Eberst Wealth Management — Journal

What thirty years has taught me about retirement income

hello@eberstwealth.com (Bruce Eberst) — Fri, 15 May 2026 00:00:00 GMT

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The market has surprised me many times in thirty years. People — far fewer.

What surprises clients most, when they first sit down to plan retirement, is how little of the work is about predicting markets, and how much of it is about preparing for ordinary human life: a daughter’s wedding, a husband’s surgery, a roof that needs replacing, a car that finally has to be a car and not a deferred decision. The market does its thing. Life does its thing. The plan has to hold both.

<PullQuote attribution=“A client, twenty-something years in”> You don’t really know how the plan works until you stop earning. </PullQuote>

When I started in this business in the mid-1990s, “retirement income” mostly meant pensions, Social Security, and a portfolio that you withdrew from at four percent. The defined-benefit pension is mostly gone now. Social Security is still here, and useful, and rarely optimized. The four-percent rule is still here, and useful, and rarely the whole answer.

What’s changed is the responsibility. The risk of getting it wrong used to belong to an employer or an insurer. Now it belongs to you. Most retirees I meet have two questions, even if they don’t quite phrase them this way: will the money last, and who is paying attention. Almost everything we do together is in service of those two questions.

What actually matters

A few things, in the order I think about them:

Spending you can defend. Not a budget. A picture of what your real life costs, including the parts that vary — the trip you’ll take, the help you’ll hire, the medicine you didn’t plan to need. Most plans I review underestimate variability and overestimate discipline.

Income that doesn’t depend on guessing. A portion of your retirement income — Social Security, a pension if you have one, sometimes an annuity if it earns its place — should arrive every month whether the market is up or down. You should be able to afford the essentials without selling anything. The rest of the portfolio can then do what portfolios do, which includes occasionally falling forty percent.

A bucket between the two. A short-term reserve, big enough that you’ll never be forced to sell long-term assets at the wrong moment. This is the single most under-appreciated decision in retirement planning. Two or three years of essential spending in something you don’t have to flinch about owning.

Costs you can see and explain. Fees compound the same way returns do. I don’t believe the cheapest portfolio is always the right one — but I don’t believe an opaque one is ever the right one. If you can’t write down what you’re paying and what for, something is wrong.

Insurance where it actually fits. Not as a product to sell, but as a tool to use. Sometimes it fits. Sometimes it doesn’t. Anyone who tells you otherwise from the first conversation is selling, not advising.

Behavior, behavior, behavior. The market has not in three decades ruined a single retirement I’ve worked on. Decisions have. The most expensive ones almost always begin with the words “I just had a feeling.”

<Aside title=“A short test”> When you read your last quarterly statement, what was your first thought? Am I okay is a good thought. Should I have done something different last quarter is an expensive one. I wonder what Bruce thinks is the one I hope you have — because that’s a conversation, not a transaction. </Aside>

What I’ve stopped trying to do

Predict the market. Time the market. Talk anyone into a strategy they don’t believe. Apologize for being conservative.

In thirty years the most successful retirement plans I’ve watched have one thing in common: they were boring on purpose. The clients were not bored — they were busy living. The plan, behind the scenes, was just doing its work.

That’s the work. Quiet, integrated, attentive. Designed to last at least as long as you do, and quite possibly longer.

If you ever want to talk about whether yours is doing that, you know how to reach me.

— Bruce

When an annuity earns its place

hello@eberstwealth.com (Bruce Eberst) — Fri, 08 May 2026 00:00:00 GMT

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Most of what gets written about annuities is written by someone selling them or someone who hates them. Neither is helpful when you have actual money and an actual life to plan for.

I have spent thirty years sitting across from people trying to figure out whether annuities belong in their retirement plan. The honest answer is: sometimes. Not as often as the brochure says. Not as rarely as the column in the Wall Street Journal says. The decision depends on what you’re actually trying to solve, what else you own, and what you are willing to live with.

What an annuity actually is

An annuity is a contract with an insurance company. You give them money — once or over time — and in exchange they promise to pay you money back, on terms specified up front. That’s it. Everything else is variation on that one idea.

There are simple annuities and complicated annuities. Simple ones (a single-premium immediate annuity, or “SPIA”) trade a lump sum for income for life. Complicated ones (variable annuities, fixed-indexed annuities) add features — market participation, principal protection, optional riders — and, because complexity costs money, they cost more.

The complexity is not inherently bad. Sometimes it solves a real problem. But complexity is never free, and a complicated annuity that solves no problem you actually have is an expensive way to feel safe.

The two real problems annuities solve

Longevity risk. The risk that you live longer than your money was planned to last. A SPIA is the cleanest way to handle this — at the cost of giving up principal, you can buy a paycheck for life. For someone with a healthy life expectancy and modest other guaranteed income, this can be the most efficient income tool there is.

Behavioral risk. The risk that you, faced with a forty-percent drawdown in year three of retirement, do something you’ll regret. A portion of guaranteed income — Social Security plus an annuity — can lower the emotional stakes of the rest of the portfolio enough that you stop trying to manage it through fear. That has real economic value, even if it doesn’t show up in a Monte Carlo.

<PullQuote> The annuity isn’t the solution. The certainty is the solution. The annuity is one way to buy it. </PullQuote>

Where annuities don’t earn their place

If you already have enough guaranteed income to cover essential expenses — pension plus Social Security plus rental income, say — you may not need any more. A second layer of certainty costs the same as the first but solves less. The math is unforgiving on this.

If your portfolio is large enough that the failure rate at a reasonable withdrawal level is already small, an annuity may just be expensive insurance against an event that wasn’t going to happen.

If liquidity matters more than guaranteed income — because of business interests, large unfunded liabilities, or the desire to make a significant gift to children — locking up principal in an annuity is the wrong tool.

If you don’t understand the contract, you don’t own it yet. You can buy an annuity that promises something you can’t articulate; you can also buy one with a surrender period that quietly removes options for the next decade. Both are common. Neither is okay.

How I think about it in practice

Three questions, in order:

What gap are we trying to fill? Income to cover essentials, longevity protection, or behavioral protection? Each implies different products — and sometimes no product at all.
Have we maximized what’s already free? Social Security claiming strategy alone can produce more guaranteed lifetime income than most people realize. We exhaust this first.
If a product makes sense, what’s the simplest version that solves it? A SPIA is usually simpler than a variable annuity with a guaranteed lifetime withdrawal benefit. Simpler is usually better. Where complexity is needed, we account for what it costs.

<Aside title=“An uncomfortable truth”> Annuities pay commissions. Some of them, large ones. That fact is not, on its own, a reason against any particular annuity. But it is a reason to look hard at the alternatives, and at the recommendation, and at the person making it. The right test is not “how is everyone paid” — it is “would I still recommend this if I weren’t paid for it.” Hold any advisor to that test, including me. </Aside>

The shape of a good decision

A good decision about an annuity looks like this: you can describe, in your own words, what problem it solves; you can describe what it costs; you have compared it to the alternative of doing nothing; and you have compared it to the alternative of solving the problem some other way. If you can do all four, the decision is yours to make.

If you can’t, the decision isn’t ready yet. That’s almost always the right place to stop.

— Bruce

The cost of guessing

hello@eberstwealth.com (Bruce Eberst) — Fri, 01 May 2026 00:00:00 GMT

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The phrase “I think the market is going to” is the most expensive phrase in personal finance. Not because it’s always wrong — sometimes it’s right — but because being right occasionally costs about the same as being wrong consistently. The math of market timing is one of those quietly cruel facts of investing: the asymmetry is against you.

Consider what’s actually required to make a successful timing decision. You have to be right about the direction. You have to be right about the magnitude. You have to be right about the duration. And then — the part most people skip — you have to be right about when to go back in. Four correct guesses, in a row, on something that has resisted prediction for a hundred years.

<PullQuote> You don’t get hurt by missing the worst days. You get hurt by missing the best ones. </PullQuote>

The historical evidence is unkind to timers. Most of the long-term return of the market comes from a small number of days, and those days cluster around the worst days. The best and worst trading sessions of any decade are often the same week. The investor who steps out to avoid the bad days almost always misses the good ones, because their distribution is the same distribution.

This is not a moral lesson about discipline. It’s an arithmetic one. The cost of missing the top ten days of a decade is roughly half the total return of that decade. The cost of missing the top thirty is most of it. There is no way to systematically catch the good days while ducking the bad ones, because they don’t come labeled.

What this means in practice

For a retired or nearly-retired investor, the temptation is sharpest. The portfolio is the largest it’s ever been; the consequences feel personal; the news is loud. The reflex is to “do something.” Almost always, the something that’s right to do is something you already decided to do — in a calmer year, on a different page of the plan.

So I tell clients: the plan is for the loud years. The work we do now is so that when the news is awful, your rule is already written. Two years of essential spending in something steady. A long-term portfolio that you don’t have to touch. A schedule for rebalancing that has nothing to do with how you feel.

When you have a rule, you don’t have to guess. The cost of guessing is what the rule is buying you out of.

— Bruce

Planning for the long retirement

hello@eberstwealth.com (Bruce Eberst) — Fri, 24 Apr 2026 00:00:00 GMT

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The retirement you are planning for is probably longer than the retirement you grew up watching. That’s the single most consequential demographic fact in personal finance today, and it’s the one most plans don’t fully reckon with.

A couple retiring at sixty-five in good health today has roughly a one-in-two chance that at least one of them will live to ninety. A one-in-four chance that one will reach ninety-five. A meaningful chance — small, but not negligible — that one will reach a hundred. The plan that runs out of room at age ninety is not a plan; it is an optimistic projection.

<PullQuote> The question isn’t “what if the market is bad.” The question is “what if you’re alive longer than you expected.” </PullQuote>

What changes when you plan for thirty years

Several things, all of them quietly important.

Sequence-of-returns risk becomes the central problem. A bad market in the first five years of retirement, while you are withdrawing, can ruin a plan that would have worked easily if the bad market had come ten years later. Two retirees with identical lifetime average returns can have radically different outcomes if one happens to retire into a downturn. The plan has to be designed for the sequence, not just the average.

Inflation becomes a real adversary, not a footnote. A three-percent inflation rate doubles your cost of living in twenty-four years. If your retirement plan ends with the same nominal income it began with, it ends with about half the purchasing power. Real returns, not nominal returns, are the only thing that matters over decades.

Cognitive change becomes a financial event. Most retirees will, at some point, lose some of the capacity to manage complex finances themselves. The decisions that matter most — when to claim Social Security, how to handle a windfall, when to downsize — are not the decisions you want to be making for the first time at eighty-five. The plan should be written down clearly enough that someone else can read it, and a trusted relationship should be in place long before it is needed.

Healthcare becomes the plan within the plan. Medicare is necessary; it is not sufficient. The cost of late-life care — long-term care, in-home help, the difference between “aging in place” and “aging without dignity” — is the single largest unfunded liability for most affluent retirees. There are several ways to plan for it. Pretending it won’t happen is not one of them.

<Aside title=“The hardest conversation”> The conversations that matter most in long-horizon planning are not about investments. They are about how you want to live as you get older, who will help, where you will live, what you would like to leave, and what you would not. These are not financial questions, exactly. But they shape every financial decision. The advisors who avoid them are not protecting you. The ones who walk you through them are. </Aside>

How we plan for it

A few practical things we do for any client who’s planning for a long retirement:

Stress-test the plan against bad sequences, not just bad averages. A plan that survives the 1973-1974 starting point, or the 2000-2002 starting point, is meaningfully more robust than one that just averages historical returns.

Build in flexibility, not optimism. A plan that requires everything to go right is fragile. A plan that has options at every five-year checkpoint — sell the second home, move closer to family, downsize, accelerate gifting — is robust.

Coordinate with the rest of the family early. Estate documents, beneficiary designations, healthcare proxies, and the names of the people who will eventually act on your behalf are part of the plan. They belong in the plan, not in a drawer.

Talk about the plan, not just the portfolio. I have known clients for twenty years whose portfolios are perfectly managed and whose plans were never written down. That is a portfolio. It is not a plan.

The retirement you are planning for will probably be longer than the average retirement of the previous generation. Plan accordingly. Quietly, integrated, attentively, designed to last.

If you’d like to talk about whether yours is doing that, you know how to reach me.

— Bruce