Shifting from accumulation to decumulation is difficult for plenty of people. It really is a psychological shift, of course some folks will have no trouble but for others it will be difficult. I assume I will tend toward the latter camp.
The article makes a quick reference to spending in buckets. My thought process has drifted in that direction for how my own older age finances might play out. The way the conversation on this has evolved here, my take on buckets is probably a little out of consensus, I think three buckets can suffice and maybe only two.
I think a sequence of return protection bucket that is cash with about two years of expenses is pretty important. Two years of expected expenses is about bear market resilience and not having to sell stocks after a large decline. Before the last few years, bear markets tended to last 18-30 months but it's been a while since one lasted that long.
We've spent a lot of time on an intermediate term bridging or depletion bucket. The context for this idea is as a bridge to the next financial milestone like starting Social Security or taking IRA withdrawals, whether they are required or not yet required. In that light, maybe we're talking about an eight-ten year window. We've looked at building very yieldy portfolios designed to be spent down at a rate that would not be sustainable for a typically long retirement but with a reasonable shot of getting to the end of the eight-ten year bridge objective with a little left over. Starting with $400,000 for example, taking out $40,000-$45.000/yr for ten years and having $50,000-$60,000 leftover after ten years would be a big success with this.
Going into this idea thinking, "I know this piece of money will only last ten years" is psychologically far more palatable. There's no open end objective that goes with not knowing when retirement ends. Maybe this starts at 65, lasts for ten years to starting RMDs and if things go well, maybe there's another year or two's worth money still in the account. The RMDs would really be the start of decumulation, that first ten years might be decumulation with training wheels to get used to the idea.
Quick pivot to another Bloomberg article about Dividend Nomads. These folks are branch of FIRE living on distributions from various types of funds. One of the people profiled is living off of distributions from $130,000 that was invested across several YieldMax funds including CONY which references Coinbase and went down a lot. Another profile focused on funds like JEPI which are certainly high yielding without being NAV incinerators like many of the YieldMax funds. A fund like JEPI yielding 8-10% would be a reasonable fit in the bridging strategy we talk about above. The third people profiled sort of didn't really belong in the article, they accumulated a lot of money and own a few 3% yielders which is a sound strategy but not terribly interesting.
As I read the first two profiles, these people don't have a lot of money but they are making it work. This is a point I've been making back to the earliest days of the original blog site, I saw this often here in Walker. Neighbors without a lot of money were making their retirement work because they had to.
Ok, HSA accounts. The WSJ had an article that was a refresher on how they work. Toward the end was this passage;
Expansions benefiting ACA users
In 2026, new provisions took effect that benefit individuals with ACA coverage. They enable HSAs to be paired with Bronze and Catastrophic plans, which have the highest deductibles.
This change is good news for several groups. One is self-employed workers. Another is early retirees who use ACA coverage and aren’t yet eligible for Medicare. Still another is the fairly small group who opt only for the ACA’s catastrophic coverage.
HSA eligible plans that make financial sense have been tough to find through the market place for several years. Gemini, does this this mean it should be more accessible?
Yes, this rule change makes HSAs significantly more accessible if you are self-employed. Under the One Big Beautiful Bill Act (OBBBA) which took effect on January 1, 2026, federal guidelines fundamentally changed how marketplace insurance plans interact with Health Savings Accounts.
Hopefully Gemini is correct, we'll know next month. I think we've had an HSA eligible plan just one time in the last six or seven years. It would be nice to get four more years of contributions in before I hit Medicare in 2031.....actually we could get ten more years of HSA contributions. Assuming it ever makes sense again through the market place, we could have a family plan for four more years putting $10,000 into the HSA then for the six years my wife is not yet on Medicare after I start, she could have an individual plan, putting in $5400/yr for six years.
The last couple of years we've had really crappy insurance and I am wondering if that might not be such a great idea now that I'm 60. We had help from an insurance broker for the last couple of years so maybe he can help us find and HSA, I'll report back next month.
The information, analysis and opinions expressed herein reflect our judgment and opinions as of the date of writing and are subject to change at any time without notice. They are not intended to constitute legal, tax, securities or investment advice or a recommended course of action in any given situation.
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