If something promises higher returns, it comes with higher risk — even if that risk isn't easy to see. And if something promises to protect your downside, it's usually charging you for it through fees, limited upside, or long-term lockups.

Today's headline from Ben Henry-Moreland fits that idea perfectly. "Why 'Downside Protection' ETFs Don't Protect Portfolios As Well As A Stock-Bond Mix (In The Long Term)".

After that, I'll answer a listener question about taxes & avoiding underpayment penalties from a surprise inheritance. Should they make an extra quarterly payment to the IRS to avoid penalties, or is there a smarter way to handle it? I'll explain how the safe-harbor rules work, and why a simple IRA-withholding trick can sometimes do the same job even better.

Resource:

Article by Ben Henry-Moreland on Kitces.com: Why "Downside Protection" ETFs Don't Protect Portfolios As Well As A Stock-Bond Mix (In The Long Term)

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A few episodes ago, we covered Derek Tharp's research suggesting that not everyone should delay until 70 — especially those with shorter life expectancies or limited assets.

This week's headline brings the opposite perspective: Michael Finke argues that for higher-income retirees who expect to live longer, claiming early is almost always a mistake — and that fear-based decisions about Social Security's solvency can cost retirees hundreds of thousands in lifetime income.

Plus, a listener asks about giving with warm hands vs cold hands - which is a euphemism for giving during life vs giving after death. How much can they give without fear of running out of money?

Resource:

• Michael Finke article on ThinkAdvisor: Why Advisors Should Never Recommend Social Security Claiming at 62

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Retirement Starts Today: Your Non-financial Guide to an Even Better Retirement

Do lower-cost funds tend to outperform pricier ones over time?

Jeffrey Ptak analyzed fifteen years of performance data covering virtually every U.S. mutual fund and ETF. He divided them into five "cost buckets," from the cheapest 10% all the way up to the most expensive 10%. He then compared each group's average monthly return against its peers within the same category.

The result? A clean, almost perfect staircase of performance.

The cheapest funds outperformed the second-cheapest, which outperformed the middle, which beat the expensive ones — and so on — all the way up the ladder. The longer the time horizon, the wider the gap became.

That's from Jeffrey's Peak Substack piece "It's So Simple: Fees Predict Performance", which we go through in this episode.

We also answer a listener question from Ray about a 5-year SPIA, continuing the listener question from the previous episode.

Resource:
Jeffrey Ptak article from Substack: It's So Simple: Fees Predict Performance

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• *Subscribe to the newsletter: https://retirementstartstodayradio.com/newsletter
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Retirement Starts Today: Your Non-financial Guide to an Even Better Retirement