Podcast Summary

White Coat Investor Podcast #454: The Numbers and Psychology of Retirement Spending with Christine Benz

Release Date: January 15, 2026
Host: Dr. Jim Dahle
Guest: Christine Benz, Director of Personal Finance and Retirement Planning at Morningstar

Overview

This episode dives deep into the data and psychology behind retirement spending, blending the hard numbers of safe withdrawal strategies with the softer, behavioral challenges many retirees face when shifting from accumulation to decumulation. Dr. Dahle and Christine Benz discuss recent Morningstar research, practical withdrawal strategies, the critical risks facing retirees, and how medical professionals can approach generating retirement income. The conversation is rich with actionable advice, memorable anecdotes, and data-driven insights for those planning retirement or helping others do so.

Main Discussion Points & Insights

1. Christine Benz & Her Motivation

• Christine’s background at Morningstar and her extensive involvement with the Bogleheads and financial education.
• Her motivation stems from Jack Bogle’s influence and the personal fulfillment she finds in simplifying and spreading solid financial principles.
• [06:37] Christine shares:

  “I remember sitting in a room listening to [Jack Bogle’s] booming baritone and thinking, whatever side this guy is on, that's what I want to do with my career.” (06:37)

2. What is Morningstar and How Can Investors Use It?

• Morningstar offers both free and premium content, including fund ratings, portfolio analysis tools (like the X-Ray tool), and educational articles.
• The X-Ray tool is one of Christine’s favorites for “peering into your portfolio and giving you an asset allocation… It’s a super helpful tool.” (11:12)

3. Women in Financial Planning & Notable Leaders

• The financial planning space skews male, but Christine highlights several women making important contributions:
  • Laura Carstensen (aging and longevity),
  • Carolyn McClanahan (physician/financial planner),
  • Mary Beth Franklin (Social Security expert),
  • Jackie Cummings Koski (FIRE, “Fire for Dummies”),
  • SC Gutierrez and Valerie Rivera targeting hourly planning and first-gen wealth.
• Christine:

  “That’s one thing I love about your conference, Jim, is that it is more gender diverse than most conferences I attend…” (12:44)

4. The Hardest Problem in Financial Planning: Decumulation & Retirement Spending

• Christine’s book, How to Retire: 20 Lessons for a Happy, Successful, and Wealthy Retirement, draws on expert interviews and covers far more than withdrawal rates.
• She emphasizes how retirement planning is plagued by uncertainties: lifespan, retirement date, market conditions, and inflation.
• [16:04]

  “The whole thing about how much you can safely spend in retirement... is the hardest problem in all of financial planning.” (16:04)

5. What Bogleheads Get Wrong

• Both optimization obsession and tax minimization can get in the way of life enjoyment and practical planning.
• Christine:

  “Bogleheads, some of them, not all of them, do tend to head down the optimizer rabbit hole maybe a little more than they should… Perhaps they're neglecting some more important aspects of their financial lives and their nonfinancial lives.” (20:32)

• Dr. Dahle adds that “People need to spend more money… It gets harder to turn money into happiness every decade of life as you go along.” (23:15)

6. Morningstar’s State of Retirement Income 2025

Research Team & Approach

• Multi-year research project with Amy Arnott, Jason Kephart, and Tao Guo, using forward-looking capital markets expectations rather than just historical data.
• The base case safe withdrawal rate reflects conservative assumptions: a fixed real withdrawal over 30 years with a 90% success rate.

Safe Withdrawal Rates (SWR)

• This year’s base case SWR: 3.9%.
  • Christine:

    “If someone is taking out 3.9% on a million dollar portfolio at the beginning of 2026, they're getting their $39,000 and can inflation adjust that dollar amount thereafter.” (26:18)

• SWR changes yearly due to updated forecasts for stock/bond returns and inflation, not just adding more historical data.
• The most “conservative” model supports 30–50% equities as an optimal starting point due to sequence-of-return risk—not the higher equity allocations commonly recommended.
  • This counters recent advice to “start high and increase equity allocation as you age.”
  • Christine:

    “Given where fixed income yields are today, I can get a lot of what you're looking for in fixed income… you can lock up a lot of your return needs in fixed income assets.” (32:00)

7. Four Major Risks to Retirement Sustainability

1. Poor Market Returns Early in Retirement ("sequence of returns" risk)
2. High Inflation Early in Retirement
3. A Long Retirement Period (e.g., FIRE, forced early retirement)
4. Late-Life Long-Term Care Costs

• Adjusting withdrawals (spending less) in response to these risks—especially poor early returns—is critical.
• Home equity is an under-discussed source to help fund long-term care, but Christine stresses that long-term care risk is most acute for married couples:

  “You have to impoverish the well spouse in order to qualify the spouse who needs care for Medicaid provided long-term care.” (40:31)

8. Flexible Spending Strategies (Guardrails & More)

• Flexible systems can allow for higher starting withdrawal rates (up to 5.7%) for retirees willing to adjust spending based on portfolio performance.
• Guardrails (Guyton-Klinger), fixed percentage withdrawals, and “endowment-style” spending (spending a % of a trailing 10-year average) are explored.
• The tradeoff: higher initial withdrawals require a real willingness to cut spending if/when markets tumble.
  • Christine:

    “Wealthier people certainly are [able], because a bigger share of their spending is probably coming from discretionary items...” (44:33)

• Enhancing non-portfolio income sources (Social Security, pensions, rentals, part-time work) makes flexible portfolio spending easier.

9. Social Security Claiming Decisions—Mathematics vs. Psychology

• Financial math usually favors delaying Social Security to 70 (particularly for the higher earner).
• David Bach argues for an earlier start (age 62) based on behavioral finance: people spend Social Security money more willingly than assets from portfolios.
• Christine acknowledges the behavioral reality:

  “For whatever reason, Social Security acts like your paycheck… people have such a hard time diving into their portfolio and spending.” (47:41)

• But for most, especially with “tighter” plans, she recommends delaying filing to maximize inflation-protected lifelong income.

10. The Place of TIPS Ladders and Annuities

• TIPS (Treasury Inflation-Protected Securities) Ladders
  • Useful for “locking in” spending and hedging inflation risk.
  • Christine warns the TIPS ladder is rigid, complex, and not well-suited for entire portfolios:

    “I do think that as we age, it’s just a wise strategy… to try to reduce the number of moving parts.” (54:25)

  • Target date and all-in-one funds may be more practical for most.
• SPIAs (Single Premium Immediate Annuities)
  • Useful to “cover the gap” between fixed expenses and Social Security, but imperfect (lack of true inflation protection).
  • Rates are better now, and SPIAs are less susceptible to adverse sales practices.
  • Christine:

    “It’s not perfect… you can’t buy one that’s linked to CPI… But for bridging that gap, a small SPIA purchase can make sense, especially if you’ve maximized Social Security.” (56:08)

• Best "annuity":
  • “The best deal on an annuity is delaying your Social Security to 70, 100%.” (61:01)

11. Retirement Spending Trajectory & Behavioral Insights

• Real retiree spending typically declines after the early "go-go" years (mid-70s and later), even for affluent households.
• Christine:

  “Don’t feel badly if you need to spend a little bit more in your first couple of years of retirement, and especially if the market’s good—give yourself permission to spend when your health is good... You may not always feel that way.” (61:15)

• This “slow-go” trend holds for affluent households, with some nuance (e.g., those in better health might defer the slow-go years).

Notable Quotes & Memorable Moments

• “Too focused on optimization… Perhaps they're neglecting some more important aspects of their financial lives and nonfinancial lives.” — Christine Benz [20:32]
• “People need to spend more money… It gets harder to turn money into happiness every decade of life as you go along.” — Dr. Jim Dahle [23:15]
• “Given where fixed income yields are today, I can get a lot of what you're looking for in fixed income assets… you can lock up a lot of your return needs in fixed income.” — Christine Benz [32:00]
• “Flexible strategies prompt you to recalibrate how much you can spend each year based on… your portfolio. Some methods let you take more as you age…” — Christine Benz [41:55]
• "The best deal on an annuity is delaying your Social Security to seventy, a hundred percent." — Dr. Jim Dahle [61:01]
• “Don’t feel badly if you need to spend a little bit more in your first couple of years of retirement… you may not always feel that way.” — Christine Benz [61:15]

Key Timestamps for Important Segments

• Christine’s role & Morningstar intro: [02:38]–[08:36]
• Women in financial education: [12:04]–[15:26]
• Retirement planning as the hardest problem: [16:04]
• Bogleheads’ common mistakes: [20:32]
• The State of Retirement Income research: [24:47]
• Safe withdrawal rate explanation: [26:18]
• Why the optimal equity allocation is lower: [32:00]
• Retirement risks & spending adjustments: [34:04]–[41:20]
• Flexible withdrawal strategies: [41:55]
• Social Security timing debate: [46:13]–[50:18]
• TIPS ladders/funds versus complexity: [50:44]–[55:48]
• Annuitization & when SPIAs fit: [56:08]–[59:40]
• Retirement spending trajectory: [61:15]

Takeaways for White Coat Investors & High Earners

• Safe withdrawal rates are nuanced, and your path will likely blend numbers, psychology, and personal circumstance.
• Prioritize spending money to maximize happiness—not just optimizing portfolio metrics or minimizing taxes.
• Non-portfolio income (Social Security, annuities, rentals) is a stabilizing force for retirees—maximize this where possible.
• Flexible spending models can support higher withdrawals but require real behavioral flexibility.
• Age and portfolio simplicity go hand-in-hand; reduce moving parts as you enter the decumulation phase.
• It’s normal for spending to decline (“slow-go years”), so give yourself permission to enjoy your early retirement.

For further reading, refer to "The State of Retirement Income 2025" on Morningstar and Christine Benz’s book, “How to Retire: 20 Lessons for a Happy, Successful, and Wealthy Retirement.”