@Gary - that's not what Lewis wrote. Go back and read it again. Lewis said ".... and this constant assumption that Americans are stupid and don’t know how to maximize their retirement." See that part about "this constant assumption."

Social Security benefits are guaranteed to keep up with inflation and last for life. That’s important when half of all 65-year-old American women can expect to live past age 86, according to Social Security estimates. The average life expectancy for U.S. men who are currently 65 is age 84.

What about the half of women who don’t live that long? The most important number no one can know for sure is his/her life expectancy. If you are not physically healthy and/or longevity doesn’t run in your family taking Social Security early makes sense. Also many people don’t have the retirement savings to time their taking of the benefit perfectly like this story suggests, yet they may still be sick of working and not want to work till age 70 before retiring. In other words, the answer to when to take the benefit is complex and this constant assumption that Americans are stupid and don’t know how to maximize their retirement by the financial services sector is getting pretty old.

FYI: The world of retirement savings recently reached a significant milestone that has important implications for workers and retirees: For the first time, assets in defined-contribution savings plans represent more than 50% of all retirement plan assets globally, according to Willis Towers Watson.
While some defined-benefit pension plans still exist, many more workers today have to rely on defined-contribution plans (think: 401(k) and IRA accounts) to fund their retirements. With today’s defined-contribution plans, workers have to assume the responsibility for making all the complex savings and investment decisions that will significantly affect the amount of money they will have available once they stop working and retire.
While recent innovations in defined-contribution retirement plans, such as the use of auto-enrollment, are making it easier to save, the focus now must shift toward a more-comprehensive approach to help individuals make those savings last.
Increasingly, workers expect their retirement plans to not only help them save, but also help them to generate and manage income through retirement. A recent report by the Georgetown University Center for Retirement Initiatives, “Generating and Protecting Retirement Income in Defined Contribution Plans”, looks at how different approaches can meet individual goals for doing just that.
Regards,
Ted
https://www.marketwatch.com/story/the-retirement-plan-of-the-future-turning-that-pot-of-money-into-monthly-income-2019-06-28/print

https://www.sec.gov/Archives/edgar/data/3521/000119312519186064/d749776d497.htm
497 1 d749776d497.htm TAF ALGER SMALL CAP FOCUS FUND
THE ALGER FUNDS
Alger Small Cap Focus Fund
July 1, 2019 Supplement to the Statutory and Summary
Prospectuses dated March 1, 2019, as supplemented to date
The Board of Trustees of The Alger Funds has authorized a partial closing of Alger Small Cap Focus Fund (the “Fund”), effective July 31, 2019.
The Fund’s Class A and C Shares will be available for purchase by existing shareholders of the Fund who maintain open accounts.
The Fund’s Class I and Z Shares will be available for purchase by existing shareholders of the Fund who maintain open accounts and investors who transact with certain broker-dealers identified by Fred Alger & Company, Incorporated, the Fund’s distributor. Please check with your financial advisor regarding the availability of Class I and Z shares of the Fund for purchase at their firm.
In addition, the Funds Class A, C, I and Z shares will be available to new investors that utilize certain retirement record keeping platforms identified by the Fund’s distributor.
The Fund’s Class Y Shares will remain open to all qualifying investors.
The Fund may resume sales to all investors (or further suspend sales) at some future date if the Board of Trustees determines that doing so would be in the best interest of shareholders.

FYI: One of the signature achievements of the post-millennial capital markets is the driving down of investor costs to near zero, via Reg NMS which did away with the fraction spreads market makers once enjoyed and converted stock exchanges to a decimalized system.
While there have been winners and losers as a result of this and other improvements, no one would argue that the individual investor hasn’t become better off – more access, lower costs, increased liquidity. The concurrent shrinking of the average internal expense ratio at mutual funds and ETFs has been undeniably positive for the end investor trying to save for college, retirement, etc.
Democratic presidential candidate Bernie Sanders is now calling for a transactions tax on investors and traders that would represent a big step backwards for market participants, with the altruistic goal of wiping out the $1.6 trillion in student debt that many believe is holding back the economic potential of millions of young Americans.
Regards,
Ted

InvestmentNews Article:
https://www.investmentnews.com/article/20190624/FREE/190629961/wall-street-lashes-out-at-bernie-sanders-plan-to-pay-off-student

FYI: Dear retail investors holding lame 0.75% bank certificates of deposits and U.S. Treasury bonds yielding a tad over 2% for 10 years. If you want your money to yield something outside of the stock market, then it’s time to leave the United States.
Not pack-your-bags, sell-your-home leave the United States. But time to diversify out of U.S. bonds and CDs and put that retirement money somewhere far, far away.
It can’t go to Germany. That’s a negative yield debt. It can’t go to Japan. That’s money under the mattress. So it has to go to the emerging markets. Like China. Yes, China.
Regards,
Ted
https://www.forbes.com/sites/kenrapoza/2019/06/21/for-fixed-income-investors-time-to-leave-america/#290485bc51f6
M* Snapshot GARBX:
https://www.morningstar.com/funds/xnas/garbx/quote.html

An immediate annuity can have a place in your retirement portfolio, particularly if you feel you need to have at least one stream of income you can count on. But because interest rates are so low, you should wait until rates rise again before purchasing an annuity.

FYI: The California Public Employees’ Retirement System was one of the first public-pension systems to tie its investments to social activism. Now it is having second thoughts.
Regards,
Ted
https://www.wsj.com/articles/calpers-dilemma-save-the-world-or-make-money-11560684601

Hi @msf
We've been down this discussion road before; but I would still opt for Fidelity's annuity offering.
With the offerings available, one should not have a problem with beating inflation; and with fairly low risk, IMHO.
Even with a somewhat aggressive investment choice of Fidelity's VIP Balanced fund, one has very low costs: .57% expense ratio (same as retail offering) and .25% of account balance for the fee. And no surrender charges found in more common annuity types, usually after the first 7 years of the contract; and the normal spousal/non-spousal beneficiary choices.
For those not familiar with this product, check the link and read through everything....investment choices, etc.
Fidelity's Personal Retirement Annuity
Have a good remainder,
Catch

FYI: Recent articles in Advisor Perspectives by David Blanchett and by Zvi Bodie and Dirk Cotton have dealt with single-premium immediate annuities (SPIAs) used to generate lifetime income in retirement. The focus of those articles was the pricing and the risks of going without inflation protection. In addition to SPIAs, insurers also offer variable annuities (VAs) and fixed-indexed annuities (FIAs) with optional riders known as guaranteed lifetime withdrawal benefits (GLWBs). I’ll expand on the recent articles by comparing the income-generating properties of SPIAs versus VAs and FIAs, and place particular emphasis on how inflation risk impacts inflation-adjusted income.
Regards,
Ted
https://www.advisorperspectives.com/articles/2019/06/17/which-annuities-offer-the-best-inflation-protection

Please, for those who know more than I do: why is this NEW fund advertised as an "income" fund? Is that not the raison d'etre of bond funds generally?

There are income funds and there are total return funds. From one of many articles about Bill Gross' retirement:

“His real claim to fame was pioneering total return investing in fixed income,” said Miriam Sjoblom, director of fixed-income ratings at Morningstar. “That means you are not just concerned with collecting income. You are concerned with price appreciation and avoiding losses.
“The fact that he was able to popularize a style of investing that didn’t focus on yield changed the industry,” Sjoblom said.

https://www.seattletimes.com/business/pimco-founder-bill-gross-the-bond-king-calls-it-quits/
DoubleLine confuses matters by calling its fund an income fund while stating that its objective "is to maximize total return". Compare that with, say, DODIX, which says that it "seeks a high and stable rate of current income, consistent with long-term preservation of capital. A secondary objective is to take advantage of opportunities to realize capital appreciation." (Quotes from funds' respective prospectuses.)
Maybe just a matter of degree these days, with everything giving a nod to appreciation.

Thanks @msf for your (typically) well reasoned and precisely detailed analysis. I’d preface my comments by saying things always look rosier late in a decade-long bull market cycle in equities. I’m confident that if this bull lasts another 3 or 4 years the than prevailing “expert” advice will be to pile 100% into aggressive equity funds because fixed income is tantamount to rubbish.
- Easy to overlook is investor risk tolerance. No matter what one’s rationale may be for “loading up” on equities, there’s nothing like a 40-50% drubbing over a couple miserable years to bring us to our knees and shock us back to our Puritan sensibilities. In too many cases those equities piled into during sunnier days get unloaded by investors at discounted prices late in the bear cycle.
- Also overlooked by the article’s underlying assumption is that although investors might well possess a pension, SS, or annuity assets that would allow some level of subsistence, their portfolio of equities, bonds, etc. is not without some immediate purpose. In many cases (speaking from personal experience) those assets are withdrawn regularly for major expenses like travel, new vehicles and upgrades / maintenance on their principal dwelling. It’s also an emergency fund for unexpected medical costs and provides needed “insurance” against having the carpet pulled out from underneath by a reduction in SS or pension benefits (though the assumption is these benefits will remain intact).
- Further, the invested portfolio provides needed growth to compensate for inflation - arguably better than those (somewhat fixed) pension, annuity, SS benefits can. Point being: Treat those invested assets with the same care & due diligence you would if you had none of those added “insurance” products.
The article seems related to an argument advanced by John Bogle around 2013 when he said investors should treat SS as a “bond” in their allocation decisions. It was part of a wider ranging interview, so I’m posting only one commentary from a secondary source. (But the actual full interview is linked within the commentary). I’m also posting a lengthy mfo discussion from around the same time in which a number of members from various tiers shared their (somewhat divergent) thoughts on the question.
Bogle’s position: https://www.businessinsider.com/how-to-save-for-retirement-vanguard-john-bogle-2017-1
MFO discussion (September 2013) : https://mutualfundobserver.com/discuss/discussion/7814/count-social-security-as-part-of-portfolio

I generally agree with this article (about counting annuities as part of the "safe" portion of your portfolio allocation). It does gloss over a couple of points that merit further thought.
One is how to reduce to present value, i.e. how does one calculate the present value of an income stream in order to know how much one has in "safe" investments? It suggests using the commercial rate for an immediate annuity today that would be comparable to one's pension (if one is lucky enough to have one).
This approach could also be applied to an annuity that one annuitied some time in the past. One might have paid $100K for an immediate annuity in 2014, while that same annuity might cost only $70K today. In part because one has fewer years of life left, but also in part because interest rates have risen slightly. In that sense, an income stream is very much like a bond portfolio - its day to day mark to market value fluctuates.
Notice also that the value of social security isn't discounted to present value. That's because it is inflation adjusted. The value of $20K/year in 2020 is the same as the value of $20K/year in 2030. No need to discount. In the article, it appears that the writer assumed a 22 year life expectancy; $20K x 22 years = $440K shown for Client B.
The other point to think about is why own bonds at all, if your guaranteed income stream (pension, annuities) is large enough to cover essential expenses. The article suggests that the reason is to let people sleep at night ("risk tolerance").
This consideration is real but emotional (since by hypothesis the risk is minimal). If people have trouble addressing this, they will also likely continue ignoring the present value of their income stream for asset allocation. Because all one sees on one's monthly brokerage statements are the assets in the portfolio.
Of course any form of insurance (social security, pensions, annuities) has a cost (overhead). This cost can be reclaimed via the flexibility to be more aggressive with the rest of one's portfolio. Similarly, keeping a cash reserve (see thread on how much cash to keep in retirement) allows one to be more aggressive with the remaining assets.

https://www.cnbc.com/2019/06/12/heres-why-advisors-may-urge-retirees-to-load-up-on-equities.html
Here’s why advisors may urge retirees to load up on equities
Key Points
With guaranteed income — pension, Social Security or income annuities — your client might have enough safety to step up his stock allocation in retirement, said Michael Finke, professor of wealth management at The American College.
Consider guaranteed income sources as being similar as bonds, Finke said. That means you can increase your stock allocation elsewhere.

- “My issue is related to ... RISK TOLERANCE ... Investing is so emotional for many of us. Its hard to sit by and watch your Account Balance go down the tubes.”
- “I've (incorrectly) gone to cash more often than I want to admit over the years. Though I am shy of my 50s, I am personally still all about preservation of capital.”
- “Combine this president, with his "Tariff policies", alongside a very, very long bull market...... and I am once again (cautious).” I am mostly in CASH. “

Hi @JoeD, You raise a lot of interesting points. Nothing much I can say, but some vague thoughts might help ...
Re risk tolerance - Everybody’s different based on their own life experiences and personality. You remind me of one time in the ‘80s when I had secured a good paying job and wished to do something nice for my aging parents. Knowing they weren’t very astute in money matters, I opened an account in their name in a reputable money market fund that was yielding something like a crazy 15-20% in those days. Gifted them $1,000 which was the minimum to open an account. I hoped they would let it grow into their retirement years, perhaps add to it, and that it might benefit them years later. While grateful, they were suspicious of this new-fangled type of account in a big city somewhere and almost immediately cashed-out and moved the money to their passbook account at a local bank yielding something like 3%. So for them (both products of the Depression), even a money market fund was way beyond their risk tolerance!
Going to cash can be risky from an investment standpoint. Sure, if you will need the money within a few years, it’s a smart move. But if you are doing it with the intent of reinvesting later on, it’s tough to pull-off. I’d rather invest in something like TRRIX (a lame 40/60 fund) if I was really worried about the markets. If your guess is right and the market tanks you will lose something - maybe 20% of your money. But over the very long-term the fund should allow you to sleep better and keep you at least ahead of inflation. FWIW - My gut tells me equities are overpriced. But I’m not going to bet the ranch on that gut feeling.
Missing is reference to the purpose for which you are investing. I’d assume it’s for retirement in another 10-15 years. With retirement that near, I’d be reluctant to go overboard with aggressive equity funds myself. However, I wouldn’t exclude equities completely. I started moving out of the really aggressive stuff at about age 50 (but retired in my early 50s). Again, there are many great conservative funds that will keep you out of deep trouble during a big sell off and still help you accumulate more for retirement than cash would. Furthermore; most of us dollar cost average into our equity positions during our working years. I’d think that during those years the temptation (or need) to “sell all” and move to cash would be lessened.
re: “Bizarro” politics. I may share your foreboding. But I think we do a disservice to @Junkster who devoted considerable time and thought into creating a pretty valuable thread if we move it into the political arena. So I won’t go there and hope others don’t. What I tell myself every day is that regardless of who is President or what type of government we become, great companies like Amazon, Boeing, Apple, Microsoft aren’t going to go away - at least any time soon. So we may be appalled by some of the politics taking place, but that shouldn’t deter us from investing in great capitalist companies and sharing in the wealth they create.
There’s no right answer to any of this. And nothing I said should be construed as investment advice.
Regards

If I had traded based on my opinions or personal biases over the years I would be looking at a very bleak retirement now. More often than not the market has run counter to my expectations. But I learned long ago not to trade based on my opinions and expectations but based on the action of the market itself. A good example was this past December. I was as bearish as anyone and expecting the long awaited corporate credit crisis to hit full force in 2019. I was ready to sit out the year drawing 2.50% in one of Fidelity’s money market market funds. But then out of the blue came a couple of huge and rare momentum days. So as bearish aa I was at the time, I had no choice but to get back into the grind. Trading is a hard game because a good trader has to admit they are often wrong. I think the above would also apply to investors unless one is a strict buy and holder.

FYI: Steven S. in Sylvania, Ohio, just hit one of his lifetime savings goals, and now he’s freaking out.
You’d think it would be a big celebration, reaching a big round savings number ahead of the rule-of-thumb schedules for being able to retire comfortably.
Instead, Steven’s freak-out is that he’s worried about breaking the benchmark — which in his case was amassing $500,000 in retirement savings — in the wrong direction the next time the market heads south.
“I’m excited to have reached $500,000, and before I reached age 50,” Steven said in an email, “but I’m terrified that if we have a bear market I’ll be way behind again. So I’m thinking of protecting what I’ve got by taking most of it out of the market.”
Regards,
Ted
https://www.seattletimes.com/business/investors-next-challenge-is-holding-on/

>> [@msf] Buffett's [mix] implicitly suggests 2.5 years of "near cash". I'd be inclined to go a bit higher and/or use bonds as a second tier resource between cash and equity investments.
Yeah, this to me is key to withstanding (= usually ignoring) all of these manufactured advice articles:
How many years of safe cashflow are you comfortable with projecting you need, meaning earning very little, and how many years of unlikely-to-dip bondy things after that? Not percentages of your total, only years' worth. 1, 2, 3, 4, what?
I just did major (for me) retirement rebalancing, trying this time to apportion more prudently b/w Roth and taxable, and wound up with 21% bondy-cash. More than 5y, gah.
A year and change is in MINT and non-earning dead cash (BoA savings). Better, 2y or more is in PCI, which can dip, but best of all it matches equity funds over certain stretches. The remainder is in PONAX and FRIFX.
I can live with this, or so I say now, and will move amounts into MINT every few months to keep it at perhaps a year's worth.

“Many asset managers’ websites don’t nudge retirement savers into favoring a Roth 401(k), however. The calculators they offer to compare the advantages of Roth and traditional 401(k)s often make Roths look second-rate.”
Think about it. Why encourage people to pay taxes before investing or do a conversion later in life which may result in their not having as much left over to invest? Your fiduciaries stand to get a higher “cut” from your higher pre-tax balance than after you’ve paid taxes on it. They’re charging their management fees on money which you’ll eventually need to cede back to Uncle Sam. Double-dipping in a sense.
I can’t speak to the wisdom (or lack thereof) of contributing to a Roth in the early years. May or may not make sense. But if you can afford to pay those taxes at some later point and convert, I think it makes a lot of sense - especially if you can do it with some depreciated asset that stands to rebound.
The thing to remember: All the money you earn on that Roth going forward (potentially for many years) is fully tax exempt. The gift that keeps on giving ...

I can only answer why I don't use it: I maximize my 401k PRE-tax contributions to the extent allowed by law, rather than opting for the Roth.
Very simply, I am in my peak earning years and my marginal tax rate during this time will likely be much higher than when I retire --- primarily as my income in retirement will be much lower.