Retirement Payment Strategy Being Tested

The recent volatility is testing my comfort with the retirement "paycheck" strategy.  My goal was to be volatility agnostic by creating a retirement "paycheck."  

This has worked so far, until this week. Due to interest rate increases, my fixed income and municipal bond positions have been falling...significantly since I started owning them earlier this year.   I have started to become concerned about volatility, especially with AI related positions, such as memory stocks.  I decided to sell my MU positions for a good profit of 23-34%.

Overall, I'm still continuing to hodl, but my conviction is wavering for the first time purchasing my "buy the dip" stocks earlier this year in February 2026.  Also, my municipal bond funds, which have been amazingly stable this year, are dropping as much as 1% in a day.  Finally, I expect some of my accounts my show a loss for 2026 due to fixed income and municipal bond fund principals falling in September.

Oh well, I shall see how it goes this month.   As they say, "It works until it doesn't."   

For more on Reaping the Rewards, check back every Friday for a new segment.

This is not financial, retirement income, nor retirement advice. Please consult a professional advisor.

Copyright © 2026 Achievement Catalyst, LLC

Bond Values Drop when Interest Rates Rise

Most of my account values are falling due to interest rates rising.  That's because bond/CD values go down when interest rates go up.  Similarly, bond/CD values go up when interest rates fall.

I'm not worried about bond/CD values going down since my plan is to hold to maturity, which means I receive 100% of par value, which is usually the issue price. While waiting for maturity, I am paid a 4-5% total annual payment for holding the bond/cd, no matter what the interest rate is.   The bond/CD payment is what is really important to me, and it will be consistent no matter what the interest rate is.   

That is my strategy for retirement income at this time so that I can be stock market volatility agnostic.  This will be one of the first tests on the strategy.

For more on Ideas You Can Use, check back every Tuesday for a new segment.

This is not financial, fixed income, nor retirement advice. Please consult a professional advisor.

Copyright © 2026 Achievement Catalyst, LLC

Striving to be Volatility Agnostic

Maintaining consistent monthly income is my current strategy for our retirement savings.  My goal is to maintain a specific income range, no matter what the stock market is doing, especially when it is declining.  To do this, I am investing in fixed income (CDs, bonds, and mutual funds) and dividend stocks, and reducing dependence on gains in stocks.  In addition, we have monthly Social Security payment and a quarterly distribution from a rental property.

Up until the end of 2025, the strategy has been working, but it has been mainly an advancing market.   Now, the test will be in a declining volatile market at is happening currently.  I'll see now if the "monthly paycheck" can be maintained in 2026.

For more on Strategies and Plans, check back every Monday for a new segment.

This is not financial, investment, nor fixed income  advice. Please consult a professional advisor.

Copyright © 2026 Achievement Catalyst, LLC

Social Security is not ENOUGH for Retirement

Depending only on Social Security in retirement is a big mistake, IMHO.  On average, social security replaces about 40% of pre-retirement earnings.   The balance needs to be made up from savings or withdrawals from retirement accounts.

However, the other issue is that expenses don't go down much in retirement and in some cases even go up.   House mortgage and expenses, real estate taxes, utilities, maintenance, and car payments remain the same.   Health insurance goes up, significantly if one still had dependent children, since it may have been subsidized by the employer.  Medical costs may also be higher over time. Finally, travel and vacations tend to result in higher spending.

In our case, health insurance and real estate taxes alone use up 83% of my Social Security benefit.  Fortunately, we don't have a mortgage nor a car payment.  If we did, those payments would cause us to exceed my Social Security benefit.

Of course everyone's situation is different and YMMV.  Our retirement expenses are higher due to having dependent children in our household, which is not the case for many retirees.  However, for planning purposes, it may be prudent to have about 60% of retirement spending come from a different source than Social Security.

For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

This is not financial nor retirement advice. Please consult a professional advisor.

Copyright © 2026 Achievement Catalyst, LLC

Already Working on Our 2025 Tax Return

The best time for to work on the current year tax return?  At least a month before the end of the year. That way, one can make adjustments to reduce tax liability for the current year. 

With all the tax changes in the OBBB bill that was passed in July 2025, I started working on our 2025 tax return in September 2025.  The reason is I wanted qualify for as many deductions and credits as possible to minimize our tax liability for 2025 .   

Here are the elements I am managing:

• Charitable contributions.  We are able to use charitable contribution for our itemized deductions to reduce taxable income.  We still have the rest of December to make additional charitable contributions.
• Medical deductions.   We are able to deduct medical expenses for our itemized deductions to reduce taxable income.   Doing a doctor visit in December instead of January will increase itemized deductions and reduced taxable income. 
• Distributions from an inherited IRA.   My spouse inherited an IRA after December 31, 2019, which means it must be fully distributed by the end of the 10th year.  In addition, RMDs must be taken in 2025.   Managing the distributions to be more tax efficient and minimize tax liability for the remaining 6 years will be a challenge and require some analysis and adjusting when to take discretionary income such as investment profits.
• Tax loss harvesting.  To reduce capital gains income, we are evaluating which investments losses to take in 2025.    Losses up to $3000 can be deducted from income on a tax return.

By managing the above elements I can enable us to qualify for the following tax benefits:

• Senior tax deduction.   Up to $6000 deduction per senior 65 or older.
• American opportunity credit. Credit of up to $2500 for up to $4000 of tuition paid for post secondary education.  
• Tax rate on Long Term Capital Gains and dividends lowered to 0%.  The tax rate is normally 15%.

Here are two tax benefits that we qualify for even without managing the above elements:

• Child tax credit.   Increased to $2200 tax credit from $2000 for each eligible child.
• SALT cap increases.   Increases the amount of deduction allowed from $10,000 to $40,000 State and Local Taxes.

In addition, I expect to get a higher that normal refund since we were withholding until October as if the OBBB bill did not pass.  I estimate the OBBB bill will reduce our tax liability by about 50% or more.

For more on Strategies and Plans, check back every Monday for a new segment.

This is not financial nor tax advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Another Call for a Bear Market Crash

Pundits have called 30 of the last 4 major bear markets correctly.  Some people are again calling for a bear market beginning tomorrow, Monday 12/15/25.

Do I know if a bear market is coming?   No.   Am I prepared for a bear market?   I think so.

Currently, are taxable accounts are invested a stock and bond portfolio designed to generate regular monthly income.   Our tax advantaged accounts are similarly invested.    If the market continues to go up, our account will participate in the gains.

If the market drops significantly, I expect to still generate about the same amount of regular monthly income.  Since, we have not have a drop since changing our investment strategy, we shall see if this work.   In addition, I will use some of the cash to buy into market index funds, such as SCHB, SCHG, VOO and MGK, to benefit from buying at discount.

Hopefully, the new strategy will insure us against major financial suffering with a significant bear market.

Disclosure:  I received no compensation from  Schwab nor Vanguard for mention of their index ETFs.

 

For more on New Beginnings, check back every Sunday for a new segment.

This is not financial nor investment advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Create Revenue for Retirement

In retirement, regular and steady revenue is a better metric than net worth or the size of a stock portfolio.  The reason is net worth include illiquid assets, such as one's home, which doesn't create income to cover expenses and a stock portfolio has volatility that may decline when funds are needed to cover retirement expenses.

With 20/20 hindsight, here's what I should have done by age to build retirement revenue.

• Ages 20-40.   Save and invest for growth on a regular (e.g. monthly) basis. Use taxable and Roth IRA accounts.  Invest 90-95% in a total market index fund.  Dollar cost average and invest more funds during dips.   Do not withdraw or spend any of these funds.  With the other 5-10%, invest, buy and sell individual stock that are monitored periodically.
• Ages 50-65. Continuing saving and investing in growth.  Start converting about 7% a year to income producing options:  CDs, bonds taxable and tax free, government treasuries.  Build a stream of steady dependable revenue that can be counted on during retirement.   If you plan to retire earlier than 65, start about 15 years before retirement age.
• Choose age to start Social Security payments to create a payment amount to complements one's revenue from savings.

In my case, I depended on growth investments much too long until my early 60s.  Also, I retired early at 49, much earlier than the timeline above, right at the start of the Great Recession in 2008.  I did take  Social Security at the right time, starting at 64.  

I was lucky to have survived a 2008 retirement due to the stock market recovering over the next 15 years and some deferred compensation payments.  There was no brilliance on my part, just a lot of learning that I should have done some things a bit differently.  Luckily, in 2022 interest rates started rising, which will help maintain our revenue generation until 2028.

My post My Sources of Retirement Income showed our 2024 retirement revenue by class as:

53% Interest and Dividends in taxable accounts

27% Social Security monthly payments

20% Rental Income quarterly payments

Also, we are starting to convert our retirement accounts from growth investments to income producing investments in preparation for when we will be required to make RMD withdrawals.

For more on Reaping the Rewards, check back every Friday for a new segment.

This is not financial, investment nor retirement advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC

Revenue Sources by Age

How should one think about revenue and the source?   Here's my point of view.

Revenue sources by age.

• Child -   Parents 100%.   One's parents are investing in one's potential.
• Adolescent -   Allowance provided by parents.
• Teenager -  Allowance and/or part time job.
• Young adult -  Wages from employment or earnings from self employment.
• Middle age adult -  Employment wages/earnings mostly and some investment income.
• Senior adult -  Balance of employment earnings and investment income.
• Retired adult -  Mostly social security, pension and investment income.

Importantly, revenue should be greater than expenses to be financially sound.

For more on The Practice of Personal Finance , check back every  Wednesday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2025 Achievement Catalyst, LLC