Morningstar ($MORN) podcast mentions
So I love that you just said 4%, but maybe it's 3% or maybe it's 5%. And what that says to me is that there is no rule. There is no rule there that has shown to work. I mean, every year now Morningstar rolls out a new figure for what the number is for this year. Like that, that's just mind-boggling. How are you going to know what the number is going to be when you actually get to retirement? And the— so the 4% rule, just to take a step back, basically says if you withdraw 4% of your retirement account the first year of retirement and then just adjust that number for inflation every year thereafter, the money should last you 30 years. But It doesn't hold up always. It holds up sometimes, but if you hit a bear market in the 10 years around your retirement, before or after, the chances that that money will actually go the distance go way down and down way too much for my comfort. What I'm suggesting with this paycheck model is that you take a chunk of your money, typically about a third, and you use it to either build yourself or buy yourself a paycheck that will last for the rest of your life, no matter how long that life turns out to be. You take the rest of your money, you invest it. And I would argue that you can actually invest it more aggressively because this paycheck, when combined with Social Security, should be enough that it covers those things that you need and those things that you really, really want, your things that you're not willing to compromise on at all. But the fact that you know it will continue to come enables you to spend. What we're seeing with retirees right now who have big balances in their retirement accounts is that they are not spending. And they're not spending because they're afraid that the money is going to run out. They're also not spending because because emotionally it turns out that after 40 years of watching the balance go up and up and up, seeing it go down feels really uncomfortable. It's like, it's like losing money and we hate losing money. So we're just not spending.
Jean Chatzky · So Money with Farnoosh Torabi · 2033: How to Build a Forever Paycheck in Retirement · 2026-09-09So, you know, I think you can't really look at ETFs through the same lens of how you look at a company because ETFs are generally more diversified ways to invest in some sort of asset class. Maybe you want small caps, maybe you want the aerospace industry. Maybe you want software names. And so the way that you should be looking at whether or not an ETF is one you want to invest in, there's a multitude of things. You know, there are companies like Morningstar that give them grades, which are good, but you really need to dive in and understand what those ETFs are investing in. So if I'm looking for a small-cap US small-cap fund, the S&P 600, which is calls itself a small-cap index, has a lot of mid-cap exposure. So if I purely want small-cap exposure, that's not where I should go. Your question should be, how good of a job does this specific ETF do at attacking the asset class or theme or whatever thing I'm trying to invest in? That's number one. Number two, do I understand what it's doing? Is it a black box, uh, of investment? Does it do a good job describing Is its investment strategy sensible in how it's attacking that asset class? And then also a really important thing as well, how much am I even being charged for this? If you're investing in US large caps, you shouldn't be paying more than 15, 20 basis points if it's broadly diversified. EM, 60, 70 basis points. Understand the different asset classes demand different costs. All of these things are critical to know when choosing an ETF.
Luke Guerrero · InvestTalk · Best of Caller Questions - Labor Day Edition · 2026-09-07So Morningstar, that's where I was going to go.
Dan Scali · The Compound and Friends · How to Pick Stocks Like Morgan Stanley · 2026-09-04