Matt takes a walk through the interest rate environment of the past several years, from the near-zero rates of the COVID era to today's rates hovering nearer the historical average. Matt explains how the policy decisions of 2020-2021 (and before) suppressed interest rates, sending them steadily downward. During this period interest rates were predictable -- they would go down steadily -- and retirees looked to equities to produce income for their portfolio.

Today the market looks quite different. With the 10-year treasury around 4% (as of January 2026), fixed income is a viable asset for generating income again. However, interest rate volatility has re-entered the picture. When rates were near zero, the risk of interest rates moving sharply downward or upward was neglible, so interest rate risk could essentially be ignored. Now it's a material risk, so retirees must be careful in building their bond portfolio.

Matt explains how many retirees are still rooted in the thinking that made sense in 2020 and 2021, and that the market today presents new challenges. He outlines how bonds can be chosen and laddered to protect a portfolio against interest rate volatility, so that retirees can produce steady income for their portfolio while being hedged against rates moving up or down in the future.

Follow Matt Murphy

Web: https://www.benetaswealth.com

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Advisory services offered through Commonwealth Financial Network®, a Registered Investment Adviser.

This material is intended for informational/educational purposes only and should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Please contact your financial professional for more information specific to your situation.

Investments are subject to risk, including the loss of principal. Some investments are not suitable for all investors, and there is no guarantee that any investing goal will be met. Past performance is no guarantee of future results.

All indices are unmanaged and investors cannot invest directly into an index.

Investments in target-date funds are subject to the risks of their underlying holdings. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the workforce. The fund will gradually shift its emphasis from more aggressive investments to more conservative investments based on its respective target date. The performance of an investment in a target-date fund is not guaranteed at any time, including on or after the target date.
Diversification does not assure a profit or protect against loss in declining markets, and diversification cannot guarantee that any objective or goal will be achieved.

Exchange-traded funds (ETFs) are subject to market volatility, including
the risks of their underlying investments. They are not individually redeemable from the fund and are bought and sold at the current market price, which may be above or below their net asset value.

Many smart, sophisticated investors get caught by this trap -- the retirement income snowball tax trap. Like most retirement income problems, the income snowball happens slowly, building over many years. At first things seem fine in retirement. Income is sufficient, taxes are low, but if you have deferred a lot of income in previous decisions -- social security, benefit plans, portoflio RMD's -- then a snowball of income can grow and later, when flexibility is low, can come to dominate the entire retirement plan.

Delaying social security to age 70 (the maximum age to start claiming SS) makes sense for many reasons. It provides some longevity insurance, similar to an annuity, the benefits are inflation adjusted, survivor benefits increase, and raises your guaranteed income floor for the remainder of your life. However, failing to think about the timing of this deferred income alongside your distributions in large, pre-tax retirement accounts could put you in a snowball situation with high tax bills.

Matt describes a common scenario he sees in his practice: a married couple filing jointly defers social security benefits to age 70, required minimum distributions (RMD) begin in their mid-70's, and their IRA values are higher than they expected, meaning their RMD's are higher than expected... which ultimately means a large tax bill. Where the snowball really hits hard is when one spouse passes away, and the surviving spouse inherits the deceased IRA's and possibly survivorship benefits as well. This can push the surviving spouse into a higher marginal tax bracket, when they now a single filer. Consequently, an annual income of $100k, for example, which might be fine for a married couple filing jointly, can become burdensome for the single surviving spouse. Unfortunately, by the time this happens, most of the proactive moves that could have been done to prevent the snowball are off the table.

Matt presents some tools to prevent this scenario, such as Roth 401k conversions and careful planning around IRMAA and Medicare.

Follow Matt Murphy

Web: https://www.benetaswealth.com

Newsletter: http://eepurl.com/jb7SNc

LinkedIn: https://www.linkedin.com/in/mattmurphycfp

Advisory services offered through Commonwealth Financial Network®, a Registered Investment Adviser.

This material is intended for informational/educational purposes only and should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Please contact your financial professional for more information specific to your situation.

Investments are subject to risk, including the loss of principal. Some investments are not suitable for all investors, and there is no guarantee that any investing goal will be met. Past performance is no guarantee of future results.

All indices are unmanaged and investors cannot invest directly into an index.

Investments in target-date funds are subject to the risks of their underlying holdings. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the workforce. The fund will gradually shift its emphasis from more aggressive investments to more conservative investments based on its respective target date. The performance of an investment in a target-date fund is not guaranteed at any time, including on or after the target date.
Diversification does not assure a profit or protect against loss in declining markets, and diversification cannot guarantee that any objective or goal will be achieved.

Exchange-traded funds (ETFs) are subject to market volatility, including
the risks of their underlying investments. They are not individually redeemable from the fund and are bought and sold at the current market price, which may be above or below their net asset value.

In the third and final installment of the investing miniseries, Matt Murphy and Matt Reynolds discuss the common investment products most investors will use during their lifetime. Matt breaks down the difference between active and passive fund management, and why investors over the past few decades have flocked to passive index funds, which hold a basket of stocks that mirror market indices like the S&P500 and charge very low fees.

Matt also explains a common trap that robs investors of returns: not staying invested in the market. The old adage is buy low, sell high, and when the markets are volatile and economic outlook is poor, many investors get nervous and sell their stocks... only to watch the market rebound later. Before they know it, the market bounces back to higher levels than before, and to get back in the game they must now buy in at a higher price. Of course, there's no guarantee that the market will bounce back, or when it will bounce back, but in general, attempting to time the market results in substantially lower returns in the long run compared to simply staying invested and following your strategy, with periodic rebalancing to ensure your portfolio matches your risk tolerance.

As always, patience is the key to successful investing! Armed with some basic knowledge, you can make sound investments for your retirement without complicated strategies or esoteric investment products.

Follow Matt Murphy

Web: https://www.benetaswealth.com

Newsletter: http://eepurl.com/jb7SNc

LinkedIn: https://www.linkedin.com/in/mattmurphycfp

Advisory services offered through Commonwealth Financial Network®, a Registered Investment Adviser.

This material is intended for informational/educational purposes only and should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Please contact your financial professional for more information specific to your situation.

Investments are subject to risk, including the loss of principal. Some investments are not suitable for all investors, and there is no guarantee that any investing goal will be met. Past performance is no guarantee of future results.

All indices are unmanaged and investors cannot invest directly into an index.

Investments in target-date funds are subject to the risks of their underlying holdings. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the workforce. The fund will gradually shift its emphasis from more aggressive investments to more conservative investments based on its respective target date. The performance of an investment in a target-date fund is not guaranteed at any time, including on or after the target date.
Diversification does not assure a profit or protect against loss in declining markets, and diversification cannot guarantee that any objective or goal will be achieved.

Exchange-traded funds (ETFs) are subject to market volatility, including
the risks of their underlying investments. They are not individually redeemable from the fund and are bought and sold at the current market price, which may be above or below their net asset value.