Motley Fool Money – "Enjoying a Richer Retirement, and an IRA Scam"

Date: October 11, 2025
Host: Robert Brokamp
Guest: David Blanchett, Head of Retirement Research, PGM DC Solutions

Episode Overview

This special Saturday edition of Motley Fool Money dives deep into personal finance topics, focusing on how spending patterns evolve throughout life and especially in retirement. Host Robert Brokamp is joined by financial planning expert David Blanchett to discuss optimizing retirement income, common misconceptions about retirement spending, and why retirees may be able to spend more—and earlier—than they think. The episode also covers a rising IRA scam, key economic figures, and offers practical advice on tracking down lost retirement accounts.

Key Discussion Points

1. Government Shutdown Impacts: Economic and Financial Data Delays

• Consequences of Shutdown: Many government economic data releases are delayed, such as jobs reports, inflation updates, Social Security cost-of-living adjustments, and retirement savings limits.
  • "Many federal employees are furloughed, including nearly half of the workforce at the IRS... But no, that doesn't mean you can ignore the October 15 deadline to get your 2024 tax return in if you filed for an extension." (01:02)
• Historical Context: Since 1976, there have been 21 shutdowns averaging eight days, with little impact on the stock market overall.
  • "The stock market is essentially flat during a shutdown, with a little bit of variability..." (01:37)

2. Rise in IRA (ACATS) Scams

• Scam Mechanics: Criminals open a fraudulent IRA at another brokerage (e.g., Merrill Lynch) in the victim’s name, then use the Automated Customer Account Transfer Service (ACATS) to transfer assets.
  • "Scammers opened up an IRA in his wife's name at Merrill Lynch, then requested the investments be rolled over via… ACATS..." (02:15)
• Prevention Tips:
  • Ask your financial provider about notification protocols for outgoing transfers.
  • Enable and monitor alerts.
  • Use account locking features if available.
  • Consistently deploy two-factor authentication.
  • Shred paper statements and practice good email hygiene.
  • Open all financial mail, even if it looks like junk.
  • "Always use two factor authentication, guard your brokerage account numbers and shred paper statements if you absolutely insist on receiving them that way." (03:27)

3. Inflation Watch: "Number of the Week"

• Stat: 60% of the items in the Consumer Price Index showed month-over-month annualized growth rates above 3%, up from 35% a year ago.
  • "That figure was just 35% a year ago… The last time we saw this… was 2021..." (03:55)

Interview: David Blanchett on Retirement Spending and Income (05:01–20:22)

How Income and Spending Change Over a Lifetime

Income Trajectory:

• Early career: Lower income; increases into late 50s, then tapers off.
• Many Americans "under-save" by matching spending to rising income rather than increasing savings rate.
  • "When you're young, you make less, as you move into your 50s… you make more and then earnings tend to trail off…" (05:27)

Spending Patterns:

• Transition to retirement sees only modest reduction (~5%).
• Common rules (like spending 70% of pre-retirement income) may overstate needed income, especially since that's pre-tax versus post-tax spending.
  • "We don't tend to see large changes in spending when someone moves from work to retired… maybe down about 5% on average." (06:19)

Notable Quote

• "If your income rises dramatically as you approach retirement and your spending adjusts accordingly, that could have a detrimental effect on your retirement readiness." – David Blanchett (05:52)

The Myth of Inflation-Adjusted Spending in Retirement

• Most financial plans assume retirement spending rises with inflation annually. Blanchett’s research finds this is not true:
  • Spending usually increases at 1–2% less than inflation.
  • Why? Some have to cut back due to finances; many choose to spend less as they age (lifestyle and activity naturally decline).
  • "The evidence is very clear that the majority of retirees do not increase their spending every year lockstep with inflation." (09:31)
• Real-life planning: Consider using assumptions of lower spending growth to potentially free more money for early retirement experiences.
  • "Maybe run a projection where you only increase spending by like 2% less than inflation… it can free up a lot more money for you earlier in retirement." (11:08)

The "Go-Go, Slow-Go, No-Go" Model

• Retirees are most active (and spend most) in their early years, then gradually slow down.
  • "Younger retirees can typically be a lot more active than older retirees...not like underspend like crazy when they're in their 60s and 70s, then have this massive pot of money left in their 80s." (10:43)

Implications: Can You Retire Sooner?

• Accounting for the realistic decline in spending needs, retirees may be able to save 25% less than traditional models suggest, or retire earlier.
  • "You need about 25ish percent less… the portfolio now has to maintain a constant nominal amount of income potentially versus one that increases by inflation." (11:32)

Why Don't Advisors Adjust for This?

• Industry prefers conservative estimates; concern for late-in-life healthcare spikes and potential uncertainty justifies more cautious planning.
  • "I think this is where the nuance of a second plan...what if we change this assumption?...that’s where it’s really valuable." (12:36)

Rethinking “Safe Withdrawal Rates”: 4%, 5% or Higher?

• Blanchett supports more flexible withdrawal strategies, suggesting 5% or even 6% may be reasonable for many.
  • "I do think that 4% is probably way too conservative. I think 5% is probably close to the floor, but for most Americans, it's going to be higher..." (14:57)
• Flexibility is key: If markets fall or portfolios shrink, retirees can choose to scale back discretionary spending.

Notable Quote

• "The more adaptive you are, the more you can take out and enjoy early retirement." – David Blanchett (15:13)

Essential Expenses and Guaranteed Income

• Everyone should aim to cover all "essential" expenses (housing, food, utilities) with guaranteed lifetime income, typically via Social Security.
  • "Every American...should have all of their essential expenses covered with lifetime income. And the best place to get that is Social Security." (15:51)
• Having guaranteed income correlates with greater willingness to spend and enjoy retirement.

Notable Quote

• "When you know that no matter how long you're going to live, you're going to be okay, it changes the relationship with your savings." – David Blanchett (16:22)

Behavioral Challenges to Spending in Retirement

• Many retirees, even wealthy ones, underspend due to fear of running out and difficulty shifting from saving to spending mode.
  • "We train people to be ants for 30 or 40 years… it’s not easy for people to just flip a switch." (17:29)
• Actual observed withdrawal rates are about 2%, which is lower than the 4% “rule” suggests.

Retirement Satisfaction and Well-Being

• Data show over 90% of retirees are satisfied, rising to 95–99% at oldest ages.
• Well-being is linked to:
  • Sufficient assets and guaranteed income
  • Health
  • Social connections
• "Retirees are a very, very content bunch... The more wealth, the more health that you have, the happier you're going to be on average." (18:31, 20:18)

Practical Advice Segments

Finding Lost 401(k) Accounts (21:55)

• Over $2 trillion is in forgotten 401(k) accounts.
• Use databases like:
  • National Registry of Unclaimed Retirement Benefits
  • Department of Labor’s Retirement Savings Lost and Found
  • missingmoney.com
• Or, contact old employers directly.
• Consider rolling over old 401(k)s to a current employer plan or IRA for better control and potentially lower fees.
  • "You could even call the HR departments of those old employers to see if you still have an account with that employer's plan." (22:55)

Memorable Quotes & Moments

| Quote | Speaker | Timestamp | |-------------------------------------------------------------------------------------------|-------------------|-----------| | "When you're young, you make less...as you move into your 50s, you make more and then earnings tend to trail off." | David Blanchett | 05:27 | | "If your income rises dramatically as you approach retirement and your spending adjusts accordingly, that could have a detrimental effect on your retirement readiness." | David Blanchett | 05:52 | | "The evidence is very clear that the majority of retirees do not increase their spending every year lockstep with inflation." | David Blanchett | 09:31 | | "The more adaptive you are, the more you can take out and enjoy early retirement." | David Blanchett | 15:13 | | "When you know that no matter how long you're going to live, you're going to be okay, it changes the relationship with your savings." | David Blanchett | 16:22 | | "Retirees are a very, very content bunch... The more wealth, the more health that you have, the happier you're going to be on average." | David Blanchett | 18:31, 20:18 |

Timestamps for Critical Segments

• Impact of Government Shutdown – 00:04 to 01:48
• IRA Account Transfer Scam – 01:48 to 03:43
• Inflation Figure of the Week – 03:55
• Interview: Retirement Income & Spending Analysis – 05:01 to 20:22
  • Income and spending transition: 05:21–07:48
  • Spending in retirement & inflation: 09:00–11:23
  • Withdrawal rate discussion: 13:23–15:23
  • Essential expenses & behavioral finance: 15:23–18:24
  • Retirement satisfaction: 18:24–20:18
• How to Find Forgotten 401(k) Accounts – 21:55

Takeaways

• Most retirement spending models are overly conservative—retirees’ expenses rise less than inflation, and true withdrawal rates average only ~2%.
• Covering essential expenses with guaranteed income brings comfort and freedom to spend more (especially early in retirement).
• Scams involving broker-to-broker transfers (ACATS) are rising: vigilance, security, and questioning your provider’s security options are essential.
• Many lose track of retirement accounts—proactive tracking and consolidation can save and simplify.

For More

Listen to the full episode for actionable tips, research-backed insights, and practical steps for navigating a richer, less stressful retirement.