Maximizing Your 401(k), and Is Retirement Bad for Your Brain?
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Maximizing Your 401(k), and Is Retirement Bad for Your Brain?
May 16, 2026 — 05:23 pm EDT
Written by
Motley Fool Staff for
The Motley Fool->
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In this episode of Motley Fool Hidden Gems Investing, Motley Fool retirement expert Robert Brokamp discusses the following:
- The S&P 500 is near all-time highs, but small caps and international stocks are doing even better so far in 2026.
- A new study finds that retiring before 65 may accelerate cognitive decline.
- The U.S. government’s debt-to-GDP ratio is now over 100%, nearing the all-time high set after the end of World War II.
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A full transcript is below.
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Robert Brokamp: Making the most of your 401(k) and does retirement make your brain decay? That and more on this Saturday’s Personal Finance edition of The Motley Fool Hidden Gems Investing podcast. I'm Robert Brokamp. This week, I lay out 11 steps to making sure you’re maximizing the value of your work-based retirement plan, but first up, some headlines that caught my eye this past week.
The S&P 500 is up 6.4% so far this year, while the S&P 600 index of Small Caps is up 15.7%, and the FTSE Global All Cap ex-US Index of international stocks is up 10.6%. I came across a couple of articles this week, and both of these asset classes that I thought were worth highlighting. The first was published on wealthmanagement.com and comes from Larry Swedroe. He points out that the so-called small-cap premium, and that's the amount that small companies have historically outperformed large companies, seems to have disappeared in recent years, and many have questioned whether it actually ever existed. Larry cites a study from the Bridgeway Capital Management Group, which argues that the problem isn't the premium itself, but how we define small cap.
Their key insight, two groups are dragging down returns and obscuring a premium that is actually robust and persistent. The first group are labeled Fallen Angels, which are former large caps that recently crashed in value. If you take out the stocks that became Fallen Angels over the traveling for years, the returns of small caps improve by 1.57% annually since 1960. The other group is new market entrants, like IPOs, SPACs, Spin-Offs, which tend to underperform often by 2% to nearly 6% per year. Moving on to international stocks, a recent article from Morningstar’s Christine Benz pointed out that after years of underperformance, non-U.S. stocks surged in 2025, returning 32% for the year, compared to 18% for U.S. stocks. This marked a dramatic reversal from the prior stretch. When you go from 2009-2024, non-U.S. stocks returned about 7.6% compared to 14.5% for domestic equities. But beyond better recent returns, international stocks also began to decouple from the U.S. market, which enhances their value as diversifiers.
The Morningstar Developed Markets ex-US index had a 0.92 correlation with U.S. stocks over the three-year period ending in 2022, but that figure dropped to 0.71 by the end of 2025. For those who slept through statistics class, remember that a correlation of one means that two investments move in lockstep, so a lower number means less correlation and potentially more diversification. Merging markets have generally exhibited even lower cor