Ep. 303 – Navigating Retirement – Inflation, Market Volatility and Social Security
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In this episode of the Secure Your Retirement Podcast, Radon Stancil and Murs Tariq discuss some of the biggest concerns retirees face in 2025: inflation and retirement, market volatility, and Social Security benefits. As economic uncertainty continues, many are wondering how interest rates and the economy will impact their financial future. Radon and Murs provide valuable insights into how retirees can develop a sound retirement income strategy to navigate stock market fluctuations, optimize Social Security, and ensure financial security.
Listen in to learn about the importance of financial planning for retirees and how a well-structured plan can help you retire comfortably. They emphasize the need for investment risk management and safe investment strategies to mitigate the effects of inflation and market changes. Whether you’re asking, “When should I retire?” or working through your retirement checklist, this episode offers actionable steps to plan for retirement effectively.
In this episode, find out:
· How inflation affects retirement and what retirees can do to manage increasing costs.
· The impact of market volatility and interest rates on retirement planning.
· Why Social Security optimization is crucial and how to maximize your benefits.
· The role of a structured retirement income strategy in securing your retirement.
· The importance of a well-balanced investment portfolio to mitigate financial risks.
Tweetable Quotes:
“Having a solid retirement plan means you won’t be blindsided by inflation or market volatility—it’s about peace of mind.” – Radon Stancil
“Social Security is just one piece of the puzzle; having a financial roadmap ensures long-term security and flexibility in retirement.” – Murs Tariq
Resources:
If you are in or nearing retirement and you want to gain clarity on what questions you should be asking, learn what the biggest retirement myths are, and identify what you can do to achieve peace of mind for your retirement, get started today by requesting our complimentary video course, Four Steps to Secure Your Retirement!
To access the course, simply visit POMWealth.net/podcast.
Here’s the full transcript:
Welcome to the secure your retirement podcast. This is the place were high
achieving professionals come to gain confidence on how to successfully navigate their
transition into and life during retirement. There’s no such thing as a passive
retirement plan. To have a successful financial future, your plan must be actively
managed. Each week, we will bring you action plans and expert interviews that will
help you gain insights, learn fresh perspectives, and finally experience peace of mind
about your retirement. Here to help you achieve your dream retirement and live the
life you deserve are your hosts, certified financial planners, Radon Stancil and
Murs Tariq. Welcome to Secure Your Retirement Podcast. Today we’re going to be
talking to you on a topic that I think a lot of people are asking us about anyway
and we’re having conversations with them. Because right now we’re going through all
of our financial planning strategy meetings with our clients. And it’s this idea of
what’s 2025 going to be like. And we’ve got the answer, which is nobody knows.
We do have things though that we can plan for. so, really the thrust of this
particular episode is to say, we look, we know we’re going to be dealing with some
inflation. We know we’re going to have some market volatility. And then people have
concerns as we do every single year about social security. And that could be from
the perspective of, when should I start taking it and are my benefits at risk? And
so, we’ll kind of talk through all this thing because our goal with this particular
episode, I think is to really try to help you have peace of mind because I think
not talking about it can give you anxiety. And if you go turn on the news, that
can give you even more anxiety because they’re trying to get ratings, they’re trying
to get you to continue to watch. And so, there, every item is potentially blown up
as way bigger than reality. And so, we kind of learned and we teach our clients is
sometimes we have anxiety and that’s undo anxiety. We’re worried about something
that’s never going to happen. so, let’s just kind of say, Hey, let’s have a plan in
place. Let’s put something in place to make it so, that no matter what
Uh, you know, we’re, we’re, we’re not going to be blindsided. And I compare this
all the time now to our most recent crisis that we’ve had to live through, which
was the pandemic. And if you look back at it and you would go in the moment,
you’re thinking, this is the worst thing that’s ever happened in our lifetime. But
when we look back at it today, we go, yeah, it was bad. We had a lot of bad
things that occur through that whole thing, but we navigated it. And so, that’s the
same way as we’re going to look at 2025. so, let’s get started here, Merse, and
kind of talk a little bit about maybe the topic of inflation and how that in fact
affects retirees. Yeah, inflation is still there. I was in a meeting today with the
client, and we were talking to we’re talking through their pathway a little
bit and their roadmap. And we got on the conversation of expenses and how they’re
spending and kind of went into a whole conversation around inflation. The big thing
that was reassuring to the client is that we are in the pathway putting into
account inflation, not just for one or two years, but for the entirety of the plan.
And so, why is inflation still here? Why is it still an issue in 2025?
Well, We’re still battling back what happened in 2020, which was the pandemic,
but also, the amount of money that was put into the economy to keep the economy
afloat by the government, which we knew that there would be inflationary factors. I
don’t think anyone thought it would be lasting here until 2025. so, what’s being done
to combat that a little bit, the Fed is very much so, in the news right now,
every single month about what they’re thinking and where roads are heading. And the
battle is they had to increase interest rates over the last few years to try to
tame inflation a little bit, but also, had this balancing act of, well, if we
increase interest rates too fast, we could really hurt the economy if we do it too
slow, inflation is going to get out of control. And we don’t want something to
happen back in the 70s and 80s where inflation lasted 10 or 12 years.
so, where we sit right now, the Fed is basically saying, hey,
we’ve done some rate cuts back in 2024. And now we sit here in February of 2025,
around this time, early 2025, no rate cuts on the table yet for the year. They’ve
said they need to kind of see more data around inflation where it’s headed, but
also, the strength of the economy. so, projections, there are supposed to be rate cuts
this year, but do we actually get those? How does inflation affect retirees? That’s
the bigger question, right? Just like the client meeting I was in, they’re saying,
yeah, our utility bills are going up, groceries are way more expensive than they’ve
ever felt like, and we don’t really see those costs coming And that is true for
most people, the things that you look at every day and that you use to live every
day, inflation really hasn’t subsided on some of those elements, but we keep being
told that inflation is coming down. I think overall it is and the numbers support
that, but sometimes it’s easy to get kind of spearheaded in the one direction of,
well, where am I truly spending my money and where do I shop at? And I feel like
it’s not being affected, but I think it is. It’s just going to continue to take
some more time. But how does the retiree navigate that? Well, the nice part is,
is that they’re not tied to jobs anymore. Whereas, you know, someone who is tied to
a job can only go shopping at a certain time, doesn’t have time to kind of
navigate deals. so, they’re buying off the rack, full price travel becomes very work
related in the sense of vacations are during a certain periods of the year where it
may be more expensive to travel. so, the retiree has the advantage of time on their
hands where they can kind of navigate, uh, do I travel this year or not? Or do I
travel when other people are not traveling to get better costs, better rates? Um,
and yeah, and then the, the big question of healthcare and the expenses around that,
that continue to go up. So, you know, how do we, how do we battle this idea of
inflation? It all comes back to having a well thought out plan that is revisited
every single year to make sure that the plan and the assets and the fixed income
can support this idea of inflation throughout the rest of our life. Because it’s
going to be there. Inflation is always there, and it ranges all over the place.
What feels like a higher inflationary environment right now, but for the ’80s to the
early 2000s, it was very, very low and we got spoiled. The ’70s to the ’80s was
very high again. so, it’s always going to be there. The question is, is that the plan
that you have in place, does that account for that and do the assets support it?
And we can talk all day about the best way to invest and we’ll talk a little bit
about that and being prepared for that. But thinking through the plan that you have
today and whether or not that’s going to support this idea of longer-term inflation
than we expected. – Yeah, and I think too, just on that topic before we move on to
the next one is, I mean, Murs talked about it, you know, but having what we call
the peace of mind roadmap, that really helps us navigate every one of these topics
that we’re going to talk about today. Imagine being able to sit down and look and
think about that thing like a GPS and going, okay, this happened, how does that out
look and I think that’s the advantage that what we see when our clients are sitting
there they’re not coming in with anxiety they’re coming in and just going hey we
got this how does my plan look and they walk out of the meeting going everything’s
fine everything’s okay not going to affect me but here’s another one market
volatility and interest rates so, you know when we think about what’s going to happen
this year is it possible that the going to cut rates more than where they were.
It’s possible that they’ll get some more. But the reality is just on the topic what
Murs talked about, they want to make sure the Fed wants to make sure that
inflation is under control. so, it’s probably not going to be aggressively dropping
rates. I think we might see ourselves in a holding pattern on the rates. And then
we are going to have things that’s going to create market volatility. And when we
talk about volatility, that does not translate into a market crash. What we’re
talking about is good days and bad days. You look like, oh man, the market’s going to
go fantastic and all of a sudden, the market pulls back a few percentage points. I
mean, and do we think that we could see the markets go up 5 % and back down 5 %?
Absolutely, we think we can do that. Ultimately, we are projecting, and I use that
word very carefully, we do think that this year is going to end positively, but
we’re going to have a little bit of a rocky road in the middle, and we’re going
to have some topics that are going to come up that are going to be a challenge.
We still have the issues with Russia and Ukraine.
And even if you’re listening to this and there’s already been a resolve to say
we’re going to have a peaceable way of dealing with this thing going forward, it’s
not over. They’re still going to be issues there. They’re still rebuilding issues
between Russia and Ukraine as far as their infrastructure. And then on top of that,
you’ve got other geopolitical scenarios that are still hot and heavy going on across
the globe. And so, we’re going to have those types of things that are going to
create volatility. The response as to how things get dealt with here domestically.
Does certain objectives make part of the population not like it?
And does that upset maybe business cycles? All of those things this year I think
are things that are going to create the volatility. I want to come back to though,
if you have a good risk managed approach of your investing. We talk about this,
you can go back and listen to previous episodes. We talk about having a three
bucket strategy. We believe bucket one, have some cash for emergencies. Bucket two,
have an income safety bucket and then have that bucket that’s the growth bucket. But
imagine I’ve got my income safety bucket. It’s providing all of the income I need
for all of my essential income needs and even some of my wants. And if I’m not
retired yet, it’s there for when I do retire. I can then live through volatility in
a much lower anxious state. And that’s the whole key here if you go into the stock
market or into the markets period and you understand that there’s going to be
volatility at any point. We don’t know when it’s going to be there. It’s going to
be there. We know it’s been around for decades after decades. And if I’ve got that
income safety bucket set up correctly, it takes away that stress. And so, we really
put a lot of emphasis on that because we see it every single day when our clients
come in, they are not stressed. I mean, they may have a concern, but they’re not
stressed, and we want to share that message with as many people as possible. – I
hope that you are enjoying the show. By the way, if you are in or nearing
retirement and are someone who wants to gain clarity on what questions you should be
asking, learn what the biggest retirement myths are, and identify what you could be
doing to achieve peace of mind for your retirement, Get started today by requesting
your complimentary video course, Four Steps to Secure Your Retirement. To access the
course, simply visit POMwealth.net /podcast.
If you’re new here or you haven’t done this yet, this is definitely the first step
to get started in applying these principles to your life. so, head over to POMwealth.net /podcast and check us out. so, let’s hit on our next one there,
Merse. Yeah, and adding on to what you just said, Raiden, you know,
we are having our financial plan strategy meetings right now with clients to kind of
help them understand their roadmap, their pathway, see what concerns they have and
everything like that. But one of the main themes that our advisors are talking to
clients about is this aspect of rebalancing. Rebalancing is not a new word,
but especially when it comes to investment strategy. But the thing is, is that over
the last couple years, you’ve had some really good growth market years. You’ve had
2024, which was double digits, 2023 was double digits,
2022 was a down year, but then 21, 20 and 19 were all double digit market years.
so, this idea of growth assets versus safe assets for a lot of people,
including our clients, the growth money has grown faster than the safe money. That’s
how it’s supposed to be designed. And some of our balances and all essence are out
of whack. For example, maybe I have one client that wanted to have 50 % of their
money allocated to safer assets and the other half, the other 50 % allocated to
growth. And over the years, we’ve kind of slipped into a 60 /40 of growth, 60 %
being in growth and 40 % being in safety. so, balances are a little bit leaning
towards higher risk because the growth or the stock market has done better over the
last few years. so, those are big conversations that we should be having to make
sure that our risk is staying in line. And also, markets have made money. Let’s take
some of those chips off the table. Let’s reinvest it into safer assets so, that if
we do have that market volatility like Raiden was talking about, where we do have
that 20 % decline in the market, we’ve kind of prepped for that in the overall
strategy. so, that’s all I’ll say on that. Social security is another big topic that
retirees are concerned about. And so, we want to spend a little bit of time on it
today. The COLA Cost of Living Adjustment, that’s the quote unquote raise that you’re
supposed to get from Social Security from time to time. last year in 2024, it was
3 .2 % this year here in 2025. It feels unfair, but it was two and a half percent
of an increase to people receiving the benefit. And the unfair part about it is
that also, Medicare had increases as well. So, it was kind of a wash. You got to
raise on Social Security, but your Medicare premiums went up a little bit. And so,
your No, no real growth in your fixed income and that’s a that’s a problem for
people, especially if you’re 100 % relied on social security And you know that
that is something to navigate So, you know, you can think about how We talk
about setting up investment strategies and having roadmaps and pathways in place
Social security is fully encompassed in that. One, when do I take Social Security?
How do I take it? Does one person take it early? Does the other person wait till
70? Do we do a combination of the two? so, optimizing Social Security at first is a
huge decision and you were supposed to make sure we get that right. But then also, allocating
assets in a place for them to complement Social Security in a predictable, reliable
manner and not just kind of rolling the dice on the stock market and hope that
everything works out great for us. That’s the other piece of it. There’s a rising
world of alternative strategies out there as far as alternative investments for
accredited investors, private equity, things like that, that are becoming more and
more available, that are not as correlated to the stock market. We see that being
of tremendous value. Other alternatives out there that are just way more accessible
in the marketplace as well. And so, if you ever listen to any of our market type
updates, we do utilize not just one but usually around four or five different
strategies combined together to build that investment portfolio that’s going to be
somewhat resilient or definitely account for higher inflationary areas of your
retirement years. Um, the other piece that we talk about quite a bit in retirement
planning and financial planning is well, the idea is maybe my expenses are going to
be lower in retirement and, and we’re, you know, that’s just not true. The other
one is also, maybe my income, my income tax is going to be lower in retirement.
We’re seeing that not to be true as well, that your expenses go down in retirement.
In fact, with healthcare and then also, you know, the fun things, the things that
you want to do, uh, those are continuously going to cost more and more as we age,
whether that’s travel or hobbies or, you know, spoiling the kids and grandkids that,
that costs something and that cost is not going to go down. I don’t think, uh,
tremendously, it’s only going to stay steady or go up. And so, the expense section
of the retirement plan is rather important and that we tell people, hey, you know,
if you’re retiring this year in 2025, it’s going to take you a full year or two
before you fully realize what, your run rate is in retirement. But to us, that’s a
rather important number because it’s a big basis of how we build out the plans,
right? What do I have to work with and how am I going to spend, how am I going
to spend that money? And do those two questions work well together or do we have
an issue of overspending or maybe in some cases not spending enough not truly
enjoying the retirement years, so, you know, I think the takeaway here is that we
need to plan for Increased cost whether it’s through inflation or we get inflation
under control health care is a big issue social security is not going to cover all
of that So, you know how we balance that idea of spending and then also, longevity
of the plan with a good risk managed type of investment philosophy. All right.
so, let’s take away some actionable steps that you can put into place. Um, I always
tell people, there’s two types of people that are going to be listening to the
podcast. Uh, one is the person who says, I just want to do things myself. And
that’s okay. Then you’re going to have to go and, you know, do your own spreadsheet
and do your own steps, but at least do it, uh, kind of look at everything and try
to build out a plan that you feel comfortable with. And then the other side is
those that says, no, I really would like to have somebody do it for you. We also,
know we’ve got folks that are listening that are clients. And so, what we are making
sure that we do proactively with our client base, and we would encourage you that
if you have an advisor, maybe you have a conversation with them. If you don’t have
an advisor and you want to have a conversation with us, feel free to reach out to
- But What we do is, is we’re going to go through their plan every single year
and we’re going to basically say, let’s update income, let’s update spending, let’s
update where our actual accounts are today, let’s equate for or at least manage
based on this idea, what if we do have a soft year in the market? What does
everything looks like? And at the end of that meeting, 99 .999 % of the time the
person goes, I feel so, much better. I feel so, much better and I can just have the
rest of the year and I’m not worried about the what ifs and it makes a scenario
where you just don’t have to watch the news as much. You don’t have to worry as
much. You can go on that vacation if it’s planned for, and if you had to do some
adjustment, you at least know that you need to do the adjustment. And so,I just
encourage you to take action to look at your plan to try to see if you can get
it figured out. And if you are listening to this and you’re thinking, I’d love to
have a conversation, regardless of the situation, feel free to go to our website.
POMwealth.net, wealth.net. Go to the top
right hand corner and click on schedule call. And our calendar comes right up and
we would be more than happy to have a conversation with you. Um, our goal is, I I
think very clear we want you and everyone else to be able to have peace of mind.
That’s our goal in our firm so, we hope this is at least giving you some I don’t
know balance and thinking and we hope it’s been beneficial We look forward to
talking to you again next Monday