What Rising Interest Rates Mean for Social Security Claiming

And two other important retirement-related decisions: whether to buy long-term-care insurance and purchase an annuity. [Morningstar](?utm_source=eloqua&utm_medium=email&utm_campaign=newsletter_improvingfinances&utm_content=52467&elqTrackId=df60c821fc494a9c90d32d86c46fcde5&elq=3995234a782848819f9b4524dd1cd88a&elqaid=52467&elqat=1&elqCampaignId=26440) [Improving Your Finances] Improving Your Finances with [Christine Benz]( [Christine Benz] The relationship between higher yields and retirement portfolio planning—return expectations, safe withdrawal rates, and asset allocations—is fairly direct and intuitive. As I [wrote last week]( higher inflation-adjusted yields on safe assets nudge up the long-term return prospects for bonds and cash, and in turn contribute to higher starting safe withdrawal rates. The availability of safe, stable cash flows from bonds argues for more conservative portfolio positioning for retirees who prioritize stability in their year-to-year portfolio cash flows. But the interest-rate climate permeates almost every other key financial decision related to retirement planning, too. [This week I wrote about what rising rates mean for the timing of Social Security claiming]( as well as the attractiveness of long-term-care insurance and annuities. I found some surprising—and useful—food for thought in the research and I hope that you will, too. Now that we’re into tax season, we’ve got tax content coming on the regular, including tax-time videos with tax and IRA guru Ed Slott. [In the first of the series]( Ed shared four key mistakes he sees people make during tax season, including trouble with documenting qualified charitable distributions and the backdoor Roth IRA. As always, Ed brings a wealth of experience to these topics, not to mention infectious enthusiasm. (Would that everyone could be as engaged with their jobs!) I also appreciated John Rekenthaler’s [exploration of the conventional wisdom on asset allocation]( which calls for lower equity stakes as retirement approaches. John makes the provocative case that reversing that glide path (lower equity in the beginning, higher later on), or at least flattening it, could lead to better outcomes for target-date fund investors and others. But he also concedes that conservative-trending asset allocations are unlikely to be displaced in the retirement planning context any time soon. Finally, Wasatch, an independent small-cap specialist, has long been one of Morningstar’s favorite firms for investors seeking active exposure to the market’s small fry. Dan Lefkovitz and I recently had [a wonderful conversation with Wasatch CEO and longtime portfolio manager JB Taylor]( for [The Long View]( podcast. We covered small caps’ long, dark night relative to mega-caps, the attractiveness of non-US small caps, and more. I’m mostly on “Team Index Fund” these days, but I was compelled by JB’s case for active management in the small-cap space. With warm regards, Christine Benz [3 Key Retirement Decisions Affected By Higher Yields]( How to factor in higher rates when deciding whether to purchase an annuity or buy long-term-care insurance. [Find Out More]( Share: [facebook]( [twitter]( [linkedin]( ADVERTISEMENT [media]( [media] [How Rising Interest Rates Affect Your Retirement Plan]( Be aware of implications for returns, withdrawal rates, and asset allocation. [Read More]( [4 Mistakes to Avoid During Tax Season]( IRA specialist Ed Slott discusses ‘gotchas’ to watch out for when filing your tax return. [Watch Now]( [Should Target-Date Funds Allot More to Equities?]( What a “reverse glide path” would look like. [Dive In]( [JB Taylor: Small Caps Haven’t Been This Cheap in 25 Years]( The CEO of Wasatch talks small-cap equity investing in the age of the ‘Magnificent Seven.’ [Listen Now]( [Tax-Efficient Portfolio Makeovers May Be Less Painful Than You Think]( Proper accounting of cost basis is essential to avoid paying more in taxes. [Learn More]( [How to Use a Backdoor Roth IRA]( Details and tax implications to keep in mind from tax and IRA expert Ed Slott. [Find Out Today]( Listen Now Get the latest investing insights and market updates with [Morningstar’s podcasts]( available on your iPhone, iPad, Android, PC, or smart speaker. Stay connected: [twitter]( [facebook]( [linkedin]( [instagram]( [YouTube]( [Apple News]( [View online]( | [See all newsletters]( | [Share your feedback]( [Unsubscribe]( from this newsletter. Or update your [email preferences](. © 2024 Morningstar, Inc. All Rights Reserved. 22 W. Washington St. Chicago, IL 60602