In this episode, Marcus Schafer and Patrick Collins discuss the intricacies of generating income in retirement. They explore various strategies for withdrawal rates, the importance of asset allocation, and the role of social security. The conversation emphasizes the need for a comprehensive financial plan that includes tax strategies and the evaluation of income-generating products. The hosts advocate for a diversified portfolio approach to ensure long-term financial stability and flexibility in...
In this episode, Marcus Schafer and Patrick Collins discuss the intricacies of generating income in retirement. They explore various strategies for withdrawal rates, the importance of asset allocation, and the role of social security. The conversation emphasizes the need for a comprehensive financial plan that includes tax strategies and the evaluation of income-generating products. The hosts advocate for a diversified portfolio approach to ensure long-term financial stability and flexibility in retirement.
Chapters
00:00 Why 4% Withdrawal Rates Are Optimistic1, 2 – we contrast our findings from episodes on Elite Endowment spending policies (EP #4) and an individual’s safe withdrawal rates (EP #10)
04:37 The Limits of Dividends as Income 3, 4, 5 – the drawbacks of concentrating only on dividends
15:52 Asset Allocation for Retirement – start with how many years of expenses can be covered by your bond allocation
22:13 Incorporating Social Security and Pensions – delaying often means higher withdrawal rates at the beginning but higher probabilities of success in the long run
23:53 Retirement Income Valley Opportunities – maximizing the low tax brackets between retirement and taking social security + required minimum distributions
30:22 Tax Diversification is Key for Retirement Income – unknown future tax rates means a tax optimal decision in the accumulation phase might not be optimal when you reach your withdrawal phase
32:53 Account Withdrawal Order – Taxable first, tax-deferred second, tax-free third?
35:33 Incorporating Social Security – despite future potential changes, delaying often makes the most sense on paper for those in good health with one spouse that earned more
39:20 Evaluating “Boomer Candy” 6, 7, 8, 9, 10, 11, 12 – annuities, high yield, derivative income, buffer strategies and more…
50:20 Summary – we break down the 4 key steps to making a retirement income plan
Sources
1 What Can We Learn From Elite Endowments | Greenstream #4: https://www.youtube.com/watch?v=2wXKgVGUmyo&t=1463s
2 How Much Money Do I Need to Retire | Greenstream #10: https://www.youtube.com/watch?v=PPGYWsn7FFQ&t=1s
3 Global Dividend Paying Stocks: A Recent History (Dimensional 2013): https://my.dimensional.com/asset/35082/global-dividend-paying-stocks-a-recent-history
4 Dividends in the Time of COVID (Dimensional 2020): https://www.dimensional.com/us-en/insights/dividends-in-the-time-of-covid-19
5 A Slice of Dividend Accounting (Dimensional 2024): https://www.dimensional.com/us-en/insights/a-slice-of-dividend-accounting
6 The Truth About Annuities: Why Their Bad Rap is (Mostly) Deserved | Greenstream #7: https://youtu.be/2gGq4lX2yP4?si=fduhVER5a2KoT_AX
7 Why Investors Are Piling Into Funds That Promise Not to Beat the Stock Market (WSJ, 2023): https://www.wsj.com/articles/covered-call-etf-option-income-jpmorgan-global-x-ff5591f7?mod=article_inline
8 These Hot New Funds Are ‘Boomer Candy’ for Retirees (WSJ, 2024): https://www.wsj.com/finance/investing/retirees-boomer-candy-investing-fund-62454210?mod=article_inline
9 These Funds Are Like Candy for Boomers. The Taxes Aren’t (WSJ, 2024): https://www.wsj.com/personal-finance/taxes/boomer-candy-funds-are-hot-the-taxes-are-not-280c41a3
10 ‘Boomer Candy’ Funds: Sweet Treats or Investment Toothache? (Morningstar, 2024): https://www.morningstar.com/columns/rekenthaler-report/boomer-candy-sweet-treats-or-investment-toothache
11 Rebuffed: A Closer Look at Options-Based Strategies (AQR, 2025): https://www.aqr.com/Insights/Perspectives/Rebuffed-A-Closer-Look-at-Options-Based-Strategies
12 Buffer Madness (AQR, 2025): https://www.aqr.com/Insights/Perspectives/Buffer-Madness
Information contained herein has been obtained from sources considered reliable, but its accuracy and completeness are not guaranteed. It is not intended as the primary basis for financial planning or investment decisions and should not be construed as advice meeting the particular investment needs of any investor. This material has been prepared for information purposes only and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Past performance is no guarantee of future results.
