How to Plan for Your Go-Go Years in Retirement | Live Q&A

Finance-focused retirement modeling (Go-Go / Slowgo / No-go) + taxes/withdrawals

Core retirement concept: variable spending by “go-go” periods

• The presenter explains “go-go / slowgo / no-go” spending patterns in retirement:
  • First decade after retirement (go-go): higher spending (travel, eating out, more activity), typically in the 60s.
  • Later decades (slowgo/no-go): spending generally slows in the 70s and 80s, with exceptions.
• Key planning insight:
  • The common 4% rule assumes flat inflation-adjusted spending, but real spending changes year-to-year.
  • Recommendation: explicitly model spending paths in retirement software rather than assuming constant spending.

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Step-by-step framework in retirement planning software (expense “phases”)

The presenter demonstrates how to model spending “phases” as separate expense streams in tools such as:

• Boldin
• Projection Lab
• (Noted: Empower can do it too)

How to set up in the software

• In the software’s Expenses section:
  • Keep recurring “living expenses” that last for the entire plan
    • Example: $3,500/month, marked for lifetime
  • Add a separate recurring expense for Go-go years
    • Example: $2,000/month
    • Start age: 65
    • End age: 75
    • Duration: 10 years
  • Add similar structured expenses for:
    • Slowgo years (later start/end)
    • No-go years (even later)
• Support for other spending types:
  • One-time expenses can be modeled (e.g., a major trip).
  • Expenses can be layered on top of baseline living expenses to test how timing impacts survivability (sequence risk vs when spending occurs).
• Emphasis:
  • Use software to see how spending timing changes plan survivability.

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Social Security survivor planning and “widow’s penalty” risk

For a plan where one spouse dies:

• Income drop risk

  • Loss of the lower Social Security check can be a major hit
    • Example referenced: roughly $3,000/month.

• Expense changes

  • Medicare costs for the deceased spouse may drop, so expenses often fall, though not necessarily by 50% immediately.

• Tax risk: “widow’s penalty”

  • After the year of death, filing status may revert to single, causing tax brackets to be reached sooner.
  • Combined with RMDs and other income, this can produce higher taxes than expected.

Proposed approach

• Model the scenario in retirement software by creating a separate plan and testing assumptions where one spouse passes early.

Mitigations mentioned (no “magic bullet”)

• Reduce spending
• Possibly work longer / part-time
• Insurance was mentioned, but cautioned as potentially very expensive as age increases

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Critique of “bond-only” retirement philosophy (inflation + interest-rate risk)

A question about retiring by living off bonds came with key caveats:

• Clarify what kind of bonds:
  • Nominal vs inflation-protected
• In high inflation regimes (e.g., the 1970s/early 1980s), bond-heavy portfolios can be “crushed.”
• Bonds still carry risks:
  • Inflation risk
  • Interest rate risk

Partial inflation protection idea

• Consider a TIPS ladder
  • Holding TIPS to maturity protects against CPI-based inflation (in theory).

Allocation concept

• Any excess beyond inflation coverage can be allocated to stocks/balanced portfolios, depending on desired coverage (e.g., cover 100% of expenses vs 75%+ while taking risk on the remainder).

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Account drawdown order + tax bracket management

Rule of thumb (withdrawal ordering)

• Common guideline discussed:
  • Taxable first → tax-deferred next → Roth last
• Rationale:
  • Keep money in retirement accounts longer for tax deferral and preserve tax-free Roth growth.

Important cautions Withdrawals may need to be shaped to avoid:

• Triggering/exceeding a tax bracket
• Affecting ACA credits
• Avoiding income thresholds tied to Medicare/IRMA effects

Software tool for tax planning

• In Projection Lab, tax strategy/drawdown optimization can include:
  • Roth conversions
  • Drawdown ordering
  • Gain harvesting
• Ability to target a tax bracket
  • Example referenced: targeting the 12% bracket
• Practical caution:
  • Year-by-year implementation should be checked with a tax preparer to ensure real outcomes match the plan.

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Bucket strategy vs rebalancing (and “cash buffers”)

• The presenter challenged modern “bucket” implementations:
  • Earlier withdrawal research often assumed annual rebalancing, not separate cash buckets.
  • “Bucket strategy” described as more of a post-GFC phenomenon.
• Cash buffer critique
  • Large cash buffers can create long-term return drag.

How the presenter would operationalize spending

• Rebalance via the structure of a balanced portfolio / target-date fund that automatically rebalances, rather than net-selling stocks during down markets.

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Withdrawal-rate question using go-go / slowgo / no-go

A question was asked about using different early vs later withdrawal rates, such as:

• 5.5% during go-go years
• 4% during slowgo years
• 3%–3.5% during no-go years

Presenter response

• Likely it could “probably work” off the cuff, but:
  • Verify using retirement planning software because spending is variable.
  • Long-horizon items (e.g., long-term care) must be reflected.
• Long-term care note:
  • Some tools (example: Boldin) are said to incorporate long-term care near the end of life (roughly last ~3 years).

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TIPS ladder vs TIPS fund; “fat final rung”

TIPS ladder

• Buy individual TIPS rungs that mature, providing inflation-adjusted cash flow.

TIPS fund

• A fund holds TIPS; payouts depend on structure and typically won’t replicate ladder “maturity checks.”

“Fat final rung” concept

• Build a ladder where the final maturity holds more principal.
• Purpose:
  • Use the larger inflation-adjusted payoff later to purchase an SPIA (Single Premium Immediate Annuity).

Numerical points cited

• TIPS long-term real yield:
  • Mentioned around ~3%
  • Then “shot up” to roughly 3.396% (attributed to CNBC)

Longevity risk mitigation preference

• Strong preference for delaying Social Security as “best longevity insurance.”

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Fee / advisor discussion (poll + perspective)

Live polling results:

• ~13% of viewers use an investment advisor
• Among those:
  • 75% do not pay an AUM percentage fee
  • 16% pay less than 1%

Additional disclosures:

• Presenter intent to publish a video about fees
• Donor-advised fund fees:
  • Example: Vanguard DAF fees around 60 bps
  • Discussion included why fees matter even if money isn’t “yours,” since distributions typically happen relatively quickly (not held for decades)

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Investment examples / tickers and instruments mentioned

Equities / equity ETFs/funds

• VTI (Vanguard Total US Stock Fund)
• VBR (small-cap value ETF)
• VEU (“Footsie all world” / international equity exposure)
• VWO (emerging markets; clarified vs REIT)
• VT (Vanguard Total World/global stock fund referenced as an alternative)
• SPY / S&P 500 (referenced via index discussion)

Bonds / TIPS / bond funds

• VCIT (intermediate-term corporate bond fund)
• BND (US bond fund referenced as an example)
• TIPS (inflation-protected Treasury; also referenced for laddering)
• BNDX (international bond fund referenced)
• VMFXX (Vanguard Federal Money Market Fund referenced)

Retirement/annuity products

• SPIA (Single Premium Immediate Annuity)
• TIPS ladder

Other

• DAF / DAF (donor-advised fund)
• CLLO (collateralized loan obligation) mentioned as something the presenter hadn’t researched
• Precious metals: gold and silver (treated as commodities/precious metals)

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Key performance / rates / numbers explicitly mentioned

• Example modeling spending:
  • $3,500/month living expenses (lifetime)
  • $2,000/month go-go add-on (age 65 to 75, 10 years)
• Example withdrawal-rate split:
  • 5.5% go-go
  • 4% slowgo
  • 3%–3.5% no-go
• TIPS real yield:
  • Around ~3.396% (and conceptually around ~3%)
• Social Security survivor framing:
  • Example cited: about $3,000/month loss/replacement framing

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Disclosures / disclaimers

• No explicit “not financial advice” line is shown in the provided subtitles.
• Presenter expresses uncertainty on some topics (e.g., “not optimistic…”, “not sure…”, “I don’t know…”) and acknowledges limitations (e.g., unfamiliarity with CLLO).

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Presenters / sources mentioned

• Rob (main presenter)
• Viewers/personalities mentioned in passing:
  • Aaron (Aaron Talks Money)
  • Jeff Schmidt (“Holy Schmidt”)
  • Harold (referenced in withdrawal research history context)
  • Edison (viewer question)
• Sources/tools referenced:
  • Fidelity (paper referenced; details not shown)
  • Bill Bengen (implicitly referenced via withdrawal research context)
  • CNBC (source for the cited TIPS real yield)
  • Vanguard (funds and DAF fee discussion)