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The greatest risks retirees face today



What are the biggest risks to your retirement?

The occasion to ask is the World Economic Forum (WEF)’s latest Global Risks Report. The WEF, of course, is the international nongovernment organization that holds its famous annual meeting every year about now in Davos, Switzerland. Due to the pandemic, however, this year’s will be a combination of online events and an in-person meeting in Singapore in May.

A key focus of this just-released annual report is the WEF’s “Global Risks Perception Survey,” which is “completed by over 650 members of the World Economic Forum’s diverse leadership communities.” The annual survey therefore represents what the world’s global elite think we should be most worried about.

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Forgive me if I am cynical.

Upon reviewing the results of past years’ surveys, I am struck by how much respondents focus on whatever happens to be most in the news at that time. Like the rest of us, the global elite is guilty of recency bias. That is, they give greatest weight to those events that are most recent.

It’s therefore hard to tell whether the risks that come out on top in this year’s survey are truly what we should be most worried about, or are instead what the media has been most focused on recently.

In the year-ago ranking, for example, “Infectious Diseases” was in last place in a ranking of “The top 10 risks in terms of impact.” At that time, of course, the COVID-19 pandemic was just gathering steam. This year, in contrast, with the global pandemic at the forefront of everyone’s consciousness, “Infectious diseases” is in 1st place.

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I think you will agree that infectious diseases represented just as impactful a risk a year ago as today. What’s changed is our awareness and perceptions.

Another classic illustration of this was the rankings included in the 2009 and 2010 editions of the Global Risks Report, which were prepared in the immediate wake of the Global Financial Crisis. “Asset price collapse” was in first place in those years’ rankings of the top 10 risks in terms of impact. In contrast, such a collapse does not appear in the comparable ranking today.

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Once again I think you will agree that, objectively, an asset price collapse is just as likely today as in 2010. In fact, I would argue that it is more likely, but that is the subject of a different column. What’s different is the immediate past and therefore, per our recency bias, our perceptions of what is the greatest risk.

The bottom line? As we look forward to 2021 and beyond, retirees especially are very aware of how dangerous and uncertain the future is. But there is a good likelihood that what we’re worried about has less to do with objective reality than our perceptions.

That doesn’t mean we don’t face formidable risks. But those risks have always been there, and always will. If there were some way of objectively measuring those risks, both the known unknowns as well as the unknown unknowns, I’m sure we’d realize that those risks collectively are not appreciably more worrisome today than they were a year or two ago—or a decade or two ago.

Psychologists tell us that our minds play tricks on us as we try to make sense of the past: We rewrite history to make it seem as though it was destined to unfold in just the way it did. The consequence is that we systematically downplay how much uncertainty we faced in the past, which in turn makes it seem as though the uncertainty we’re facing right now is unprecedented.

It’s not.

Another reason for humility

Further grounds for humility come from the latest results of an annual survey of Wall Street’s “sure things”—expectations that represent such a widespread consensus among “experts” that they seem almost certain to happen. Larry Swedroe, chief research officer for Buckingham Strategic Wealth and Buckingham Strategic Partners, has since 2010 been keeping track of these “sure things” at the beginning of each year—and scoring how many of them came true over the subsequent 12 months.

For 2020, Swedroe reports, just 44% of these sure things came true. That actually is slightly better than the 11-year average; over that longer period, just 35% of the sure things were graded as accurate.

Swedroe concludes: “Apparently, sure things are not so sure. Keep this in mind the next time you are tempted to react to some forecast, either yours or anyone else’s. And be especially aware when a forecast agrees with your preconceived ideas, as confirmation bias can be a dangerous condition.”

Mark Hulbert is a regular contributor to MarketWatch. His Hulbert Ratings tracks investment newsletters that pay a flat fee to be audited. He can be reached at

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My brother owes $10K to our late father’s estate. There’s no loan agreement and I’m executor. How should I approach repayment?




Dear Quentin,

My father passed and I am the executor of his will.

We sold the house and Dad’s assets with my brother’s help. Probate is done. We are ready to distribute the remainder of my father’s estate, but my brother owes the estate $10,000.

He feels that if he had paid this money back before Dad passed, he would still get half back, and therefore owes $5,000. (Dad also told me that he owed the money before he passed.)

My father’s will says his estate should be split 50/50. I feel my brother owes $10,000 to the estate. I do not want to rock the boat, and will do the right thing in order to keep peace.

What is the proper way to split $200,000 in cash when he owes the estate $10,000? For the record, my brother will abide by whatever I decide. Thank you in advance for your help.

Trying to Do the Right & Proper Thing

Dear Right & Proper,

You are right to not look for trouble where there is none.

Given that there is no notarized loan agreement between your brother and your late father and there is money to be distributed, it would seem simpler and faster to have him sign a note now saying he owes the estate $10,000 and deduct the $5,000 from his eventual inheritance. Done and done. He could, after all, say that the loan was only due to be repaid when your father was alive or, indeed, say the loan was a gift. (The subject of countless episodes of “Judge Judy.”)

Your story is a cautionary tale of what could go wrong. “A hug or a handshake is not sufficient to bind someone to loan repayment. Loans and repayment obligations should be spelled out in writing and include repayment terms upon the testator’s death,” according to the Absolute Trust Counsel, a California law firm. “It is the responsibility of the executor to collect the balance due. An estate cannot be settled until all loans are collected and all debts settled or paid.”

“When an estate is insolvent, the collection of outstanding loans becomes especially important. Creditors want to be paid and will pursue all available resources to accomplish that,” the firm adds. “Many times, unpaid loans create dissension among heirs. In some cases, heirs who owe money still expect to receive an equal share of an estate.”

There is a healthy cash sum from which to deduct your brother’s loan: $105,000 for you and $95,000 for him. It could get sticky otherwise.

Thankfully, your brother also wants to do what’s right and proper.

You can email The Moneyist with any financial and ethical questions related to coronavirus at

The Moneyist: ‘Warren Buffett and Harry Potter couldn’t get those two retired early’: Our spendthrift neighbors said our adviser was ‘lousy.’ So how come WE retired early?

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These money and investing tips can help you sail the stock market’s choppy seas




Don’t miss these top money and investing features:

These money and investing stories, popular with MarketWatch readers over the past week, give you tips about how to navigate the financial markets after February’s bumpy second half and signs pointing to March blowing in with more unpredictable winds.

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This 57-year-old said ‘screw this’ to San Francisco — and retired to ‘delightful’ Albuquerque, where she slashed her expenses by 70%




When Roberta Reinstein moved to the Bay Area roughly 30 years ago to go to law school, it felt to her like a different place than it does now.

“It was possible for a student to live there…it was filled with artists,” she says. But Reinstein, 57, watched as real-estate prices skyrocketed (in just the past decade or so, home values have nearly doubled, according to Zillow) and many artists and less wealthy people had to move out. Nowadays, “San Francisco is only for the wealthy — the super wealthy — unless you’re willing to live with five roommates,” she jokes.

Do you have an interesting retirement story? Email with your story.

As she was watching San Francisco become a hub for the rich, she had a financial setback of her own: a divorce, in which she and her spouse had to split up their assets. And the divorce necessitated she move out of the family home, so she was spending $4,000 a month on a tiny pad to share with her daughter, Eva, she says.

“When Eva was in high school I started to think, do I really need to be here? There are lots of other places I can go.” And the more she thought about it, the more she realized: “Screw this, I gotta get out of here,” Reinstein says with a laugh. “I was ready for a break from the high cost, crowds and Google-fueled insanity of the Bay Area.”

Plus, she loved to flip houses (she’d done a couple in California years ago, before the real-estate prices were so high) and knew that was out of the question for her to do in the Bay Area — so she and her new partner, Peter, considered where else they could live. “We thought for a microsecond that Arizona might be the place, but it was way too hot in the summer.”

Roberta Reinstein and her partner, Peter.

Roberta Reinstein

They settled on Albuquerque for a number of reasons, including the weather, affordability of real estate, access to outdoor activities and the fact that Reinstein’s best friend had recently moved there.

Here’s what life is like in ABQ.

The area: Though it’s perhaps best known for its annual hot-air balloon festival and being the setting for AMC’s hit show “Breaking Bad”, ABQ — which has a population of roughly 550,000 — has a lot more going for it than that. “Albuquerque is a delightful, quirky hidden gem,” says Reinstein.

The Albuquerque Skyline at dusk.


It’s an artsy spot — there are hundreds of galleries and art studios; monthly art crawls, and a robust performing-arts scene — and a city where outdoor enthusiasts flock to. That’s helped along by the miles of hiking and biking trails in the adjacent Sandia and Manzano Mountains, as well as the roughly 300 days of sunshine. (Though January average lows are in the mid-20s, and July highs hit the low 90s.) And Reinstein tells MarketWatch she loves that it’s a diverse city with its own unique cuisine and celebrations.

Of course, there are downsides: Overall crime is high, though Reinstein says that while there are some not-so-desirable neighborhoods, there are plenty of areas that are safe. She adds that she’s never been the victim of a crime other than someone stealing a hose from one of the homes she was flipping. And there is “a fair amount of poverty,” says Reinstein. Plus, she says, the city can feel like it has a lot of sprawl, and she misses great Asian food.

View of the mountains from Reinstein’s yard

Roberta Reinstein

Here’s what MarketWatch recently wrote about Albuquerque.

The cost: Though Reinstein doesn’t keep a strict budget, she estimates that she probably spends about $3,000 a month to live in Albuquerque — despite having pricey hobbies like owning two horses — it costs her $1,250 a month to board them, which is her most significant expense. She says that most things are cheaper in Albuquerque than they were in San Francisco, including energy and gas, and estimates that she spends roughly 70% less a month than she did in the Bay Area.

Reinstein at the nearby stables.

The biggest way she saves money is by not having a mortgage on her home: She bought the four-bedroom, three-bath home that sits on an acre of land for $240,000, using a combination of savings, her divorce settlement and proceeds from homes she bought and flipped in Arizona and New Mexico, she says. And she adds that you can get a “nice house in a decent neighborhood for under $200,000” with smaller homes to be had for $100,000 or so, and can rent a nice place for $700 to $800 a month. Plus, she drives an older car — “a ratty Toyota Tundra truck” — she explains, so she doesn’t have a car loan.

The sitting room in Reinstein’s home.

Roberta Reinstein

Indeed, the cost of living and property taxes in Albuquerque are slightly below average for the U.S., median homes cost under $200,000, according to Sperling’s Best Places — and you can read about New Mexico’s tax situation here.

The bottom line: Reinstein says she plans to stay. “People are super friendly,” she adds, noting that it’s easy to make friends and get involved in things here. She’s part of a ladies walking group in the neighborhood and has made friends from her barn. “I have like two people I still correspond with [from the Bay Area],” she jokes, adding that “I was so wrapped up in my own world there.” But in ABQ, she says: “I had to go back to managing my schedule because I can’t get stuff done. I have so much to do here.”

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