”hank, are you willing to provide more personal details about your situation, so your opinions have some context?”
Which opinion? I’ll try to compare my situation to yours but not sure if that affects most of my opinions about investing or finance..
- “When I retired 13 years ago,”
I retired 25 years ago
- ”I attempted to project my future spending needs”
Ditto. I worked this out over the 2 or 3 years before retiring.
- “Over these years I have meet my spending needs with a combination of pension income (with a COLA), an Annuity Income (Savings that I converted to an Annuity), and some part time work.”
Pretty close. I have Social Security and a pension. While working I opted-in to a pension feature that adds 3% yearly of initial amount. Not really COLA - but helpful. The pension provides some supplemental health care coverage in combination with Medicare. I’m not as up-to-speed as I should be on the out-of-pocket expenses - but there are some. Never owned an annuity. No part time work. Active maintaining home infrastructure others might farm out.
- ”Since retirement, I have continue to contribute to my HSA and my IRA with contributions from part time work income. Recently I began managing one of my properties as a seasonal rental for additional income. I will work part time spending some of that work income and saving some into an IRA until age 73. My RMDs will then become a forced taxable event that may turn into an income source if needed or taxable savings if not needed."
Had a 403-B at work invested 100% in a global equities for 28 years. On retirement I converted it to a Traditional IRA and diversified the assets more broadly. In early ‘09 I converted about 40% to a Roth to take advantage of the crash. Made 2 smaller conversions over the next decade. 90% now in a Roth. RMDs alone from the Traditional are adequate to meet all my needs (along with SS & pension). The Roth provides a safety-net that might be needed for major infrastructure repair or other unexpected needs. I’m single and once-divorced. Own some nearby real estate that could be sold for additional cash. The home has a small fixed rate 3.13% mortgage (less than 20% of value) taken out for some renovation more than 5 years ago. Could pay it off, but think I can do better investing across a diversified portfolio consisting largely of OEFs, CEFs & ETFs.

Thanks for your information Hank! Your comparisons are actually to those of "bee", which I quoted in my post to you above, but that is fine since this thread actually should link back to the OPs.

@msf
"Color me skeptical. Money managers like Vanguard and Fidelity tried to do this and failed."
No doubt. But your Barron's article suggests why my portfolio is perhaps different than that of those 2 firms..." One hurdle: Managed payout funds have long had trouble hitting their income targets without dipping into capital—simply giving investors part of their money back."
You see, I'm not smart enough to engineer a dedicated income stream, so I don't try. So for my income sleeve I buy things which already generate a distribution. When bought at opportune pricing and from solid companies or firms which have a history of maintaining/growing their distributions, the income takes care of itself.
And it's no wonder the managed payout funds closed up...in 2020, during the pandemic. But 2020 was a perfect time to buy stocks/funds for an income portfolio. JP Morgan, Prudential, AbbVie all selling at fire sale pricing with big dividends. I even bought Broadcom for <$30 yielding ~5%.
After 2 straight years of 20%+ growth in the S&P, this coiled spring is going to unwind sometime in the next year or two, and things will go on sale once again.

”hank, are you willing to provide more personal details about your situation, so your opinions have some context?”
Which opinion? I’ll try to compare my situation to yours but not sure if that affects most of my opinions about investing or finance..
- “When I retired 13 years ago,”
I retired 25 years ago
- ”I attempted to project my future spending needs”
Ditto. I worked this out over the 2 or 3 years before retiring.
- “Over these years I have meet my spending needs with a combination of pension income (with a COLA), an Annuity Income (Savings that I converted to an Annuity), and some part time work.”
Pretty close. I have Social Security and a pension. While working I opted-in to a pension feature that adds 3% yearly of initial amount. Not really COLA - but helpful. The pension provides some supplemental health care coverage in combination with Medicare. I’m not as up-to-speed as I should be on the out-of-pocket expenses - but there are some. Never owned an annuity. No part time work. Active maintaining home infrastructure others might farm out.
- ”Since retirement, I have continue to contribute to my HSA and my IRA with contributions from part time work income. Recently I began managing one of my properties as a seasonal rental for additional income. I will work part time spending some of that work income and saving some into an IRA until age 73. My RMDs will then become a forced taxable event that may turn into an income source if needed or taxable savings if not needed."
Had a 403-B at work invested 100% in a global equities for 28 years. On retirement I converted it to a Traditional IRA and diversified the assets more broadly. In early ‘09 I converted about 40% to a Roth to take advantage of the crash. Made 2 smaller conversions over the next decade. 90% now in a Roth. RMDs alone from the Traditional are adequate to meet all my needs (along with SS & pension). The Roth provides a safety-net that might be needed for major infrastructure repair or other unexpected needs. I’m single and once-divorced. Own some nearby real estate that could be sold for additional cash. The home has a small fixed rate 3.13% mortgage (less than 20% of value) taken out for some renovation more than 5 years ago. Could pay it off, but think I can do better investing across a diversified portfolio consisting largely of OEFs, CEFs & ETFs.

An annuity-like distribution is certainly possible. I'm using a combination of funds such as SCHD, DIVO, NEAR, JPIE and a handful of dividend paying stocks and CEFs ...
Color me skeptical. Money managers like Vanguard and Fidelity tried to do this and failed.

Payout funds got their start during the 2007-2008 financial crisis when Vanguard and Fidelity both launched the products. The idea was appealing: Convert a retirement savings pool into a reliable income stream and offer investors peace of mind that they’d get a monthly paycheck, regardless of the market’s ups and downs.
...
Vanguard initially had three payout funds but merged them into one fund in January 2014. Fidelity developed a series of Income Replacement funds, paired with an optional monthly payout feature, but Fidelity rebranded the funds in 2017 as “Managed Retirement Income” with more of a high-income focus rather than managed payouts.
One hurdle: Managed payout funds have long had trouble hitting their income targets without dipping into capital—simply giving investors part of their money back. Annuities work similarly, though they have an insurance component that can keep the income flowing if the portfolio runs out of money.

Barron's, Vanguard Throws in the Towel on Its Managed Payout Fund, Feb 28, 2020
The insurance component is what is missing in DIY (or professionally managed) alternatives. In order to guarantee (self insure) that you won't run out of money in your lifetime, you have to overfund. That may be okay if you're planning on leaving a legacy and are willing to dip heavily into that legacy if things don't work out. But it reduces the income stream that you could otherwise have.
A similar point about underspending is made in the originally cited paper:

[U]sing a relatively simple model we estimate consumption could increase by approximately 80% for retirees if assets were converted to lifetime income streams, where the improvement rates are significantly higher for joint households

What annuities do is pool risk. Some people die early, others later. Instead of each individual self insuring (collectively overinsuring), individuals pool their risk through an insurance company. This provides larger income streams safely.
The risk is in outliving your money. A traditional immediate annuity is not the only way to protect against this tail risk. A longevity annuity (a form of immediate annuity where payouts are deferred) will also do the job.
T. Rowe Price recognized this and recently came out with a product for employer-sponsored plans (401(k)s, etc.). Its Managed Lifetime Income product provides a managed payout investment for 15 years followed by a QLAC (qualified lifetime annuity contract).
I don't see any reason why one cannot do this oneself, self-managing a portfolio (as @PRESSmUP described) and adding a longevity annuity (either QLAC or nonqualified).
Alternatively, one can annuitize a variable annuity.

Variable payout annuities provide protection against longevity risk and allow for some participation in the higher (but more volatile) returns of corporate equities and other real assets. They also avoid the annuitization risk because their benefit payments vary with investment performance and are not fully determined by the prevailing conditions at the time of retirement. But VPAs are exposed to investment and inflation risks ...

The Mechanics and Regulation of Variable Payout Annuities (50 pages. TL;DR)

hank, are you willing to provide more personal details about your situation, so your opinions have some context? bee did provide personal details of retirement and consideration of an "annuity-like" income stream:
"When I retired 13 years ago, I attempted to project my future spending needs. Over these years I have meet my spending needs with a combination of pension income (with a COLA), an Annuity Income (Savings that I converted to an Annuity), and some part time work. Since retirement, I have continue to contribute to my HSA and my IRA with contributions from part time work income. Recently I began managing one of my properties as a seasonal rental for additional income. I will work part time spending some of that work income and saving some into an IRA until age 73. My RMDs will then become a forced taxable event that may turn into an income source if needed or taxable savings if not needed."
I never know if posters are in similar situation as the OP, or if they are in a very different situation, when they offer their input to the OP.

Regarding Reverse Mortgages -
Wouldn’t it be smarter to do a traditional refinance of your existing home for whatever you can pull out? Then invest the money and draw it down as you need it? The bank or other institution would of course hold a lien against the property. I’ll add that at 7% (+-) interest rates this would be a last resort. However, it sounds better than a reverse mortgage. Guess I don’t understand RMs very well.
Oops - I should have read @msf’s above link first:
”A reverse mortgage loan, like a traditional mortgage, allows homeowners to borrow money using their home as security for the loan. Also like a traditional mortgage, when you take out a reverse mortgage loan, the title to your home remains in your name. However, unlike a traditional mortgage, with a reverse mortgage loan, borrowers don’t make monthly mortgage payments. The loan is repaid when the borrower no longer lives in the home.”
Psychologically, I’d find that difficult to adjust to. It defies everything I’ve been taught about sound financial management - an open-ended lien. Alas, the concept does have some logic behind it.
@bee - I think @PRESSmUP’s above response / suggestion is spot-on. If you can cope with an occasional down year or two it should be possible to construct a portfolio that at least keeps pace with inflation and allows relatively small annual drawdowns. Let’s assume that pulling out 5% (maybe a bit more) a year isn’t going to kill the goose even if the portfolio sustains 2 or 3 back-to-back negative years, His suggested investments are excellent. Obviously, the more additional risk you can afford comfortably to take the better you’ll do over longer (3-5 year) periods.

"Exactly 25 years ago today, I published the first memo that brought a response from readers (after having written for almost ten years without receiving any). The memo was called bubble.com, and the subject was the irrational behavior I thought was taking place with respect to tech, internet, and e-commerce stocks."
Is that ringing any bells?
Link

The WSJ clip says nothing we didn’t already know. I just thought coming on a morning when the indexes were off sharply, it was a worthy study in contrast. I’ve looked at Geroux’s Barron’s Roundtable remarks from January ‘22 and he seems to have been spot-on. Remarked back then that the markets had been highly profitable for the two preceding years and he was skeptical the streak could continue. ( Of course, it didn’t.)

Since 1928¹ there have only been three other instances of 25%+ returns in back-to-back years:
1935 (+47%) and 1936 (+32%)
1954 (+53%) and 1955 (+33%)
1997 (+33%) and 1998 (+28%)
So what happened next?
Something for everyone:
1937: -35%
1956: +7%
1999: +21%
Terrible, decent and great. Not helpful.
https://awealthofcommonsense.com/2025/01/2024-it-was-another-good-year-in-the-stock-market/
¹ "Standard & Poor's, initially known as the Standard Statistics Company, created its first stock market index in 1923.
It consisted of the stocks of 233 companies and was computed weekly.
Three years later, it developed a 90-stock composite price index computed daily.
That was expanded over the years.
On March 4, 1957, the Standard & Poor's 500 was introduced."
https://www.reuters.com/article/us-usa-stocks-sp-timeline-idUSBRE9450WL20130506/

Such a strong rally leads us to higher-than-normal valuations. Will we pay the piper in 2025?
https://finance.yahoo.com/news/likely-stock-market-crashes-under-095100991.html
"What's particularly worrisome is what's happened in the wake of Shiller P/E readings above 30 throughout history. There have been only six occurrences in 154 years where the Shiller P/E has topped 30, including the present, and the previous five were eventually followed by declines ranging from 20% to 89% in the Dow, S&P 500, and/or Nasdaq Composite. In other words, premium valuations aren't tolerated over long periods.
And the S&P 500's Shiller P/E isn't the only valuation tool sounding alarm bells. The "Buffett Indicator," named after Berkshire Hathaway's investor extraordinaire Warren Buffett, hit an all-time high in December.
The Buffett Indicator, which divides the market cap of all publicly traded companies into U.S. gross domestic product (GDP), was labeled by the Oracle of Omaha as "probably the best single measure of where valuations stand at any given moment" in 2001. Whereas this market-cap-to-GDP ratio has averaged 85% (0.85) since 1970, it touched 209% in December 2024."

I'm playing this game by bundling cap gains into some years and ordinary income into others.
A few techniques to bundle ordinary income
- Do Roth conversions in "ordinary income years".
- Buy short term (1 year or less) CDs/T-bills in "cap gains years" that mature in "ordinary income years"
- Invest in muni (MM, bond) funds in "cap gains years", and taxable (Treasury, corporate) funds in "ordinary income years"
A couple of techniques to bundle cap gains
- Accelerate recognition of gains (sell and repurchase if desired) in "cap gains years"
- Sell "around" annual distributions - avoid distributions of ordinary income (if any) and repurchase after record date (recognizes additional cap gains)
Depending on how much space you have in your 0% cap gains bracket, creating more cap gains may or may not work out for you. In any case, the added cap gains are state-taxable, so that should be kept in mind as well.
On the flip side, Roth conversions may be partially or fully state tax-exempt, depending on the state. That's motivation to convert some money even if it eats into the 0% cap gains bracket.
Note that the numbers presented in the graph are incorrect.
Cap gains: $47,025 (top of 0% bracket) + $14,600 (std ded.) = $61,625, not $63,475
Ordinary inc: $47,150 (top of 12% bracket) + $14,600 (std ded.) = $61,750, not $63,475
Note also that the cap gains bracket does not line up exactly with the ordinary income bracket (as given by the IRS). Close, but different.
It looks like the author may have been adding in the 2023 extra deduction ($1,850) for being over age 65 (or blind). That would make the cap gains figure come out to $63,475.

I thought I knew a lot about investing until opening a brokerage account at Fido 4-5 years ago. Much wider landscape to work with than just having investments at a few different houses. So am still learning. But I do know my 2022 (bear market) return was better by 2 or 3 points then it would have been if stuck in the previous fund houses. From my (broad) family experience of 70+ years the real issue is convincing someone to save during their working years, Without having something to invest, all the coaching in the world can’t help you in retirement.
I’ll vote for better financial education: ”Give a man a fish, and you feed him for a day. Teach a man to fish, and you feed him for a lifetime.”
Great discussion. Thanks @stillers for the lengthy comment.

bee: "Question: How many have turned to annuities or "annuity - like" strategies to increase your income spending?
When I retired 13 years ago, I attempted to project my future spending needs. Over these years I have meet my spending needs with a combination of pension income (with a COLA), an Annuity Income (Savings that I converted to an Annuity), and some part time work. Since retirement, I have continue to contribute to my HSA and my IRA with contributions from part time work income. Recently I began managing one of my properties as a seasonal rental for additional income. I will work part time spending some of that work income and saving some into an IRA until age 73. My RMDs will then become a forced taxable event that may turn into an income source if needed or taxable savings if not needed.
What type of a portfolio would you design as an "Annuity - like" strategy for yourself? Maybe a combinations of Balanced mutual funds/EFTs that distribute periodically? Am I deribing the 4% rule?
Shifting from a mindset of saving for retirement to a mindset of confidently spending in retirement is a huge challenge we all face."
For me, I accumulated a significant amount "defined contribution" assets through my employer, along with some estate inheritance assets inherited by my wife. Those all reside in our property, in our Schwab Brokerage, and in local banks and credit unions. As part of our retirement, my wife and I depend on income from Social Security, a small government pension, which pays enough income for about half of our normal living expenses. We produce additional income through a changing array of asset holdings at our brokerage and our bank and credit unions. The closest thing to an "Annuity-like" strategy, that we use are fixed income instruments such as Money Market accounts, CDs, high yield Savings Accounts, and treasuries, to supplement SS and the small pension of my wife. The fixed income instruments are comfortably producing a 4 to 6% stream of income, so I am able to maintain principal and just live off the income that my "principal assets" throw off annually. I have in previous years used bond oefs, that were very low volatility, low "risk" funds, such as RPHIX and DHEAX, but when the Market went through a severe correction in 2020, I sold all the bond oef funds, put all the sales proceeds into MMs, and then moved money out of MMs into other low risk fixed income instruments, many of which are covered by FDIC and NCUA government insurance protection. That is where I am now, but I always have to maintain enough investing flexibility to make investment decisions necessary to throw off enough income, with the least amount of risk, to meet my 4 to 6% annual earnings.

From The article:

For 2024, individuals with taxable income below $47,025 ($94,050 for married couples) pay 0% tax for long-term capital gains (LTCG). In years when you’re under the threshold you could effectively lock in tax-free long-term gains. The idea would be to realize just enough LTCG to stay within the 0% tax bracket. You also have to tack on the standard deduction which is $15,000 for individuals or $30,000 for a married couple. That means don’t have to pay federal income taxes on your long-term capital gains until your income exceeds a little more than $63,000 (single) or $126,000 (married couple). So you could realize more than $63,000 ($126,000) in capital gains and dividends without paying any federal income tax.

Link to Article:
https://awealthofcommonsense.com/2025/01/how-to-pay-nothing-in-taxes-during-retirement/

I believe one can claim $300 on standard form. I"m probably wrong as I haven't done my Taxes in the last 7 or 8 years. I realize $300 isn't going to help much, but to some people every little bit saved is a plus.

Unfortunately, that "above the line" deduction was temporary, it was only allowed in 2020 and 2021. There is a movement to restore it and make it permanent.
https://tax.thomsonreuters.com/news/hundreds-of-nonprofits-push-for-passage-of-charitable-act/
Above the line deductions
Though your post did remind me of another way to make this work. People over 70½ (sic) can take qualified charitable deductions (QCD). Instead of taking distributions from a traditional IRA (and thus increasing income), those distributions can be sent directly to charities. This way your AGI isn't increased because of the distributions and the charities still get your contributions.

I believe one can claim $300 on standard form. I"m probably wrong as I haven't done my Taxes in the last 7 or 8 years. I realize $300 isn't going to help much, but to some people every little bit saved is a plus.

”U.S. stocks roared to another blockbuster showing in 2024. Few expect such a torrid advance in the year to come. The S&P 500 climbed 23%, notching 57 record closes as the economy remained healthy, inflation ticked lower and an Al-fueled rally in big tech stocks powered on. Even with a stumble in the last few trading days, the broad U.S. stock index wrapped up its best consecutive years since 1997 and 1998, according to Dow Jones Market Data, during the lead-up to the bursting of the dot-com bubble.
“The rally has created millionaires and turned professional investors increasingly bullish: In December, the Bank of America Global Fund Manager Survey found record enthusiasm for U.S. stocks, as measured by the net share of respondents favoring the group. The payoffs haven't been limited to the equity market: Gold had its best year since 2010, while bitcoin more than doubled, vaulting above $100,000 for the first time ….”
(Excerpted from today’s online Wall Street Journal 1/9/2025 / All I can say is Whoopie!)

I've gratuitously managed the ports of a lot of friends and relatives over the past ~40 years. I do it because they need the help and I can provide it. My goal is usually, depending on their age and my relationship to them, to educate them on the basics and someday have them feel confident enough to do it themselves.
But I don't do it for everyone who asks me for help. I am very selective in choosing whose port I'll manage. And I vary the scope of my work based on a bunch of factors too varied to detail here.
It definitely ain't all thankless and never have I gotten myself into an arrangement that came back to bite me. And regularly the friends and relatives throw things my way despite my insistence that they don't need to give me anything.
We've received some pretty incredible "Thank Yous'' that have taken us to places and events that we may have never been. And we've eaten a lot of great food at restaurants that we'd have never otherwise seen the insides of! And the home cooked meals are many times to die for!
The most financially rewarding situation (despite me not being in it for that) came after a very wealthy relative was told by a national tax service that she owed a combined ~$60K in FIT/SIT in a year she sold her home. Well, one relative smelled something amiss, and word quickly got out in the family that I should take a look at that before the relative signs the return and has it filed by the firm.
Yeah, huge error by the firm in their calculation of adjusted basis of the property. Relative actually only owed ~$5K, not ~$60K, in combined FIT/SIT. I worked with the national firm who admitted their mistake and they correctly filed the respective returns based on my corrections. The relative was beyond elated and thought (despite my urging to the contrary) that I should get a healthy chunk of the savings of would be taxes. I tried to stop her but could only contain her gratitude! (I was asked if I would be upset if she sent me a check for $X. I responded that I don't upset easily!)
Far beyond all that though has been the incredible boost this part of my relationships has added to our overall relationships. It works that way because I establish a framework that I will only work within and there are clearly expressed ground rules. At the first notion of problems, the portfolio mgmt part of our relationship is terminated. In all the years of doing this, that only happened once. It was no big deal and there were no ill effects to our overall relationship.
The other incredible by product of doing this is what I learn about risk, specific investments and varying investment strategies that I would have otherwise not likely learned had I not engaged in these activities. Over the years I found three funds that I might not have otherwise found via reviews of 401k and 403b options. I invested in all three and two of them have been cornerstone funds of ours for a long time now.
Yeah, I agree. Doing this ain't for everybody and many that do will suffer consequences that they could have avoided by just staying out of these relationships. But I'd caution taking advice from posters on internet forums who have never once engaged in this, or maybe had a bad experience, or heard about a cousin of a friend's uncle who did.

My parents have an advisor who is about to retire. he said he'll take care of them for as long as he's alive (my father is clergy and helped him through some losses) so thats nice but he's 5 years older than my parents!
I know what they are invested in and nothing is too out of bounds. I'd do it differently in all likelihood but nonetheless I don't want the hassle.
My dad wants me involved in all the meetings which is fine. I assume advisors roll their eyes at the idea of a novice stickign their nose in.
That said, I know one of the guys at his firm and he knows I know my stuff and has tried to get me to turn to a life of financial advice (blech) so its fine.
He asked me one day if I had any ideas I'd like to discuss. I was like I know you agreed to handle this for my parents and I appreciate that, but would it be better to move these 8 funds into a singular balanced fund that spits out a distribution that they can w/d or not w/d for their expenses? It seems like it woudl be easier for everyone involved. He's like thats a great idea but I'm not dead yet lets look at that later on.
I manage my fathers stock account (largely vtsax and john deere) that we use for charitable giving.

PRWCX is OPEN at TRP for new investors who invest at least X amount. Check TRP website for details.
Per M*, last year the fund performance was the lowest percentile in the last 10 years. There were noticeable net outflows in Dec 2024. 2021 also had meaningful year end distribution but no noticeable net outflows in December 2021. Last year, I reallocated about 20% out of my PRWCX (i.e., reduced, not rebalancing) - none in December though! The fund is big.