You just retired (or are about to). Now what?

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You just retired (or are about to). Now what?

2026-07-14 18:19 Last Updated At：18:30

If there’s one group likely to be experiencing the most consternation over inflation and economic uncertainty, it’s those who have just retired or are about to. To make it through this period with their sanity intact, they should focus on what they can control.

People who have just retired or are about to are particularly vulnerable to sequence-of-returns risk, which means that a bad market shows up early in your retirement. Not only does that early retirement sell-off feel bad, it actually is bad because it imperils your portfolio’s ability to last throughout your retirement years. In  Morningstar’s 2025 retirement spending research, we found that the people most likely to run out of money in retirement were  the ones whose portfolios lost value in the first five years of their retirements.

Retirees who are pulling cash flows from their portfolios can address that risk by adjusting their spending down to ensure that more of their portfolios are in place to recover when the market eventually does. And those adjustments don’t need to be radical to make an impact. In  our retirement income research, we found that even small tweaks like forgoing an inflation adjustment following a bear market help ensure that spending lasts over a whole 30-year period and can lead to more lifetime income than a strategy that ignores market movements.

If you haven’t yet retired, assess your planned in-retirement spending and identify where you would be willing to make cutbacks. Turbocharge savings if you can afford to do so. Catch-up contributions are available to all retirement savers over age 50. And if you’re between 60 and 63, you can make a “super-catch-up” contribution to your company retirement plan, for a total of $35,750 in 2026. High-income heavy savers may also be able to take advantage of after-tax 401(k) contributions, which enable them to stash even greater amounts in their company retirement plans.

In a turbulent market environment in which equities have declined, it’s best to pull any portfolio cash flows from safer assets and leave your stock positions undisturbed. That’s the general logic behind  the Bucket approach to portfolio construction. In good years for the stock market, like 2023-25, you’d be harvesting appreciated equity assets to supply your income needs. In bad ones, like 2022, you’re not touching stocks but instead sourcing cash flows from high-quality bonds, cash, or a combination of the two.

If your portfolio is riskier than it should be, it’s not too late to shift into a more situation-appropriate asset allocation.

Social Security is a secure, inflation-protected source of income, much like a paycheck. But the lifetime benefits of delaying Social Security are hard to ignore: a higher income stream that also happens to be fully inflation-protected and will last as long as you do. Delayed filing can be particularly impactful if you’re the higher earner in your family and you have a younger spouse who will receive that higher benefit for their lifetime.

In  our retirement income research, we found that delaying filing up until age 70 did enlarge lifetime income, but the benefits are greatest if you have some other source of funds to draw from until your benefits start. And the benefits are also obviously more valuable for people with above-average life expectancies, in that they stand to receive those higher streams of inflation-protected income for a longer period of time.

Inflation is a key risk for retiree portfolios because the income from your safe investments is going to buy you less and less as you age. Moreover, retirees tend to spend more on healthcare, where prices have historically increased faster than the general inflation rate.

Many retirees focus on nominal bonds and underrate the value of inflation-protected bonds as a component of their retirement plans. You can address that by adding an inflation-protected bond fund to your portfolio; most of the better target-date series allocate roughly one-fourth of their bond portfolios to inflation-protected bonds. Alternatively, you could build a laddered portfolio of Treasury Inflation-Protected Securities that will mature and supply you with living expenses throughout your retirement.

The early retirement years are typically an excellent time to consider strategies like converting traditional IRA balances to Roth or accelerating withdrawals on traditional IRAs and 401(k)s. Without income from work and because you won’t be subject to required minimum distributions until you’re 73, your income, and in turn the taxes you’ll owe on those conversions and withdrawals, will be lower.

This article was provided to The Associated Press by Morningstar. For more retirement content, go to https://www.morningstar.com/retirement.

Christine Benz is director of personal finance and retirement planning for Morningstar and co-host of The Long View podcast. Subscribe to her free newsletter, Improving Your Finances.

New York to impose the country's first statewide moratorium on data centers

NEW YORK (AP) — New York will block the construction of any new large data centers for up to a year so the state can create rules to protect the environment and energy grid from the power-hungry facilities that fuel artificial intelligence technology.

Gov. Kathy Hochul is set to sign an executive order Tuesday morning imposing the country's first statewide moratorium on hyperscale data centers, which house thousands of computer servers and require massive amounts of energy and a steady supply of water to keep cool.

"As data center development threatens to hike up utility bills, deplete our natural resources, and create uncertainty for New Yorkers, it’s my responsibility to take action and lead,” Hochul, a Democrat, said in a statement.

The order will pause state permitting for new large data centers and direct state regulators to create standards that address environmental impacts, energy demand, water usage and other factors, the governor's office said.

Tech companies and other backers have argued moves to block the construction of data centers hurt job growth for local communities and cede ground to China in a race to lead in the rapidly growing AI industry.

Earlier this year, Maine seemed poised to establish a similar moratorium. But the measure was vetoed by the state’s Democratic Gov. Janet Mills because it would have blocked a proposed data center in a town that has struggled following the closure of a local mill. Moratoriums have been proposed in at least a dozen states but have not gotten far, though some counties and municipalities have imposed their own temporary bans.

The decision in New York also carries political significance for Hochul's reelection campaign and the state's tight congressional races this fall, as Democrats move to address affordability concerns over high utility bills and other pocketbook issues. The governor this year softened New York's ambitious goals to reduce greenhouse gases, citing rising energy costs for consumers.

Hochul’s Republican opponent in the governor’s race, Nassau County Executive Bruce Blakeman, opposes a statewide moratorium and says local governments should be allowed to strike deals with tech companies for data center projects that promise enough economic benefits.

The state Legislature this year approved its own moratorium bill, but Hochul's office described the legislation as complex and said it needed additional work. Instead, the governor is opting for an executive order that would take effect immediately once signed.

New York, at this stage, has not been a destination for the biggest hyperscale data centers.