Do Actively Managed Funds Perform Better Than Index Funds In Volatile Markets? #312
Release Date: 06/30/2026
What Order Should I Start Withdrawing From My Investment Accounts In Retirement, #318
Retire With Ryan
When you’re moving into retirement, you’re most likely to be starting to ask yourself which investment accounts you should start drawing from first. There’s really no universal answer—retirement withdrawal strategies are deeply personal and situation-dependent. But understanding the implications of each account type and the factors that influence withdrawal order can have a massive impact on your tax burden and the longevity of your assets. You will want to hear this episode if you are interested in... [00:00] Retirement withdrawal strategy options [06:37] Roth IRA and...
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3 Ways To Make The Most of Your Restricted Stock Units, #317
Retire With Ryan
On the show this week, I answer a listener question about restricted stock units, or RSUs—what they are, how they're taxed, and the best strategies for managing them as they vest. I'll take an in-depth look at different types of vesting schedules, tax implications, and the practical choices you have when your RSUs become available. This episode is all about giving you clear guidance to help you make informed decisions about RSUs and making sure your retirement strategy is on the right financial track. You will want to hear this episode if you are interested in... 00:00 Explanation of...
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Accessing Your 401k Early With The Rule of 55, #316
Retire With Ryan
For many Americans, the idea of retiring before age 59 and a half often seems out of reach, particularly when the bulk of their savings sits in an employer-sponsored 401(k) or 403(b) plan. Traditionally, the tax code penalizes early withdrawals from these accounts. However, the Rule of 55 could open the door to a more flexible, penalty-free early retirement. On this episode, I’ll share more about this IRS provision, who qualifies, how to use it wisely, and potential hazards to avoid. You will want to hear this episode if you are interested in... [00:00] Overview of the Rule of 55 and...
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How To Avoid Taxes On The Sale Of Your Primary Residence, #315
Retire With Ryan
For many retirees, their home isn't just a place of comfort, it’s one of the largest assets on their balance sheet. However, beyond the emotional value and the years of accumulated equity, there's an often-overlooked reality: selling your primary residence can bring an unexpected tax bill. If you’re contemplating a sale or want to ensure you’re planning wisely, understanding the IRS’s primary residence capital gains exclusion is essential. On the show this week, I break down what this exclusion means, who qualifies, how to maximize its benefits, and the critical planning steps to avoid...
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Give Your Child or Grandchild A Head Start On Retirement With a Trump Account, #314
Retire With Ryan
On July 4, 2026, a groundbreaking opportunity opened for parents and guardians aiming to give their children a head start on their financial journey: Trump Accounts. Created as part of the OBBA Tax Act (“One Big Beautiful Bill” Tax Act) of 2025, these tax-advantaged investment vehicles provide a unique way to grow wealth for minors. In this episode, I break down what Trump Accounts are, who’s eligible for generous bonuses, how to get started, and how they compare to other common savings options like 529 plans. You will want to hear this episode if you are interested in... [00:00]...
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Avoid These 7 Scenarios to Keep Your Medicare Premiums Lower In Retirement, #313
Retire With Ryan
Medicare brings peace of mind to millions of retirees, but for those with higher incomes, there’s an added layer of complexity called IRMAA—the Income Related Monthly Adjustment Amount. If your modified adjusted gross income (MAGI) crosses certain thresholds, you may end up paying substantially more for your Medicare Part B and Part D coverage. In this article, we break down how IRMAA works, outline common scenarios that may unexpectedly raise your premiums, and offer actionable strategies to help you avoid unnecessary costs during your retirement years. You will want to hear this...
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Do Actively Managed Funds Perform Better Than Index Funds In Volatile Markets? #312
Retire With Ryan
When it comes to planning for retirement, one of the most commonly faced decisions is how to invest for long-term growth and stability. In turbulent times, market volatility often generates renewed debate on whether index funds, or their actively managed counterparts, offer the better path for accumulating wealth. On this episode of the show, I’m unpacking what index funds are, how they stack up against actively managed funds, and what the latest data reveals about performance during both quiet and volatile markets. You will want to hear this episode if you are interested in... ...
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Is Your Money Safe With Schwab or Fidelity? #311
Retire With Ryan
This week, I’m tackling a question that’s on the minds of many investors: How safe is your money with major brokerage firms like Fidelity and Charles Schwab? In light of recent high-profile bank collapses and widespread concerns about financial security, I discuss how banks and brokerage firms operate differently, what protections exist for your investments, and what would happen if a major brokerage firm were to collapse. Whether you’re considering how best to safeguard your assets or wondering about the real risks of brokerage failures, this episode will provide the clarity and peace...
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How To Make Your Brokerage Account Work Like A Roth IRA, #310
Retire With Ryan
When it comes to planning for retirement, Roth IRAs have gained widespread attention for their tax-advantaged status and the promise of tax-free withdrawals in retirement. Financial experts, YouTubers, and podcasters have been touting the benefits of contributing to or converting assets into Roth accounts for years. But an often-overlooked vehicle could empower you to manage your investments just as efficiently: the humble taxable brokerage account. Surprisingly, with the right strategy, you can even pay 0% capital gains tax, mirroring one of the biggest appeals of a Roth. You...
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5 Reasons To Not Invest Your Retirement Savings In Variable Annuities, #309
Retire With Ryan
Variable annuities are often promoted as a secure way to generate guaranteed income during retirement, drawing the attention of retirees seeking stability for their nest eggs. But beneath the surface, these products frequently come with complications and costs that can erode your savings and limit your financial flexibility. In this episode, I share the details of the often-overlooked downsides of variable annuities and give you some important insights every investor should consider. You will want to hear this episode if you are interested in... [03:14] What is a Variable Annuity?...
info_outlineWhen it comes to planning for retirement, one of the most commonly faced decisions is how to invest for long-term growth and stability. In turbulent times, market volatility often generates renewed debate on whether index funds, or their actively managed counterparts, offer the better path for accumulating wealth. On this episode of the show, I’m unpacking what index funds are, how they stack up against actively managed funds, and what the latest data reveals about performance during both quiet and volatile markets.
You will want to hear this episode if you are interested in...
- [00:00] Understanding index funds and actively managed funds
- [05:55] Stock picking and bond strategies
- [07:21] Comparing index funds to active funds
- [11:44] 2025 market performance and instability
- [13:43] Low probability of selecting an outperforming active fund
- [15:42] Investing in index funds
Understanding Index Funds and Active Management
The conversation focused on clarifying the definitions and roles of both index funds and actively managed funds in a portfolio. Index funds are mutual funds or exchange-traded funds (ETFs) specifically designed to track an index, such as the S&P 500, which comprises the 500 largest companies in the U.S. However, indexes extend well beyond large-cap U.S. companies to include mid-size, small-cap, international, emerging markets, real estate, and various bond markets.
Actively managed funds, in contrast, are overseen by managers aiming to outperform their index benchmarks by selectively choosing investments they believe will generate higher returns. Several points were raised, including that these managers may focus on only a subset of the companies in an index, relying on research, forecasts, and periodic rebalancing in an attempt to add value.
The Cost Factor: Why Fees Matter
Management expenses are an ongoing drag on returns. Index funds typically charge extremely low fees, often around 0.1% annually, because they passively track an index and involve little decision-making. In contrast, actively managed funds average around 1% or more per year, reflecting the higher costs of professional research, trading, and active oversight. This fee gap means that even if an active manager chooses well, they must first clear a substantial hurdle just to keep pace with an index fund.
What the Data Shows About Performance in Volatile Markets
In the volatile year of 2025, only 38% of actively managed funds outperformed their passive benchmarks in the U.S. stock market. For large-cap stocks like those in the S&P 500, the number was even lower—just 30%. International stock managers fared slightly better, with a 48% success rate, and emerging market funds did the best, at 64%.
However, over longer periods, the active management advantage all but disappears. Over 10 years, only 8.1% of large-cap blend active managers beat their benchmarks, with small-cap and international funds performing marginally better, and bond managers seeing a 41% success rate. But for 20-year periods, even those slim advantages deteriorated further.
Should Index Funds Still Be the Core of a Retirement Portfolio?
The data strongly supports favoring index funds for most of a retirement portfolio, especially for stock allocations. Index funds keep costs low, are simple to implement, and historically have delivered better risk-adjusted returns for the vast majority of investors across long time horizons. While some areas, such as certain bond categories or emerging markets, may occasionally offer pockets of relative opportunity for active managers, these successes are rare, short-lived, and hard to identify in advance. For most retirees, sticking primarily with index funds and maintaining a diversified, long-term approach remains the prudent and statistically advantageous strategy, regardless of temporary episodes of market turmoil.
Resources Mentioned
- Retirement Readiness Review
- Subscribe to the Retire with Ryan YouTube Channel
- Download my entire book for FREE
- Morningstar's Active/Passive Barometer Report
Connect With Morrissey Wealth Management
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