pretty sure I knew what our recommended plan would be. I would have been wrong. And that?
That’s a story for my next post.
Until then… I’d love to hear from you in the comments.
<ul style="list-style-type: circle;">
<li>Where have you found clarity?</li>
<li>What activities give you energy?</li>
<li>Where is retirement still murky for you?</li>
<li>And if you’ve had your own “light went on” moment—what was it like?</li>
</ul>
The post <a href="https://www.theretirementmanifesto.com/retirement-my-journey-from-no-never-to-maybe-one-day/">Retirement – My Journey From “No, Never” to “Maybe One Day”</a> appeared first on <a href="https://www.theretirementmanifesto.com">The Retirement Manifesto</a>.
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