There’s a good chance your retirement account holds an investment you’ve never heard of, don’t fully understand, and might not be able to get out of. That’s not a hypothetical. It’s a situation Matt Dages is walking into with prospective clients on a regular basis right now — and it’s one of the most urgent conversations happening in retirement planning today.
This Bright Wealth Management Show episode covered that and a lot more: why Social Security is one of the most underplanned pieces of most people’s retirement, what healthcare really costs in retirement versus what people expect, and whether lifetime income is actually too good to be true.
The Private Credit Problem Nobody’s Talking About
Private credit funds have become enormously popular over the last several years, particularly at big banks and large advisory firms. The pitch is straightforward: companies like Blackstone, Apollo, and Aries package loans made to mid-size businesses into funds, sell them to investors, and historically have paid returns around 10% annually. That sounds compelling — until you start looking at what’s actually inside them.
The problem, as Matt laid out on the show, is transparency. Unlike a publicly traded stock where you can look up the price at any moment, private credit funds are valued by third parties — third parties that are often paid by the same institutions doing the valuations. Statements may show a value that’s six months old. The underlying loans, many of which were made to software companies now being disrupted by AI, are coming under serious pressure. Some of the largest funds in this space are down 30 to 40% from their peaks. And in a growing number of cases, the funds are being gated — meaning investors who want out simply can’t get out.
What makes this especially concerning is how these funds ended up in so many retail portfolios in the first place. Large advisory firms and banks have been allocating client money into private credit as a standard practice, often without clients having any meaningful understanding of what they own. Matt described a prospective client who came in with 50% of her retirement savings in a private credit fund — a fund that, it turned out, was partly owned by the same institution managing her account. She had no idea.
The exit problem is real. The entry door into these funds has been wide open. The exit is a different story. If everyone tries to redeem at the same time, and the fund has already been gated, the options narrow fast. Waiting to see how it plays out carries its own risk when valuations may continue to decline.
Matt’s position at Bright Wealth Management has been consistent: if a client can’t understand an investment in plain language, they don’t own it. Private credit funds have been a firm no — not because of ideology, but because the lack of transparency, the fee structures, and the liquidity risk don’t pass the basic test of putting a client’s interests first.
If you’re not sure whether you have exposure to private credit, that’s a reason to call.
Social Security: The Million-Dollar Piece Most Advisors Gloss Over
The average household collecting Social Security in retirement brings in somewhere between $5,000 and $6,000 a month between two spouses. Over a 25 or 30-year retirement, that’s well over a million dollars in income. And yet Social Security planning is one of the most consistently overlooked parts of most people’s financial plans.
Full retirement age has shifted. For most people today it’s 67, though some cohorts had slightly different thresholds depending on birth year. Social Security is taxable — up to 85% of benefits can be included in taxable income depending on overall income levels — and COLA adjustments, while helpful, have historically lagged behind real-world inflation in categories like healthcare and housing.
One newer development worth knowing: the Big Beautiful Bill introduced a senior deduction for individuals 65 and older, providing up to $6,000 per person ($12,000 per couple) in additional deductions through 2028. But there’s a phase-out built in — the higher your modified adjusted gross income, the less you qualify for. A large Roth conversion, a home sale with a capital gain, or an investment property disposition can all push income over the threshold and eliminate the deduction entirely without careful coordination.
The Social Security conversation at Bright Wealth Management starts at the very first meeting. Statements are requested, benefits are analyzed, and claiming strategy is built into the income plan as a core component — not an afterthought.
Healthcare Costs: The Number That Always Surprises People
Outside of taxes, healthcare is the biggest expense most retirees face — and the one most people systematically underestimate. Medicare premiums for Part B and Part D, supplemental coverage, and potential IRMAA surcharges can stack up to several thousand dollars per year per person before anyone gets sick. Add in long-term care, which Medicare does not cover, and the picture changes dramatically.
Long-term care costs have risen sharply since COVID and are not coming down. In-home care and assisted living can run $10,000 a month or more depending on level of need and location. Without a plan — whether that’s a long-term care insurance policy, a rider on a life or annuity contract, or a self-insurance strategy built into the income plan — those costs can deplete even substantial savings quickly. Matt has seen it happen with clients whose parents needed care, and with clients themselves.
The right time to plan for long-term care is not when you need it. It’s when you’re 50 or 55, before premiums for insurance products become prohibitive and before a health event eliminates options entirely. A stress test that models the cost of two or three years of care — inflated to what it will cost 20 years from now — should be a standard part of every comprehensive retirement plan.
Lifetime Income: Is It Too Good to Be True?
The question that kept coming up throughout the episode was whether guaranteed lifetime income is a realistic goal or a marketing promise. Matt’s answer: it depends entirely on how it’s structured and whether it’s built into a diversified plan rather than used as one.
Lifetime income strategies can include Social Security optimization, income-oriented investment portfolios, fixed annuities, or some combination of all three. The goal is to cover essential living expenses with income that doesn’t require selling assets or hoping the market cooperates. When that foundation is in place, the rest of the portfolio can actually take on more appropriate risk for long-term growth — because there’s no pressure to liquidate it during a downturn just to pay the bills.
The version that’s too good to be true is the one pitched as a single solution — one product, one fund, one strategy that handles everything. That’s not a plan. A real plan reverse-engineers from your actual lifestyle, your actual tax exposure, your actual Social Security timeline, and your actual healthcare risk — and builds income streams around those specifics rather than around a product commission.
The tax planning piece Matt emphasized was particularly worth noting. The biggest regret he hears from clients who come in a few years into retirement is that they didn’t start Roth conversions sooner. Every dollar that gets converted at today’s historically low tax rates is a dollar that grows tax-free and won’t be subject to future rate increases or RMD requirements. And unlike most retirement planning decisions, tax planning is one area where acting now — rather than waiting to see what happens — has a clear and compounding payoff.