Talking Real Rules

Talking Real Money - Investing Talk

Don McDonald

Business, Education, Investing, How To

4.2 • 680 Ratings

🗓️ 11 April 2025

⏱️ 34 minutes

🔗️ Recording | iTunes | RSS

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Summary

Don and Tom put popular retirement rules of thumb under the microscope—testing everything from the 4% withdrawal rule to the idea of downsizing your home in retirement. With equal parts logic and skepticism, they explore whether these oft-repeated guidelines still hold up in today's financial landscape. Along the way, they touch on portfolio construction, social security timing (with Don’s real-life dilemma), and why rules are made to be... at least bent. Plus, a few listener questions round out the episode with practical portfolio advice and fund critiques. 0:04 Intro: Humans love rules—including rules of thumb 1:30 Should we ditch retirement rules altogether? Or are they helpful shortcuts? 3:23 Rule #1: The 4% withdrawal rule—what it gets right (and what it doesn’t) 5:08 Rule #2: The 80% income replacement rule—Tom hates it, and here’s why 7:49 Rule #3: Defer taxes with traditional IRAs—good idea or future tax trap? 10:02 Roth vs. traditional contributions—what young workers should do 10:39 Rule #4: The Rule of 110 for stock allocation—Don calls it dumb 12:32 Risk tolerance and personal flexibility matter more than age-based math 14:13 Rule #5: Wait till 70 for Social Security—Don admits he might not 16:38 Don's real-life dilemma: Take Social Security now or wait? 19:23 Rule #6: Downsizing your house in retirement—easier said than done 22:08 Final thoughts: Plans > rules of thumb, especially after age 50 23:07 Q&A: Why don’t you like Fidelity’s zero-fee funds? (Short answer: they’re not fully diversified) 26:50 Are they bad? No. Would we recommend them? Also no. 27:25 Q&A: Retirees with $4M+—how to rebalance IRAs, Roths, and taxable efficiently Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Rated T for Teen.
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0:21.6	Hit the new Tony Hawk's Pro Skater 3 and 4 and show the world that the shred's not dead.
0:25.6	Pre-order Tony Hawk's Pro Skater 3 and 4 and play the Foundry demo.
0:33.6	Reality Radio for a really great future.
0:37.9	We're talking real money.
0:40.6	Talking real money time.
0:42.7	Hello, everyone.
0:43.3	I'm Don McDonald, along with Tom Cock.
0:46.2	And today, we're going to talk about humans and their obsession with rules. We like rules. We like rules of behavior. We like rules of
1:00.4	thumb. We like, well, you know, maybe it's not just humans. It's all animals. I think about my dogs and I go,
1:06.8	they like rules, they like boundaries. They like habits. We do.
1:11.3	We like our boundaries.
1:12.4	And when it comes to retirement, we have our boundaries and our rules of thumb about all manner of things.
1:19.8	And recently, I ran into an article from AARP, The Magazine, entitled, Is It Time to Retire These Retirement Rules?
1:32.1	And I thought it would make a great topic for the show, Tom.
1:36.4	I hope you correctly ruled on this podcast then.
1:40.9	Well, we're going to find out if people actually, you know, more than 12 listen to it on YouTube.
	...

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