My Biggest Surprise in Retirement
This article appears as part of Casey Weade's Weekend Reading for Retirees series. Every Friday, Casey highlights four hand-picked articles on trending retirement topics and delivers them straight to your email inbox. Get on the list here.
Weekend Reading
Imagine this: you spent decades building your retirement nest egg, smartly saving into your 401(k), and taking advantage of tax deferral. Now you’re retired—only to discover an unexpected hurdle: those pre-tax balances don’t shrink as easily as you thought.
READ THE ARTICLEHere, past podcast guest Fritz Gilbert shares a revelation that caught him off guard: The very force that helped build his wealth (compounding) is now working against his drawdown strategy.
When it comes to your retirement savings, here’s what you should know:
📌 Roth conversions are powerful—but they may not be enough to “outrun” market growth unless conversions exceed your portfolio’s annual returns
📌 Covering taxes on conversions with after-tax funds can create a surprising cash drain in retirement
📌 Asset location matters—placing growth assets in your Roth and income-generating ones in pre-tax accounts may help but doesn’t guarantee a shrinking balance
Key Takeaways: As you plan your retirement drawdown (decumulation) strategy, don’t underestimate the silent power of compounding or the true cost of managing taxes. Reflect, reassess, and possibly rethink how you’ll manage those “later” years—before they arrive.