Retirement Income Planning

Thinking Out of the Box: Let me start with my conclusion and then explain my logic. Given the recent increase in funded status for Public Pension plans, it is my humble opinion that public plans are over-allocated to public/private equity. The average pension plan has ~60% exposure to public/private equities. Public plans actuarial return requirement has fallen to ~6%, the rate required to fulfill their pension distributions, while yields have risen and private credit has become a more optimal solution. Let’s unpack/debate 3 key points: 1. If a pension plan has a 6% return requirement and Private Credit can deliver 11-12% consistently year-after-year, then why not flip the script, and have 50% in Private Credit, and 10% multi-asset public credit to meet liquidity requirements - not 60% allocation to equities. Private Credit has evolved, it’s a defined asset class (prior to 2010 it was not). Muscle memory dictates that equities is the way to tilt for success. 2. Shockingly, the S&P 500 has compounded only +5% IRR per annum since January 1, 2000, a much lower than most think since it has generated a 20%+ IRR in 2023/24. There has been only 2 other times in past 100 years when equities had back-to-back 20%+ annual returns. As we close in on the first 1/4 of this century, equities have delivered a mere 5% annually. Traditional PE (top-quartile) has done well, while growth/venture have under-performed PE, except for the top 10% of this cohort. While I remain constructive for equities, one can argue that equities are rich—see chart below, while the bigger point is that fixed income is a better match v. fixed liabilities. 3. Insurance companies are highly regulated by the NAIC/state commissioner who require insurers to invest in fixed income to match asset vs. liabilities. In recent years, insurance companies have begun to invest more heavily in private credit given the meaningful yield pick-up vs. public fixed income. Led by the brilliant minds at Athene, other insurers have adopted this model of leaning into private credit. Insurance companies can allocate ~15% to private credit, only limited by the capital requirement imposed by regulators. Pension plans do not have this constraint and have significantly greater flexibility. In contrast, insurance companies also have liabilities to fulfill, yet they have just ~5% equity market exposure (percent of assets held by general account). Given the volatility of equities vs. the higher-for-longer return profile for private credit, capital allocators may want to consider these 3 key points (above). Public pension funds have an amazing model, staffed by brilliant CIOs with their strong investment staff(s). Partnering with their consulting firms, plan sponsors have a chance to flip this model, increasing the allocation to private credit that may be a better match vs. their liabilities. Is it time to rebalance?

This govt policy change can make you richer than most mutual funds. The rules of NPS (National Pension Scheme) were updated recently. These 4 new features make it stronger, cheaper and more flexible for anyone building long term money. 1️⃣ Full equity option - You can now put 100% of your NPS money in equity. - Earlier it was capped at 75%. - This matters because someone in their 20s now gets decades of equity compounding along with tax benefits in both tax regimes. 2️⃣ Lock in finally reduced - The lock in is now 15 years instead of waiting till 60. - This gives people the freedom to use their money for real goals like a home, kids’ education or even a career break. - It makes NPS practical, not just a retirement box. 3️⃣ Multiple schemes in one account - Earlier you picked one scheme and were stuck with it. - Now you can hold multiple products inside the same NPS. - It works like building a small portfolio with aggressive, balanced or conservative choices. 4️⃣ Fees increased but still very low - Charges moved from 0.09% to 0.30%. - But mutual funds usually charge 1 to 2%, and even direct plans start around 0.5 to 1%. - Over 30 years, this gap can add up to lakhs because lower costs support compounding. 5️⃣ Proposed changes (not confirmed yet) - Annuity requirements may drop from 40% to 20%. - Investment age might extend from 75 to 85. Both of these can push long term compounding even higher. Which change feels most useful to you? #GovernmentScheme #WealthBuilding

Retirement planning in India just got more flexible. For years, NPS felt rigid. Lock-ins, forced annuities, limited control. That’s what kept many people away. Here’s what actually changed. → You can now stay invested till 85, not just 60 This means more time for compounding if you don’t need the money immediately. → Mandatory annuity is down to 20% Earlier, a big chunk had to be converted into pension. Now, up to 80% can be taken as lump sum, giving real control. → Withdrawals are no longer a one-shot decision You can stagger withdrawals, almost like creating your own retirement cash flow. → Partial withdrawals are easier Life doesn’t wait till retirement, and NPS finally acknowledges that. At its core, NPS is still disciplined, regulated and tax-efficient. But it’s no longer inflexible. Think of it as retirement with guardrails, not handcuffs.

Going forward, the NPS will look completely different! 🚶♀️➡️🧓 Under its new chairman, Sivasubramanian Ramann, the regulator is shaking things up: New kinds of schemes are getting launched & there is a proposal to reduce annuities from 40% to 20% on exit. Unlike before, NPS subscribers will be able to hold multiple schemes in their account. Think of the new schemes as similar to MFs, which you can hold as many of them as you want. Just that it'll be focused on retirement planning and focus based on demographics, income level, persona, occupation, etc! For such schemes, there's a 15-year vesting period, which simply means if you're 30, then your money is locked in till 45. This is better than the current NPS schemes, which allow exit only after age 60. The new schemes will be allowed from Oct 1st, and the existing scheme will be called 'common schemes.' Both are separate types of NPS schemes and the new schemes will only be available for non-government subscribers. There are also other proposals, like reducing the mandatory annuitization from 40% to 20% on exit. They are also proposing to allow greater and more partial withdrawals. The pension regulator seems to be relaxing the rigidity of the NPS. But with the new changes, NPS might no longer be the plan vanilla retirement system it used to be. With more choices, investors need to be more proactive and choose schemes wisely. Read: https://lnkd.in/d48KWZ48

Most people don't know how long they'll live in retirement. That uncertainty is normal. But what they believe about how long retirement lasts has real consequences. Our new report shows that workers' expectations about retirement duration have a powerful effect on how they save. Those who expect a longer retirement save more, save more consistently, and plan more carefully. Those who expect a short retirement? Far less so. Only about half of workers who expect fewer than 10 years in retirement save regularly. Among those who do, contributions are modest. Compare that to workers who anticipate 30 or more years in retirement: 71% save regularly, and at meaningfully higher rates. This matters because those expectations don't form in a vacuum. They are shaped, in large part, by how workers perceive general life expectancy. And on that question, many workers are simply wrong. Thirty-six percent underestimate how long 65-year-olds typically live. Another 18% admit they don't know. Workers who underestimate life expectancy tend to expect shorter retirements and, as a result, save less and plan less. If a long retirement does arrive, they may not be financially prepared for it. When workers don't have accurate information about how long people typically live past 65, their planning horizons are effectively too short. Better longevity literacy can shift expectations and, with them, behavior. Retirement security starts with understanding what retirement might actually look like. That means not only knowing how to save, but understanding why the time horizon matters so much. Here is the link to the report from the Global Financial Literacy Excellence Center (GFLEC) and the TIAA Institute, take a look: https://lnkd.in/gvnKMzwH

The global retirement landscape is undergoing profound change. Longer lifespans, economic pressures, shifting labor trends, and policy dynamics are challenging how retirement systems support income and long‑term security.   Today, State Street is proud to launch Reimagining Retirement, a multi-part research series that will examine this transformation and its implications for institutional investors, policymakers, and savers. Drawing on the deep expertise from all our businesses, this first installment looks across 15 global markets to understand the retirement landscape today. It is essential reading for anybody interested in the future of the retirement space: https://lnkd.in/eq22k9VZ

Powerful strategy for solopreneurs: - Start an LLC - Grow and Become an S Corporation: This can provide significant tax advantages by allowing you to split your income between salary and distributions, potentially reducing your overall tax liability. But make sure to optimize the qualified business income deduction - Pay Yourself a Reasonable Salary: As an S Corp owner, pay yourself a reasonable salary that reflects the market rate for your role. This salary is subject to payroll taxes, but any additional profits can be taken as distributions, which are not subject to self-employment tax. - Add a Solo 401(k) and Max It Out: Establish a Solo 401(k) plan to take advantage of tax-deferred retirement savings. As both the employer and employee, you can contribute up to the maximum allowable limit, significantly boosting your retirement savings while reducing your taxable income. But make sure your salary is not too low, it will impact what can go in here - Employ Your Spouse: If your spouse can perform meaningful work for your business, employ them and pay a fair salary. - Max Out Solo 401(k) for Spouse: By employing your spouse, you can also contribute to their Solo 401(k) plan, further increasing your family's retirement savings and reducing your taxable income - Backdoor Roth IRA for Each: Utilize the backdoor Roth IRA strategy for both you and your spouse. This involves making non-deductible contributions to a traditional IRA and then converting those funds to a Roth IRA, allowing for tax-free growth and withdrawals in retirement - Maximize Qualified Business Income Deduction (QBID): Take full advantage of the Qualified Business Income Deduction (QBID), which allows eligible S Corp owners to deduct up to 20% of their qualified business income (or lesser of that and 50% of w2 wages). This can significantly reduce your taxable income and increase your overall tax savings. - If salary is too low to max solo 401(k), then do mega backdoor Roth 401(K) to the $69,000 limit Implementing these strategies can help solopreneurs optimize their financial planning, reduce tax liabilities, and build substantial retirement savings

The new retirement? No retirement. Northwestern Mutual's 2025 study says Americans need $1.26 million to retire comfortably. Yet LinkedIn data shows baby boomers are returning to work at rates not seen since before the pandemic. Last week, a friend who retired at 67 called me in a panic. His portfolio dropped 22% in 2022 while inflation ate into his purchasing power. "Andy, I'm going back to work," he said. "I can't shake the feeling I'll outlive my savings." Here's what many retirees miss. It's not just about having enough money. It's about managing it through market cycles. After 26 years as a financial advisor, I've learned the most successful retirees don't set their allocation and forget it. They stay tactical within guardrails. The 10% Rule That Changes Everything: Start with your strategic allocation—let's say 60% stocks, 40% bonds. But give yourself permission to adjust plus or minus 10% based on market conditions. Economy humming? Maybe you're 70/30. Recession clouds forming? Dial back to 50/50. You're always balanced. Always diversified. But you're not sitting still while markets shift around you. My friend? Instead of going back to full-time work, he's consulting. Working 10-15 hours a week doing something you enjoy? That's not failure. That's freedom. It lets your portfolio breathe while keeping you engaged. The new retirement reality... your best hedge against outliving your money isn't just saving more. It's staying flexible, both with your portfolio and your plans. What's your approach to managing risk in retirement? #RetirementPlanning #FinancialAdvisor #BabyBoomers #LITrendingTopics #Retirement

𝐁𝐞𝐲𝐨𝐧𝐝 𝐏𝐞𝐧𝐬𝐢𝐨𝐧𝐬: 𝐇𝐨𝐰 𝐆𝐥𝐨𝐛𝐚𝐥 𝐅𝐢𝐫𝐦𝐬 𝐀𝐫𝐞 𝐄𝐧𝐠𝐢𝐧𝐞𝐞𝐫𝐢𝐧𝐠 𝐅𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐑𝐞𝐬𝐢𝐥𝐢𝐞𝐧𝐜𝐞 𝐟𝐨𝐫 𝐀𝐠𝐢𝐧𝐠 𝐒𝐨𝐜𝐢𝐞𝐭𝐢𝐞𝐬 Asia is entering a silent demographic turning point. Nearly One billion people in the region risk outliving their retirement savings, 𝐰𝐡𝐢𝐥𝐞 𝐛𝐲 𝟐𝟎𝟓𝟎 𝐭𝐡𝐞 𝐠𝐥𝐨𝐛𝐚𝐥 𝟔𝟎 𝐩𝐥𝐮𝐬 𝐩𝐨𝐩𝐮𝐥𝐚𝐭𝐢𝐨𝐧 𝐰𝐢𝐥𝐥 𝐞𝐱𝐜𝐞𝐞𝐝 𝟐.𝟏 𝐛𝐢𝐥𝐥𝐢𝐨𝐧. Longer life expectancy without financial preparedness can translate into extended years of vulnerability - especially for women, who may outlive savings by 8–20 years and spend up to 50% of later life in sub-optimal health. Traditional pension structures alone cannot sustain this scale of ageing. The emerging “longevity economy” therefore demands integrated solutions combining financial planning, preventive healthcare, digital tools, and policy innovation. Encouragingly, global collaborations led by institutions such as the 𝐖𝐨𝐫𝐥𝐝 𝐄𝐜𝐨𝐧𝐨𝐦𝐢𝐜 𝐅𝐨𝐫𝐮𝐦 including initiatives with 𝐌𝐚𝐧𝐮𝐥𝐢𝐟𝐞 are fostering AI-driven financial decision tools, new insurance models, and innovation ecosystems to strengthen long-term resilience. Manulife, one of the world’s largest life insurers and asset managers with over US$1.4 trillion in assets under management and administration and operations across Asia, is playing a pivotal role in reshaping retirement security for ageing populations. Manulife is supporting development of AI-driven financial planning tools, personalized retirement models, preventive health incentives, and hybrid insurance-investment products designed for longer lifespans. The company is also investing in digital platforms that integrate health data, spending behavior, and longevity projections to guide real-time financial decisions, moving beyond static retirement plans toward adaptive life-cycle planning. While Asia-focused giants such as 𝐀𝐈𝐀 𝐆𝐫𝐨𝐮𝐩 𝐚𝐧𝐝 𝐏𝐫𝐮𝐝𝐞𝐧𝐭𝐢𝐚𝐥 𝐩𝐥𝐜 are expanding digital insurance ecosystems that integrate savings, protection, and wellness into a single life-planning framework. Meanwhile, European leaders like 𝐀𝐥𝐥𝐢𝐚𝐧𝐳 are investing heavily in sustainable pension products and climate-risk-adjusted portfolios, and China’s 𝐏𝐢𝐧𝐠 𝐀𝐧 𝐈𝐧𝐬𝐮𝐫𝐚𝐧𝐜𝐞 is pioneering AI-powered healthcare-finance integration serving hundreds of millions of users. Collectively, these firms manage tens of trillions of dollars in assets and are responding to a critical demographic reality: by 2050, Asia will house over 1.3 billion people aged 60 plus, making retirement financing one of the region’s largest economic challenges and opportunities For governments, businesses, and citizens alike, the message is clear: Longevity without preparedness can become a liability; longevity with planning becomes a dividend. #retirement #longevity #healthinsurance #pensionplan #asia #longevity economy #retirementsavings #asiapoppulation

You're making $200,000 as a solo biz owner. One vehicle can boost your wealth strategy dramatically. A Solo 401(k). It's just like a regular 401(k). But you get more flexibility with it. You can contribute up to $23,500 on the employee side. Each of which can be either pre-tax or Roth. (It's not an IRA so no income limits) But that's not all. Since you are also the "employer", you can also match in here. This amount can be up to 20%-25% of the salary to the employee (AKA yourself) However, that's not where the magic occurs. If the plan allows and you have enough income, you could contribute additional after-tax money into it. This money can then be converted into the Roth portion. Also called a Megabackdoor Roth. So in summary: The employee limit + employer match + after-tax = $70,000 limit for 2025 It essentially becomes a super vehicle for solo biz owners. - More investment choices - Larger contribution limits - Better choices in tax location - More flexibility with administration You should always prioritize reinvesting in the business. But when you are ready to diversify away? This is your partner in finance.