1931: The New Rules of Retirement Planning. What Actually Matters Today

What It Covers

Christine Benz, Morningstar's director of personal finance, explains retirement planning strategies for 2026, covering safe withdrawal rates at 3.9%, portfolio derisking for those over 50, long term care costs, and specific planning considerations for women.

Key Questions Answered

• •Portfolio Derisking Strategy: Investors over 50 should add cash reserves and high-quality short-term bond funds to portfolios after the extended stock market run, creating a buffer to avoid selling stocks after declines when unexpected early retirement occurs.
• •Withdrawal Rate Flexibility: The 3.9% safe withdrawal rate serves as a baseline, but retirees should adjust annually based on portfolio performance—taking less after down years to preserve assets and more after strong years or as time horizon shrinks with age.
• •Long Term Care Funding: Self-funding long term care requires setting aside approximately $500,000 for married couples, separate from spendable assets. Medicare does not cover activities of daily living assistance, which can cost substantial amounts when needed simultaneously for both spouses.
• •Women's Retirement Planning: Women should prioritize long term care insurance since they typically outlive male partners by several years and often provide care without receiving it. Maximize savings during peak earning years in twenties and thirties to offset career gaps for caregiving.