Andrew Shilling at MarketWatch wrote about the unretirement trap: about 7% of retirees have gone back to work out of financial necessity, Social Security's purchasing power has fallen 13.7% over the past decade, and inflation is running 3.5%. He asked how retirees can protect themselves.
My starting point was that unretirement usually is not about running out of money. It is about running out of confidence in the plan. So the fix is structural, not a product.
I build a two- to three-year cash and short-duration bond bucket covering near-term spending, so a downturn never forces a stock sale at a low point just to eat. That is the best inflation hedge I know of, because it lets the growth assets stay invested long enough to outrun rising prices.
Withdrawals need guardrails, not a fixed percentage. A fixed 4% rule breaks down fast when markets drop in year one, so I build in rules that adjust the withdrawal up or down with the portfolio. Taxes matter as much as returns: every unnecessary dollar pushed into a higher bracket, or into Medicare surcharge territory, is a dollar the portfolio does not get to keep.
And a 25- to 30-year retirement needs at least one guaranteed income floor underneath the portfolio. Full stop.
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