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The secrets to a successful retirement? Planning, spending, and social connections.

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The secrets to a successful retirement? Planning, spending, and social connections.

Listen and subscribe to Decoding Retirement on Apple Podcasts, Spotify, or wherever you find your favorite podcasts.

How might you go about having a happy, successful, and wealthy retirement?

In her new book, “How to Retire,” Christine Benz, the director of personal finance and retirement at Morningstar, interviewed many of the nation’s top retirement experts and distilled their discussions into 20 lessons for doing just that.

In a recent Decoding Retirement podcast, Benz shared some of the top takeaways from those conversations. Lesson one, she said, is to visualize your retirement lifestyle and put habits in place to make it happen.

“The point is that we’re all wired a little bit differently in terms of what we want from our retirement cash flows,” Benz said. “A broader message of this book is there’s more than one way to do this. … You should give a little thought to what you specifically are looking for.”

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In one interview, Fritz Gilbert, the author of “The Keys to a Successful Retirement” and the Retirement Manifesto blog, emphasized the importance of taking thoughtful steps before retiring.

For her part, Benz said phasing into retirement, starting around age 50, is a best practice. And you don’t have to take concrete steps; you can just start thinking about which parts of your work you like and dislike.

“Starting early, I think, is such a valuable piece of advice from Fritz,” Benz said.

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Consider making decisions about your work life in the years leading up to retirement, either in “stealth mode” or through candid discussions with your employer. Then, take additional steps, such as saving contact information and personal files from your work computer.

You might also consider “dabbling” in retirement activities before fully retiring, Benz said, as this can help ensure you’re “in the driver’s seat” as you move into the next phase of retirement.

Michael Finke, a professor at the American College of Financial Services, pointed out in his interview with Benz that retirement is not all about relaxation, leisure activities, and free time. After all, you need something to relax from.

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“The best relaxation comes after you’ve actually accomplished something,” Benz said. “You need to figure out a way to have a sense that you are accomplishing something.”

His actionable advice: Find an “animating force” that provides a sense of purpose in retirement, such as volunteering, continued work in some capacity, or reengaging with family.

“The main point is that even when you step away from work, you need to look at where you will go for some of the balance and structure and purpose and identity that your work provided you with,” Benz said.

Read more: Retirement planning: A step-by-step guide

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In her interview with Laura Carstensen, the director of the Stanford Center on Longevity, Benz learned that work is good for us in that it helps us maintain social connections.

“Social connections mean a lot to our life satisfaction,” said Benz.

Given that, you should preemptively think about where you will find day-to-day interactions after leaving work. “Make sure that you are replacing work friendships with friendships outside of work because those work friendships may not stand the test of time,” Benz said.

Two elderly men playing a board game in Aveiro, Portugal. (Photo by: Nano Calvo/VWPics/Universal Images Group via Getty Images)
Two elderly men playing a board game in Aveiro, Portugal. (Nano Calvo/VWPics/Universal Images Group via Getty Images) · VW Pics via Getty Images

Understand that social networks may shrink with age, partly due to loss and partly due to self-selection toward a closer “inner circle.”

“As we age, we tend to want to spend more time with the inner circle, that very tight network of people who totally get us where, when we walk away from being with them, we’re like walking on air because we feel so completely understood,” Benz said.

Benz also noted that men, in particular, should be proactive in maintaining and building social circles outside of work.

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Carstensen’s point, Benz said, is that “it’s OK to have your network shrink a little bit as you age,” but “you don’t want that social network to get too small. You don’t want to be down to just, say, two or three people.”

In another interview, David Blanchett, the head of retirement research at PGIM DC Solutions, noted that retiree spending — even among high-income households — tends to trend down over time but then often flares up later due to uninsured long-term care costs.

This is often referred to as “the spending smile,” Benz said.

Given that dynamic, Blanchett “has always been a believer in people giving themselves a little bit of permission to spend more earlier on,” Benz added. But giving yourself permission to spend isn’t always easy.

“The problem is a real one,” Benz said, and it’s rarely addressed, since many retirees haven’t saved enough for retirement.

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Read more: Here’s what to do with your retirement savings in a market sell-off

Benz noted that she often meets people who bring up this issue. They’ve seen themselves as savers throughout their working lives, and that identity has become second nature. Now, however, with their portfolios at high levels, the idea of drawing down those savings feels uncomfortable.

And many genuinely struggle with spending — often for good reason. Part of the challenge, Benz speculated, lies in the word “spending” itself, which many associate with excess.

“There is this association of spending with profligacy,” Benz said, when that’s often not the case at all. For instance, some retirees provide meaningful support to adult children or other loved ones, particularly while they’re still young and may need it most.

How one should allocate assets when entering retirement?

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William Bernstein, co-founder of Efficient Frontier Advisors and author of “The Four Pillars of Investing,” endorsed a “safety-first” strategy in his interview with Benz. That approach focuses on securing reliable, inflation-protected cash flow to cover essential expenses.

The ideal way to achieve this is by building a laddered portfolio of Treasury Inflation-Protected Securities (TIPS), a structure that helps retirees manage inflation risk while ensuring their basic income needs are met.

For Bernstein, addressing portfolio cash flows and securing inflation protection are “jobs one and two” in a sound retirement plan.

J.L. Collins, the author of “The Simple Path to Wealth,” offered another approach. Benz described his advice about keeping retirement portfolios as simple as possible, especially considering the potential cognitive decline in older age.

Collins recommended using a simple index fund-based portfolio with a bit of cash, focusing on core stock and bond market indexes, rather than overly complicated investments.

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“[Collins] is very much on the side of trying to be as minimalist as you possibly can be when thinking about your retirement portfolio,” Benz said, “and there’s a lot to like about that idea.”

Each Tuesday, retirement expert and financial educator Robert Powell gives you the tools to plan for your future on Decoding Retirement. You can find more episodes on our video hub or watch on your preferred streaming service.

Finance

Las Cruces finance director gets national honor for ‘exceptional contributions’

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Las Cruces finance director gets national honor for ‘exceptional contributions’

EL PASO, Texas (KTSM) — The City of Las Cruces’ finance director has received a national honor recognizing “exceptional contributions to public finance and local government service,” the City said.

Finance Director Lesley Doyle was selected by the Government Finance Officers Association (GFOA) to receive the organization’s “Recognition for Outstanding Public Service.”

The award recognizes Doyle’s leadership during a critical financial period for the City.

She stepped into the role of finance director as the City’s FY25 audit identified a projected beginning balance shortfall of more than $10 million in a community of nearly 120,000 residents, the City said.

Doyle led a coordinated effort to communicate the financial situation clearly to City departments, executive leadership, and the City Council, while working with the budget team to close the gap without reducing essential services.

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Josie Trevino, assistant finance director, credited Doyle with building a culture of trust and collaboration between the Finance Department and other City departments from the beginning of her tenure.

Doyle came to municipal government after a career in public education, transitioning from a school district into City finance leadership.

“In her first year, she met the challenge with confidence, emphasizing open communication, transparency, and proactive problem-solving. Her leadership has helped strengthen relationships across the organization while fostering a positive and supportive workplace culture within the Finance Department,” the City of Las Cruces said.

“The balance of technical skill and genuine care for people is what makes Lesley’s leadership unique,” Trevino said.

The GFOA has published Doyle’s recognition on its website, and her story will also be highlighted during the upcoming GFOA newsletter and highlighted at the annual GFOA conference.

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Former top Treasury adviser warns that HMRC plans to track personal finances with AI

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Former top Treasury adviser warns that HMRC plans to track personal finances with AI
HMRC could follow Spain’s lead on tracking personal finances (Reuters)

A former senior Treasury adviser to Gordon Brown has warned that HMRC is on the cusp of using artificial intelligence to track people’s and businesses income and expenditure without them knowing.

Dr Chris Wales, who was a member of Mr Brown’s Council of Economic Advisers for more than six years, has sounded the alarm while launching a chilling book on the conduct of the Spanish tax authority, Agencia Tributaria.

He is set to join former Labour Treasury minister Baroness Dawn Primarolo at an event next week flagging up how the Spanish model of dealing with tax evasion is about to arrive in the UK suggesting that the door is opening for a “surveillance state.”

HMRC could follow Spain's lead on tracking personal finances (Reuters)
HMRC could follow Spain’s lead on tracking personal finances (Reuters)

In a preview of the future, Dr Wales has claimed that confidentiality in personal life – not just finances – “will simply go out of the window” and asks whether there are adequate safeguards in the UK to prevent HMRC from emulating its Spanish counterpart.

He said: “From 1 January, every single invoice will go through the tax agency in Spain. The Inspector can already obtain all your utility bills and will soon find out which clinic and pharmacy you use and what you buy there, which restaurants you eat at, where you purchase wine and groceries, what kind of car you have, how far you drive and where you park, what flights you take and which hotels you use. Information security? A thing of the past.”

He went on: “I am far from being a libertarian, but I see great danger in the direction in which tax authority powers are going, particularly because the process doesn’t seem to involve our active consent. There is little parliamentary debate about it. In Spain it is simply out of control. In the UK, let’s see.”

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Highlighting the CONNECT AI program already used by HMRC in the UK, Dr Wales claimed that the UK is now close to following Spain’s lead.

He said: “HMRC has been using sophisticated information technology for years including an AI system called CONNECT which, as early as 2023, was said to contain more than 55 billion taxpayer-related data items.

“It will be much bigger today with these billions of pieces of information about taxpayers capable of being sorted quickly by AI.”

Dr Wales, who is now senior research adviser at International Centre for Tax and Development, added that HMRC also declines to say what algorithms it uses, under the pretext that if you publish them people will “game the system”, a claim that he suggests does not stand up to scrutiny.

“The system is understood to be used to target evasion. For tax authorities, everyone is a potential tax evader. This means that they believe they have a legitimate reason to collect data about all of us,” he said.

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Dr Wales and Baroness Primarolo will be urging parliamentarians in the UK to make more of a stand and apply greater scrutiny than has happened in Spain.

He noted that the Spanish government is trying to introduce a new law, making it an official secret, how the data is used, what algorithms are employed in the selection of taxpayers for investigation and whether there is any review by an official, in apparent defiance of the EU AI Act, GDPR and its own Constitution. “This is obviously a matter of deep concern. When the reasons why decisions are made are unknowable, legal challenge becomes almost impossible.”

In Spain the system is already being used against British expats and others by the authorities.

An HMRC spokesperson said: “Our data and collection powers are set by Parliament and subject to strict legal safeguards, oversight and data protection laws. They exist so we can collect the right tax to fund vital public services, and target error and fraud in a way which minimises intrusion on the honest majority.

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“Artificial intelligence supports some of our processes but never replaces human decision-making and oversight. We remain committed to the safe use of these technologies, underpinned by strict data protection, security and ethical standards.”

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Boyle Heights warehouse fire: Where neighbors, victims can seek financial assistance

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Boyle Heights warehouse fire: Where neighbors, victims can seek financial assistance

More than two weeks after a fire broke out inside the Lineage warehouse in Boyle Heights, many neighbors have received N95 masks and air purified while mobile health clinics are set up in their area.

But some neighbors said the massive fire that sent toxic fume into the air and created a horrendous stench of rotting food has cost them out of pocket.

Neighbors said they missed days of work while spending extra money on property cleanup. One woman said she spent hundreds of dollars on air purified before they became more widely distributed.

Lineage, the company that operates the burned warehouse, donated $2 million to the California Community Foundation (CCF) so the money can be distributed to the community. The organization said it’s split the money between different organizations.

At least 10 of them are listed as providing financial assistance.

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The Boyle Heights Chamber of Commerce said it’s offering small business grants funded, in part, by the group, Inclusive Action for the City.

“We’re hoping that for brick and mortars: it would be up to $3,000. And then for our vendors, it would be up to $1,000,” Miriam Rodriguez with the Boyle Heights Chamber of Commerce said, adding the application is “very straightforward.” “It’s intentionally made that way so that there’s not a lot of requirements. We’re not asking for legal status. We’re not asking for pages of documentation.”

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