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Matt Davis — Need2Know Chedditor

Table of Contents

• How Much Can You Really Spend in Retirement?

• Meta Sell-Off Drags Tech Stocks Down

• Sites Under Pressure Over Looted French Goods

• AI Finds Bug Threatening 70% of the Web

• What to Read and Stream This Very Weekend

• Poll of the Day: It’s World-Famous-575™ Time

• Poll of the Day: Courting Controversy

What’s the Stock Market Up To, Eh?

$SPX ( ▼ 1.21% )  $DJI ( ▲ 0.02% )  $NDX ( ▲ 1.59% )  

Companies Mentioned in Today’s Newsletter

$META ( ▼ 6.98% )  $EBAY ( ▼ 0.7% )  $SPCX ( ▼ 9.14% )  $TSLA ( ▼ 3.08% )  $MSFT ( ▼ 2.23% )  $NVDA ( ▼ 4.4% )  $GOOGL ( ▼ 3.15% )  

How Much Can You Really Spend in Retirement?

Ah, retirement: That magical era when every day is Saturday, until you glance at your bank account and panic. So, how much can you actually blow on golf equipment, cruises, or artisanal coffee without eating cat food at 85, assuming you live that long? (Steady on, Matt — Ed.)

Capital Group, the 401(k) titan managing nearly half a trillion dollars in target-date funds for 11 million plan participants, has dropped some new research-backed math on us. Instead of pushing irreversible annuities, they’ve laid out two distinct drawdown approaches. As Michelle Black, principal investment officer of Capital Group’s target-date retirement funds, told the Wall Street Journal, "Thinking about retirement income, we wanted to create something where the beauty is in the simplicity.… Buying an annuity is a decision you can’t undo."

Here are your options:

1. The Fixed-Dollar Route (4% to 4.5%): Withdraw 4% to 4.5% of your starting balance in year one, then adjust that exact dollar amount annually for inflation. Let’s say you’ve got $2 million in your pension pot. So withdraw between $80,000 and $90,000 the first year, and then adjust up for inflation each year. It gives you predictable paychecks for fixed bills, though it carries a higher depletion risk if markets crash late in life. Still, simulations show an 84% chance of keeping at least 10% of your initial balance at age 95. (*I realize Capital Group is pooh-pooing annuities, but if you chose to do one of those instead, a $2 million lump sum usually pays between $120K and $180K a year depending on your age, and the payout structure. So it’s something to consider for those who want more certainty and often, who have smaller pension pots saved).

2. The Variable-Dollar Route (5% to 5.5%): Skim 5% to 5.5% off your remaining account balance at the end of each year. So let’s say the first year, your $2 million portfolio grew by 15%, or $300,000, you then take $115,000 at the end of the year. Of course, when markets dip, your spending budget shrinks; and when markets rally, you get a “raise.” But because your spending adapts, account depletion risk is minimal — with a median outcome of retaining 74% to over 100% of your starting balance.

As Black noted, "401(k) plans have historically focused on helping participants accumulate assets. But there’s a growing number of retirees looking for solutions to help turn everything they’ve saved into retirement income."

Of course, you’ll have to save a given amount to retire with, first. And that’s easier said than done when the markets keep going up instead of bumping up against the threshold they hit in August and simply bobbing up and down because of the war in Iran and fears over an AI bubble. For example.

Meta Sell-Off Drags Tech Stocks Down

Tech stocks took a dive yesterday after Meta’s $META ( ▼ 6.98% ) internal forecasts revealed plans to raise "hundreds of billions of dollars" in debt over several years to finance its massive AI bet. Wall Street responded by wiping more than $115 billion off Meta’s market value as shares tumbled 6% in early trading.

The resulting tremor dragged down tech stocks across the board, sending the Nasdaq 100 down 1.5% and the S&P 500 down 0.9%. Even Elon Musk's empire felt the heat, with SpaceX $SPCX ( ▼ 9.14% ) sliding 4.7% and Tesla $TSLA ( ▼ 3.08% ) dropping 3%. Yet, amid the panic, U.S. Treasury Secretary Scott Bessent attempted to soothe frayed nerves in a private meeting, asserting that he did not see a "systemic problem" with the AI boom.

Unfortunately for nervous traders, tech wasn't the only fire burning. Escalating Middle East tensions pushed Brent crude up 3.3% to $112.39 a barrel, prompting Van Luu, global head of solutions strategy at Russell Investments, to tell the Financial Times that "the risk of escalation in the Middle East is back to the forefront of investors’ minds" while falling stocks "reflect traders’ rising risk aversion." Over in Europe, bond yields surged into dramatic territory. As Rohan Khanna, head of European rates research at Barclays, bluntly put it, "It is a perfect storm, you have an energy inflation story, and you have a fiscal and a political problem." Khanna added that French and Italian bond markets had entered a "tailspin," proving that when Big Tech sneezes, global markets catch a cold.

Quote of the Day

Sites Under Pressure Over Looted French Goods

Looking for a brand-new Louis Vuitton handbag, designer lip gloss, or a fresh North Face jacket at an unbeatable price? Following widespread public unrest across Paris, Lyon, and Marseille — where over 3,000 shops were looted — stolen luxury merchandise flooded online resale platforms like eBay $EBAY ( ▼ 0.7% ) , Vinted, and Etsy $ETSY ( ▲ 4.12% ) within hours.

French government officials quickly turned up the heat on digital marketplaces, demanding aggressive monitoring and real-time cooperation to prevent thieves from turning street riots into e-commerce profits. President Emmanuel Macron delivered a stern warning, declaring that "those who looted will have to pay back, and those who sought to bring down the republic will be held accountable." In response, resale platforms scrambled to reassure regulators; Vinted announced that "our teams have taken immediate action to identify and remove listings linked to the looting…. When our rules are breached, we act against the accounts involved, up to permanent bans." Meanwhile, retail giants faced massive collateral damage, with Carrefour CEO Alexandre Bompard lamenting that "our group is facing an unprecedented situation in France" amid tens of millions of euros in security and operational costs.

Yet, despite promises of stricter monitoring and account bans, experts remain skeptical about whether e-commerce platforms can truly police millions of listings. As Charlotte de Montpellier, an economist at ING Bank, said, "I don’t expect that those companies will be able to track everything.” With total damages estimated at several hundred million euros and more protests on the horizon, resale giants find themselves in a tight spot.

Song of the Day: MacKeeper, ‘Beautiful Stranger’

Here’s a standout track by the rising pop-rock duo Mackeeper, consisting of brothers Nick Harwood and Miles Cohen. Part of their highly anticipated debut album Believe You Me, the track has quickly gained traction among indie pop listeners. So, it’s a lot like this newsletter.

AI Finds Bug Threatening 70% of the Web

OpenAI’s $OPEAZZX ( ▼ 0.59% ) GPT-5.6 Sol model just helped uncover PHP2Shell — a massive memory-management flaw in PHP, the core technology powering up to 70% of the world’s websites.

Discovered by Ryan Austin at cybersecurity firm Calif during an OpenAI-funded audit, the vulnerability allows attackers to gain complete control of an unpatched web server in mere seconds. The flaw had been hiding in plain sight for years, previously dismissed as too complex to exploit — until AI figured out how. When Calif CEO Thai Duong alerted PHP Foundation Security Engineer Volker Dusch, Dusch candidly recalled, “I had a moment of, ‘Oh God, what are we doing now?’.… ‘How do I communicate this?’ And then you calm down, you let the adrenaline flow through, and you get to fixing.”

Fixing it required a frantic, massive effort: Updating nearly 200 files and writing over 10,000 lines of code. The bug is so severe that Ami Luttwak, cofounder of cybersecurity firm Wiz, dubbed PHP2Shell “the most severe AI vulnerability that was ever found.”

The real panic set in when details leaked on Hacker News two days before the scheduled release, forcing engineers to rush out an emergency patch. Dusch noted the early release struck "a good balance to inform defenders... and not give attackers too much time to develop exploits." That race against time is critical, because as Duong colorfully warned, “Some dude on Twitter could take the patches and run AI against it and post some exploit script... All hell will break loose.”

Free Yourself From Advertising Forever!

What to Read and Stream This Very Weekend

My Cheddar colleague Lauren Babbage is all about the reading and streaming recs. So instead of keeping them in our Slack channel, we figured, hey, why not let the Cheddfriends in on the deal? Here are her recs for this week. Take it away, Lauren!

Go Gentle, by Maria Semple — A fun book about female friendship, midlife romance, art, and mystery, with some philosophy sprinkled in. It's a quick read, and I suggest trying to read it over a short period of time. The writing is a little dense (in a good way), but going long periods of time between picking it up might interrupt being in the moment of the story.

The Future Saints, by Ashley Winstead — One of my other favorite books of this year (Into The Blue still takes the top spot). It follows two characters: a music executive trying to prove his worth AND save a washed-up band, and a band member who is struggling with the death of her sister and the reality of life without her. The band blows up on social media, but is that enough to save not only their legacy and careers, but their outlook on life?! It was a page-turner that I didn't want to end. 

And my one streaming rec... Mayday on AppleTV. Matt actually recommended this to me, and I loved it. Ryan Reynolds, a U.S. Navy Lieutenant, finds himself on Russian soil during the Cold War. He needs to get out, quickly, and gets help from an unlikely character (whose personality really complements Ryan's humor). It's funny. Different. Somewhat action-packed. I will say, Ryan Reynolds really plays the same character in every movie...so if you really don't like his humor, you probably won't LOVE this movie. 

Thanks, Lauren! And if you’ve got a streaming rec for us, readers, we’re all ears!

Should You Check Your 401(k) Today?

👎️ 

No.

Poll of the Day: It’s World-Famous-575™ Time

Poll of the Day: Courting Controversy

We asked: What are the odds that a conservative majority Supreme Court finds that Kalshi is a prediction market and that it has nothing to do with gambling?

You answered:

⬜️⬜️⬜️⬜️⬜️⬜️ 100%. James Madison practically died clutching an election parlay slip. (15)
🟩🟩🟩🟩🟩🟩 Same odds as Clarence Thomas turning down an all-expenses-paid yacht. Say, what are those odds, anyway? (216)
⬜️⬜️⬜️⬜️⬜️⬜️ Wall Street calls it hedging, so the Court calls it holy. (26)
🟨🟨🟨⬜️⬜️⬜️ I think they might actually call a spade a spade here and admit it's gambling. After all, they surprised us when they overturned Roe V. Wade. Wait. Wrong comparison. (109)
366 Votes

via @beehiiv polls

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