Life Expectancy Must Be Factored in Retirement: Bitterly

Summary

Kristen Bitterly discusses how longer life expectancy is changing retirement planning. She argues investors need to avoid excessive cash, put money to work, use tax-efficient vehicles such as money market funds, and consider covered calls for tax-efficient income. She also touches on hedging concentrated positions and using low-rate mortgage debt intelligently.

• Longer life expectancy means retirement money must work longer.
• Excess cash hoarding penalizes long-term growth and should be reduced.
• U.S. fixed income investors should favor money market funds for after-tax returns.
• Covered calls can enhance income and avoid taxable gains in sideways long-equity positions.
• Hedging strategies may reduce downside without triggering taxes for concentrated gains.
• Low fixed-rate mortgages are viewed as intelligent leverage, while high-interest credit card debt is risky.