Updated: Apr 2
Many people approaching retirement aren’t sure whether they’ve saved enough to live comfortably. Investing and money management can feel intimidating and confusing, which often leads to anxiety and uncertainty.
One of the biggest reasons for this confusion is that people tend to focus too much on the size of their retirement nest egg. While the amount you save is important, the income your nest egg produces in retirement matters even more.
Another challenge is poor expense planning. If you’re good at budgeting during your working years, you’ll likely be good at managing expenses in retirement. If you’re not a strong budgeter yet, now is the time to start.
The good news: retirement planning is simpler than most people think. It really comes down to just three factors:
Your savings on day one of retirement – your nest egg.
Your expected annual investment returns – determined by your investment strategy.
Your monthly spending and expenses in retirement.
We offer a free retirement planning service for our followers. With just ten minutes of data gathering, we can provide you with a personalized retirement forecast in about three minutes. Take advantage of this free offer to see exactly where you stand.
Your Nest Egg
If you’re still working, you’ll need to estimate what your retirement savings balance will be on the first day of retirement. A simple spreadsheet can do the job.
For example, if you’re 60 and plan to retire at 65, you only need five rows—one for each year. Start with your current savings balance, then add your annual contributions and any company match. Finally, estimate your annual investment returns to project how your money will grow.
Your Estimated Annual Investment Returns
Your investment returns are dictated by your strategy. We can review your portfolio and create a reasonably accurate forecast.
Your investment strategy is the single most important factor in determining your financial health in retirement. Most people fall into one of three categories:
Conservative Investor – Typically shifts into bonds, averaging about 5% per year. Unfortunately, this approach often struggles to keep up with inflation.
Follower – Relies on the standard “asset allocation” approach or Target Date funds, with average annual returns around 6.5%. While this strategy may offer slightly better returns than conservative investors, it also exposes retirees to significant losses during bear markets.
Aggressive Index Investor – Allocates most or all money to top stock index funds like the S&P 500, achieving about 9% annual returns over the long run. While this looks strong on paper, it’s risky for people over 60. A bear market just before or early in retirement can devastate your savings—a risk known as the sequence of returns problem.
Because these common strategies all fall short, I created my own unique investing system. Out of necessity, I developed a better way to invest for retirement—one that offers the potential for over 13% annual returns while also avoiding large losses in bear markets.
For investors over 60, avoiding a 40% loss in a market meltdown is critical. My system makes it possible to both protect your life savings and dramatically increase your retirement returns.
Your Expenses in Retirement
This is often the hardest piece to estimate, but it’s crucial. You need a clear picture of your monthly and annual spending.
Your expenses will dictate how much you must withdraw from your retirement accounts. Don’t rely on outdated methods like the old “4% Rule.” Instead, build a realistic spending plan tailored to your lifestyle and needs.
Other important factors include how and when to sell investments in retirement, as well as how to manage cash. We cover these details in our free retirement planning session.
The Bottom Line
By focusing on three core areas—your nest egg, your investment strategy, and your expenses—you can gain clarity about your retirement future. Most people don’t do a detailed analysis, leaving them uncertain about whether they’re truly prepared.
But with the right planning, you can know exactly where you stand—and take control of your financial future.
I would like to offer you a FREE retirement planning session where I can review your current situation and show you where you stand. These sessions are quick and painless, and people get a lot out of them. There are no obligations or commitments on your part.
Click here to schedule your free session today. You should know where you stand with your retirement finances.
Stay Disciplined My Friends,
Phil
Disclaimers The Beyond Buy & Hold newsletter is published and provided for informational and entertainment purposes only. We are not advising, and will not advise you personally, concerning the nature, potential, value, or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. Beyond Buy & Hold recommends you consult a licensed or registered professional before making any investment decision.
Investing in the financial products discussed in the Newsletter involves risk. Trading in such securities can result in immediate and substantial losses of the capital invested. Past performance is not necessarily indicative of future results. Actual results will vary widely given a variety of factors such as experience, skill, risk mitigation practices, and market dynamics.
We are about one week away from a potential US government shutdown. At this point, the House is not in session, and the Senate shows no signs of coming up with a solution.
Most of the time after the political drama, the legislative bodies reach a short-term “non-solution” that extends government funding for three to six months. They essentially just kick the can down the road.
But what if it happens this time? How will it affect your investments? How might it affect the stock market?
The good news is that government shutdowns have not been bad for the stock market.
In the last 50 years, there have been 22 government shutdowns and those shutdowns are typically very brief. After political points have been made and both parties fight to dominate the headlines, the shutdowns end in an average of 8 days. The most common shutdowns last just 2 days.
I am not minimizing the pain and the chaos of government shutdowns as millions of people are impacted. Government shutdowns are scary for government workers and many others who depend on government resources. Our political leaders should never let the government go out of business even temporarily. This post is only about the potential impact on the stock market.
The stock market actually gains an average of 0.3% during government closures. 55% of the time, stock prices go up and 45% of the time stock prices go down slightly. Even in longer government suspensions, stocks have usually performed well. The last shutdown happened during Trump’s first term, and it lasted for 34 days. The stock market gained 10% during that government closure.
Every situation is a little different, however. There has never been a government shutdown when stocks were overvalued by more than 20%. September is usually a tough month for the stock market but prices are up 3% in the current month. With tariff uncertainty and inflation worries and unemployment concerns, no one wants to mess with the current success.
Another comforting statistic is that 12 months after government closures, the stock market has posted gains almost 90% of the time. The average price level one year after the halt is a gain of almost 13%.
There are no guarantees in the stock market particularly in the short term, but history tells us that there is no need for panic as we watch the headlines over the next week.
Stay Disciplined My Friends,
Phil
Disclaimers The Beyond Buy & Hold newsletter is published and provided for informational and entertainment purposes only. We are not advising, and will not advise you personally, concerning the nature, potential, value, or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. Beyond Buy & Hold recommends you consult a licensed or registered professional before making any investment decision.
Investing in the financial products discussed in the Newsletter involves risk. Trading in such securities can result in immediate and substantial losses of the capital invested. Past performance is not necessarily indicative of future results. Actual results will vary widely given a variety of factors such as experience, skill, risk mitigation practices, and market dynamics.
The stock market has continued its steady climb since the lows reached on April 8th at the depths of the tariff concerns. The S&P 500 has risen 33% since the low point in April and has climbed about 5% over the last two months. The S&P 500 is now up almost 13% for the year and the Nasdaq is now up about 16% in 2025 – despite the big decline during the tariff announcements.
In the chart below you can see the extreme price volatility in April and the steady move higher over the last four months.
Economic news has been mostly negative over the last month. Inflation has increased slightly over the last two months. Jobs numbers have been weak lately and the unemployment rate is now climbing. Just this week, the Fed decreased interest rates by 0.25% and they indicated that there could be two more rate decreases before the end of the year.
If inflation remains under control, I expect the economy to be fairly resilient. Interest rate cuts will help, and the economy is being carried by two groups that are less affected by a soft labor market – the wealthiest 10% and retirees.
The steady and consistent increases in stock prices are a cause for some concern. My valuation gauge indicates that the stock market (S&P 500) is now 24% above its fair market value in late September. This is higher than we were in January 2022. The last time the market was overvalued by this much was in 2000 during the dot-com bubble.
I do not trade based on market valuation levels and you should not either. It is just a reminder that you need a strategy in place to protect your savings in case we experience a bear market. Older investors in particular need loss protection.
Stay Disciplined My Friends,
Phil
Disclaimers The Beyond Buy & Hold newsletter is published and provided for informational and entertainment purposes only. We are not advising, and will not advise you personally, concerning the nature, potential, value, or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. Beyond Buy & Hold recommends you consult a licensed or registered professional before making any investment decision.
Investing in the financial products discussed in the Newsletter involves risk. Trading in such securities can result in immediate and substantial losses of the capital invested. Past performance is not necessarily indicative of future results. Actual results will vary widely given a variety of factors such as experience, skill, risk mitigation practices, and market dynamics.
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