Latticework Library

Here Is How To Tell If You Are On Track For Retirement

Fri, 02 Oct 2026 16:32:00 GMT

Whether you are in your 20s just starting out or ready to call it quits for good, everyone wants to know how much they need to retire, if they are on track, and how much they can expect to live on while in retirement. No matter your life stage, this infographic from J.P. Morgan is one of my favorite visual examples for understanding where you stand.

The graph is simple. If you want to maintain the lifestyle of a household with $200,000 of income, the chart says that you will need to rely on investments or sources other than Social Security that generate 39% of that amount, or roughly $78,000.

This chart does a wonderful job explaining that the income you need in retirement and your pre-retirement salary are very different. For example, in retirement you expect to receive Social Security benefits rather than pay a significant portion of your income in payroll taxes, you typically don't save for retirement while you are in retirement, you hopefully have both taxable and tax-free sources, and you generally have a better tax situation. Put simply, you don't necessarily need the same gross income in retirement to have the same after-tax spending cash flow. For most of us, what we can spend is what we really want to know.

The light blue portion of the chart shows that we can expect Social Security to replace a portion of income, in our example 21%, but the bigger the retirement income need, the less Social Security is going to carry us.

So how much do you need saved to replace the $78,000 in our example? It depends on which income distribution strategy you want to choose, but my personal preference is to consider the 4% rule. The 4% rule states that you can generally take a 4% draw on an investment portfolio with a moderate allocation owning both stocks and bonds. The strategy is that you can increase the initial draw with inflation and that you can have dependable income throughout retirement.

The simple math is to take $78,000 times 25, which is $1,950,000. Four percent of $1,950,000 is $78,000 a year. Want $100,000 of income in today's dollars, not including Social Security? Then the 4% rule says you need $2,500,000 for retirement in today's dollars.

Of course, this chart isn't all-encompassing, and depending on your investments, investment fees, tax bracket, longevity, whether you are single or married, and many other factors, you might actually want more or less, but I find it to be a very useful starting place. If you are a young person trying to figure this out, simply find a future value calculator online, put in your assumed return and savings rate, adjust for inflation, and the exercise should help you see where you stand.

Advisory services offered by Latticework Investment Management, LLC. The information above is for educational and informational purposes only and should not be considered personalized financial, investment, tax, or legal advice.

Source: J.P. Morgan Asset Management, Guide to Retirement 2026, page 10. The chart is based on de-identified, aggregated JPMorgan Chase customer household data tracked from 2016 through 2023, adjusted for inflation. Income replacement rates reflect what actual households spent before and after retirement, and Social Security amounts reflect benefits those households actually received. The data is not broken out by single or married households or by one- or two-earner households, and percentages may not sum due to rounding. Examples are hypothetical and for educational purposes only.

Key Health Care Information for Medicare and the Marketplace

Tue, 29 Sep 2026 14:48:45 GMT

October means open enrollment time for both Medicare and under-65 health insurance. The choices you make this fall lock in your costs for all of 2027, and several rules and numbers have changed. Here is what you need to know:

Medicare

Annual Enrollment runs October 15 through December 7. Anyone on Medicare can shop for their Medicare Part D drug plan or Medicare Advantage plan during this window. Changes take effect January 1.

Review your Part D plan every year, even if you are happy with it. Plans change their premiums, covered drug lists, and preferred pharmacies every year. The plan that was cheapest for your prescriptions last year may not be this year. Enter your current prescriptions into the Plan Finder at Medicare.gov, or let us run the comparison with you.

Part D cost-sharing limits are increasing in 2027. The maximum deductible rises to $700 (from $615 in 2026), and the annual out-of-pocket cap rises to $2,400 (from $2,100). Once you reach the cap, covered drugs cost $0 for the rest of the year.

Already in a Medicare Advantage plan? You get one more chance to change. Between January 1 and March 31, people enrolled in a Medicare Advantage plan can make one change: switch to a different Advantage plan, or return to Original Medicare and add a Part D plan. This window cannot be used to move from Original Medicare into Advantage or to switch stand-alone Part D plans. Keep in mind that returning to Original Medicare does not guarantee you can buy a Medicare supplement, which may require medical underwriting.

Medicare supplements, often called Medigap plans, can be shopped at any time, but usually require medical underwriting. Outside of your initial enrollment window, the insurance company can decline you or charge more based on your health, and the Annual Enrollment period does not change that. If you are healthy and your supplement premium keeps climbing, it may be worth pricing the same plan with other companies while you can still qualify.

Missouri residents have an extra option. Missouri’s anniversary rule lets you switch to the same Medigap plan (for example, Plan G to Plan G) with any company, with no health questions, if you act within 30 days of your policy’s anniversary date. Kansas does not currently have a similar rule.

IRMAA: watch your income from two years ago. Higher-income Medicare beneficiaries pay a surcharge on Part B and Part D premiums called IRMAA. It is based on your tax return from two years earlier, so your 2027 premiums are based on your 2025 income, and the income you create this year will set your 2028 premiums. In 2026, surcharges began at modified adjusted gross income above $109,000 for single filers and $218,000 for joint filers. The 2027 thresholds and Part B premium will be announced later this fall.

IRMAA works like a cliff: going $1 over a threshold triggers the full surcharge for that bracket. Roth conversions, large IRA withdrawals, capital gains, and the sale of a business or property are the usual culprits.

If your income has dropped because of certain qualifying life-changing events, such as retirement, reduced work, the death of a spouse, or divorce, you may be able to ask Social Security to use more recent income information by filing Form SSA-44.

Under 65: The Health Insurance Marketplace

Open enrollment begins November 1, 2026 on HealthCare.gov, which both Kansas and Missouri use. As of September 2026, HealthCare.gov lists January 15, 2027 as the final enrollment deadline.

December 15 is the date that matters most. Choose your plan by December 15 for coverage that starts January 1. Plans chosen after that start February 1, which can leave a gap in coverage.

Do not let your plan simply auto-renew. Premiums are rising again for 2027, several insurers are leaving markets or shrinking, and your plan’s doctors and hospitals may change. If your plan is discontinued, you could be moved into a replacement you did not choose. Log in, update your income estimate, and compare.

Income limits for tax credits are back. The enhanced subsidies in place from 2021 through 2025 expired at the end of 2025 and have not been renewed. For 2027 coverage, premium tax credits are available only to households with income between 100% and 400% of the federal poverty level. Above 400% of the federal poverty level, the premium tax credit is generally unavailable, so even a small amount of income above the limit can result in the loss of a substantial premium tax credit.

If your income is under the limit, you are expected to pay between 2.15% and 10.22% of your income for the benchmark silver plan, and the tax credit covers the rest.

Income here means modified adjusted gross income: your adjusted gross income plus tax-exempt interest and any Social Security that is not taxed.

Kansas did not expand Medicaid, so Kansans with income below 100% of the poverty level ($15,960 for a single person) do not qualify for tax credits. Missouri expanded Medicaid to 138% of the poverty level.

End of year tax planning items are more important than ever. Health insurance costs and taxes are now tightly linked, so the last few months of the year are the time to act:

The repayment cap is gone. Starting with 2026 tax returns, there is no limit on how much of your advance tax credit you may have to pay back. If your 2026 income ends up higher than you estimated, especially above 400% of the poverty level, you could be required to repay some or all of the advance premium tax credit at tax time. Check your projected 2026 income before December 31 while you can still do something about it.

Ways to lower your income before year end. Depending on your circumstances, strategies that may reduce your modified adjusted gross income include pre-tax retirement plan contributions, deductible traditional or SEP-IRA contributions, health savings account (HSA) contributions, and realizing investment losses to offset taxable gains.

More people can use an HSA. Beginning in 2026, bronze and catastrophic individual-market plans that meet the new statutory requirements can qualify for HSA contributions. HSA limits are $4,400 for individuals and $8,750 for families in 2026, rising to $4,500 and $9,000 in 2027, plus $1,000 more if you are 55 or older.

Time your big income events. Roth conversions and large capital gains can wipe out a subsidy. In a low-income year, they may make sense up to a point, so run the numbers before year end rather than after.

Approaching 65? Remember the two-year IRMAA lookback. In many cases, income earned around age 63 can affect the Medicare premiums you pay at age 65.

How We Can Help

Health insurance decisions are really financial planning decisions. We are happy to review your Part D options, check your Marketplace income estimate, and coordinate year-end tax moves with your health insurance costs so one does not undo the other.

Sources Medicare Part D (2027 figures) - Centers for Medicare & Medicaid Services, "Medicare Part D 2027 National Average Monthly Bid Amount Information": https://www.cms.gov/newsroom/fact-sheets/medicare-part-d-2027-national-average-monthly-bid-amount-information - Care Compass, "What Medicare Part D Will Cost You in 2027": https://www.carecompasspa.com/blog/what-medicare-part-d-will-cost-you-in-2027 - Medicare Plan Finder: https://www.medicare.gov/plan-compare Medicare Supplement (Medigap) rules - Senior65, "Missouri Medigap Anniversary Rule": https://www.senior65.com/medicare/article/missouri-medigap-anniversary-rule - SelectQuote, "Medicare Birthday Rule 2026: State-by-State Guide": https://www.selectquote.com/medicare/articles/medigap-birthday-rule-states IRMAA - Social Security Administration, Form SSA-44 (Medicare Income-Related Monthly Adjustment Amount – Life-Changing Event): https://www.ssa.gov/forms/ssa-44.pdf Marketplace open enrollment - HealthCare.gov, "Dates and Deadlines": https://www.healthcare.gov/quick-guide/dates-and-deadlines/ - Medical Daily, "Obamacare Enrollment Opens November 1 and Runs Through January 15": https://www.medicaldaily.com/aca-open-enrollment-2027-dates-premiums-deadlines-478808 Premium tax credits and income limits - Beyond the Basics (Georgetown CCF / CBPP), "Yearly Guidelines & Thresholds, Coverage Year 2027": https://www.healthreformbeyondthebasics.org/wp-content/uploads/2026/08/REFERENCE_YearlyGuidelines_CY2027-FINAL.pdf - Internal Revenue Service, "Eligibility for the Premium Tax Credit": https://www.irs.gov/affordable-care-act/individuals-and-families/eligibility-for-the-premium-tax-credit - U.S. Department of Health and Human Services, Poverty Guidelines: https://aspe.hhs.gov/topics/poverty-economic-mobility/poverty-guidelines - ASTHO, "ACA Enhanced Premium Tax Credits: Legislative Developments in 2025 and 2026": https://www.astho.org/communications/blog/2026/aca-enhanced-premium-tax-credits-legislative-developments-2025-2026/ Tax credit repayment and HSA changes - healthinsurance.org, "One Big Beautiful Bill Act Brings Sweeping Changes to Health Coverage": https://www.healthinsurance.org/blog/one-big-beautiful-bill-act-brings-sweeping-changes-to-health-coverage/ - Fidelity, "HSA Contribution Limits and Eligibility Rules for 2026 and 2027": https://www.fidelity.com/learning-center/smart-money/hsa-contribution-limits

Are Today’s Stock Prices Borrowing from Tomorrow’s Returns?

Tue, 22 Sep 2026 17:47:03 GMT

Something that Preston and I have discussed at length is our concern about current valuations across the stock market. Our greatest concern is high-priced U.S. growth stocks, though it is not confined to them.

We are not alone in this. In a July 15, 2026, CNBC interview, Warren Buffett summed up the environment in ten words: “It’s tough to find values when everybody is preferring gambling.”[1]

The ratio of total U.S. stock market capitalization to GDP — a measure Buffett himself popularized — now stands above 230%, within a few points of its all-time high.[2] In 2001, Buffett wrote that investors were playing with fire if that ratio approached 200%.[3]

A different valuation measure tells a similar story: the Shiller CAPE ratio for the S&P 500 is approximately 41, a level reached only near the peak of the dot-com bubble.[4] Berkshire Hathaway's actions back up Buffett's words. After fourteen straight quarters as a net seller of stocks, the company ended March holding nearly $400 billion in cash — one of the largest corporate cash positions in American history.[5]

I want to be careful here, because we are not calling for a market correction, and we view timing the market as a loser’s game. Buffett is not calling for one either (Berkshire turned net buyer of stocks in the second quarter of 2026). [5] High valuations are not a sell signal. They can persist for years, and waiting for a cheaper entry point can mean missing further gains.

What elevated valuations do tell us is something more modest and more useful: the price you pay can influence the return you can reasonably expect. In our view, today’s prices leave very little cushion for disappointment. Most businesses growing at a normal rate are already priced as exceptional ones.

Chart sources: Robert J. Shiller; Multpl.[4,6] CAPE: 40.94x at the September 18, 2026, close. Bars show average subsequent ten-year annualized real total returns for 1,620 overlapping monthly starting periods from 1881–2015, with returns through 2025. Returns include reinvested dividends and are adjusted for inflation, before fees, trading costs and taxes. The periods are not independent. Ranges exclude the lower boundary and include the upper; “25x+” means greater than 25x. Outcomes varied widely. The highlighted bar is a historical category average, not a forecast at today’s valuation. Past performance does not guarantee future results.

For most of our clients, the practical question isn’t whether to be in the market. It is whether their portfolio is built to survive a bad stretch at the wrong moment. If you are five years from retirement, or five years into it, the timing of losses matters. Poor returns early in retirement, combined with withdrawals, can do lasting damage by leaving fewer assets to participate in a recovery. That risk can be managed but is often ignored.

That is the part worth thinking about right now — not the forecast, but the construction.

SOURCES

1. CNBC. Buffett on the market. July 15, 2026. The quotation is reproduced in CNBC’s official post linking to its interview coverage.

2. GuruFocus. U.S. market capitalization to GDP. The page reports 234.6% for September 19, 2026, against a series high of 236.4%. Indicator definitions and coverage vary by provider.

3. Warren Buffett, Fortune. Stock market essay. December 10, 2001.

4. Multpl. Shiller PE Ratio. September 18, 2026 close: 40.94x. Historical maximum: 44.19 in December 1999. CAPE uses ten years of inflation-adjusted earnings.

5. Berkshire Hathaway. First- and second-quarter 2026 Forms 10-Q. Consolidated cash, cash equivalents and short-term Treasury bills totaled $397.383 billion at March 31 and $365.514 billion at June 30. These totals include unsettled Treasury purchases. Second-quarter equity purchases of $23.467 billion exceeded sales of $3.693 billion, calculated by subtracting first-quarter cash flows from first-half cash flows.

6. Robert J. Shiller. U.S. stock market data. Latticework calculations from ie_data.xls, retrieved September 18, 2026. Each return equals (real total return index at month t+120 ÷ index at month t)^(1/10) − 1. Category averages of 11.3%, 7.6%, 6.0%, 4.5% and 3.1% were recalculated and confirmed. The series includes historical predecessor data, not the modern S&P 500 throughout. Results depend on the sample and category definitions; indexes cannot be invested in directly.

Investment advisory services are offered by Latticework Investment Management, LLC. The information above is for educational and informational purposes only and should not be considered personalized financial, investment, tax or legal advice. Investing involves risk, including possible loss of principal.

Solving for Retirement: Social Security, Health Insurance, Taxes, and Investments

Wed, 16 Sep 2026 13:32:24 GMT

Planning for what we hope is a multi-decade retirement is something that deserves significant time and consideration. Here is where to start:

Social Security

Have a tailored Social Security plan for your retirement. An NBER study found that the median household headed by someone ages 45 to 62 gives up $182,370 in lifetime spending by not optimizing when they claim. For our clients, we use an analysis tool that requires your specific information and generates a plan tailored to you.

Health Insurance

Understanding the ins and outs of Medicare is vital. You need to consider all costs, not just the premiums, and ensure that you navigate the enrollment windows. Getting this wrong could lead to either unnecessary premiums or to lifelong penalties. However, retirement doesn’t always need to wait until Medicare starts. With some good financial planning and healthcare tax credits, an early retirement could be available.

Investments

Understand what you own and why. In most cases, we see that a moderate allocation between stocks and bonds is appropriate for pre-retirees and retirees. Which stocks and bonds you own is important. Ensure you have an advisor that can adequately explain the different types and which environments they make sense in. In the current environment we see a lot of growth-focused stock portfolios. Understand the risk inherent in growth stocks and consider value stocks, small-cap stocks, and international stocks too.

Fees and Taxes

These can erode your hard-earned wealth. Understand what your advisor costs, what the underlying securities cost, and if they are tax efficient. Financial products are not free. Annuities have fees, spreads, and commissions. Index funds have inefficiencies and expense ratios. Mutual funds can have 12b-1 fees and capital gains distributions. None of these are necessarily bad, but taxes and fees directly affect outcomes.

Source: NBER Working Paper 30675 (2022) — https://doi.org/10.3386/w30675