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In this Episode of the Secure Your Retirement Podcast, Radon Stancil and Murs Tariq discuss a timely and often misunderstood topic: tariffs. With tariffs frequently making headlines, especially in relation to trade disputes like the US China trade war, it’s critical to understand what tariffs are and how do they work—particularly for those in or nearing retirement. Radon and Murs break down how tariffs work, how they’re implemented, and most importantly, what the Impact of tariffs could mean for your personal financial plan.

Listen in to learn about the ways tariffs and inflation can influence retirement expenses, affect your investment strategies, and ultimately play a role in your financial planning in retirement. By understanding the mechanics behind trade policies and their economic ripple effects, you’ll gain clarity on how to plan for retirement, regardless of how global politics unfold. Radon and Murs also discuss how their Peace of Mind Pathway and bucket investment strategy helps clients stay prepared for unpredictable changes like trade war effects.

In this episode, find out:

·      What are tariffs and their role in trade policy.

·      How do tariffs work and how they’re implemented.

·      The Impact of tariffs on inflation and consumer pricing.

·      Lessons from the US China trade war and how trade disputes evolve.

·      How to create a resilient retirement plan that addresses economic volatility.

Tweetable Quotes:

“We’re not here to judge whether tariffs are good or bad—but understanding how they work helps reduce financial anxiety.” – Radon Stancil

“A well-built retirement strategy should account for inflation, market volatility, and even things like tariffs and trade wars.” – 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:

Well, you’ve heard the word, tariffs, what are they? How do they work and how do

they impact you? Today, we go through all the details. – We hope you’ve been

enjoying all the episodes from Secure Your Retirement.

There’s a variety of opinions around this and that is tariffs.  What are they? How do they work and how might they impact you when it comes to

your retirement plan? So, I want to set this up and let you know that we are not

here on this podcast to try to say that a tariff is good or bad or to make an

opinion or to try to come from that angle. Quite honestly, our real operations that

we do here as fiduciaries and as well as financial advisors is that we feel that

we need to be able to understand what’s going on in the economy, understand how

things are going to get impacted and then set our clients and those that are going

to work with us up in a way that they will not have undue stress and they can

have things that come about maybe that they’re not used to or maybe they didn’t

know how they work and maybe these things create anxiety. And so we want to explain

it without the rhetoric of one opinion over the other and simply just kind of go

down the path of what it is and how it works. And then we’re going to, we’re

going to wrap up this particular episode with saying, what are some things that you

can do to be able to be prepared? No matter how this plays out with tariffs,

no matter how it affects things with pricing, how can we do that. So that’s kind

of the premise of this particular episode. So, we’re going to just start right off

here in the very beginning and let’s just get a definition. So, I’m going to ask

you, Murs, if you don’t mind, what is a tariff?

Yeah. And that, like you said,

that word has been thrown around quite a bit here in 2025. And so, a tariff is the

basic definition of it. It’s a tax that’s imposed by a government on goods imported

from other countries and there’s a lot of things that our people are currently

concerned about in the tariff world and what does that truly mean for me and who’s

paying the tariff? That’s a big question and sometimes a misunderstanding. But I

think there’s purposes around the tariff. There’s pros and cons to everything. We

talk about that all the time when it comes to financial planning, investment

strategies, there’s no perfect really anything in this world. So, it’s just

what are we going to end up dealing with in this case of tariffs? And they can be

used for multiple different reasons.

Protecting domestic industries. So, you know, your US based

industries by making imported goods more expensive. So, what that really is saying

there is that if we import from other countries, goods and services from other

countries, and historically, it’s been a little bit cheaper to get goods and services

from other countries. And so, if the government, our government puts a bit of a tax

on those imports, well, what some are saying, the purpose behind that is

protect the U.S. industries here from all essence losing business outside of the

country. So, if it’s more expensive to bring it in to our country, maybe we focus

on the idea of having, it in our country from a production standpoint. And so

preserving that U.S. type of world of industry when it comes to goods and services.

Another is that, well, anytime taxes are involved, it’s usually pretty good for the

government. It generates tax revenue for the government and I think most would agree

that the revenue for the government is incredibly important right now given some of

the things that we’re dealing with the national debt and social security issues

and things that we’re walking into in 2025. Generating revenue for the government is

always going to be key to success for the economy in certain ways. And then the

other can be used as a bit of a tactic or in influencing of trade policies and

negotiations.

We’re seeing some of that as well. This year here in 2025, as we’ll

talk a little bit more about this, this concept of trade war and these battles that

are happening amongst countries as far as, you know, we’re going to impose this

tariff on you and then they’re going to impose this tariff on us to retaliate And

how all that plays out, it becomes just a bit of this kind of trade war

type of perspective of who’s going to pay for what and what are we going to be

able to import and export and not be able to do. So, it’s it can be used as a

bit of a tactic as well. So that’s the high level. It’s a big, the big thing

here. It’s a tax that is paid on the imports and our government or the government

that’s importing it is the one that’s imposing the tax and for multiple different

reasons there. – All right, the next thing is how are they implemented? First is who

actually, sets the tariffs? Well, this is going to be your government, the government

where it might be.

So, if the United States is exporting to another country,

then they can impose tariffs on the goods coming from the United States and then

vice versa. In the United States, Congress can do it, they can set tariffs as well

as under certain circumstances. So can the president of the United States set

tariffs? So that’s kind of who can set it. So, it’s governments that set those

things. And how is it applied? Well, whenever goods get to a border, they’re going to

get assessed, whatever the tariff is for whatever that product is. And you might

hear that sometimes where they are going to say they’re going to have a tariff on certain

things at one rate and then a tariff on something else at a lower rate and maybe

some goods can come through without a tariff because they say we need those products

really bad. So we’re going to let those products come in without the tariff. And so

that’s when you’re hearing it on the news that this particular item could have a

tariff translate a tariff if you want to tax. And that’s probably the easiest way

to think about it because we’re so used to paying taxes. So, you could say You’re

going to get taxed this much on this thing and you’re going to get taxed this much

on another.

And then the impact. What is the impact to importers and consumers?

Well, think about it. If taxes were to go up and a company were having to pay

higher taxes, what are they going to do? They’re going to raise the price of the

goods. Same thing is going to happen if there are tariffs that have to be paid or

taxes that have to be paid on goods that we are trying to import into let’s say

in our case the United States, then the companies that are buying those goods,

whoever they might be, they’re going to buy them at a higher price, which means

what? They’re going to have to raise prices to the consumers. So that’s the impact,

okay? The impact is we could slow down imports, slow down exports, but we could

also have higher pricing. And that’s what you’re hearing right now in the news, is

how is this going to really play out. And you’ve actually heard that, yeah, an

admission from any of the parts of the government that say we want to impose

tariffs that in fact it could create higher prices for a period of time. So that’s

kind of the information that we’re getting.

But now when you hear about tariffs in the news, I think a popular one is with China in

particular. So, if you want to give just a little, and I think you talked about

this already about the trade war and how to help that played out. Yeah. So, you

know, if we go back into history, you don’t have to go too far back as 2018 -2019

when the US and China had this trade war all around tariffs, you know, what we’re

dealing with here today in 2025, we just don’t know what’s going to end up

happening with that. So, we can only go back and look at history, but that happened,

you know, not too long ago and this back and forth on putting tariff increases on

each other on certain goods and imports on both sides of the coin.

Electronics, furniture, clothing, and then China responded with tariffs on American

products such as soybeans and automobiles. And this became this big trade war. And

the bottom line is, well, what was the impact? That’s what most people care about,

is how is this going to affect me in my retirement? And they led to, obviously,

like Raiden said, increased cost for the businesses, which then got pushed down into

for the consumers. And it became, when you think about trade wars or war in

general, there’s going to be disruptions. Disruptions to supply change, industries start

to pivot and start to change things around, which causes its own sets of issues as

well.

And so, there are repercussions in a few different ways of these trade wars

types of things a big thing I think is being having a plan in place being prepared

for whatever we can be prepared for it because there’s always going to be the

unknown but that’s the high level on the US China trade war that happened in

18 and 19 How this one that we’re kind of dealing with today plays out we will

see And I think there are arguments for tariffs on the pro side of tariffs

and on the, on the negative side of tariffs. So, Radon, what are some of those?

– Yeah, so I look at it this way. You get, turn on the TV and hear some pros and

turn the channel and hear some cons. And that, and I think that’s true. They are

pros and cons, but what are the arguments for them? Well, the arguments for them

are protecting domestic jobs. So basically, what you say is, hey, Another,

and this goes by the way, either way, this particular other country, they can, they

are, their labor forces are less so they can produce the product less. Well, we

cannot produce it less here. So therefore, let’s put a tariff on it to make things

a little bit more equal. And that’s kind of the idea behind it. So, what is a

thing we have to think about? Well, if we don’t get the good at a lower price and

we pay a higher price in order for the good to be made. Well, you’re going to

have higher consumer price.

Okay. So you go, well, I want to keep the jobs in a

certain location and I want to do that. But if I do that and it costs more to

make it, then I’m going to have higher prices. So, you kind of got to pick which

battle you’re trying to do here. You can see it’s not really easy. Uh, and we’ve

already talked about this that, uh, trade, um, tariffs can create trade tensions

between governments. And it could escalate into trade disputes. And as Merce has

already said, trade wars where you kind of say, well, if you’re going to do this,

then we’re going to do this. And sometimes you can just lock heads and that not be

a real good and productive thing. But here is the biggest thing that happens to us.

We’re called security retirement. So really, what’s the impact to a retirement plan?

So, let’s hit on that one. Yeah. So, it could go in a few different ways. one that

we’ve talked enough about already in the short podcast is, well, it could result in

increased living costs. Or one could view that as a kind of a forced inflationary

type of environment. And with retirees living on this mentality of,

hey, I’ve got what I’ve got, there’s flexibility there to have inflationary years.

I think every financial plan should have inflation factored in to make sure that we

have the flexibility for whether it’s tariffs that caused inflation or, you know, go

back to 2020. It was a pandemic and what the government did, which had nothing to

do with tariffs that caused inflation. So those things are always going to be coming

our way. But that is the risk. And the scary part of what we’re dealing with is

our cost going up when we’re already in this inflationary environment as it is. The

other is the investment considerations.

What we are living through now and it happened in 2018 and 19 is this uncertainty of how the trade wars are we’re going to play out. And if I’m all in on one particular investment or one particular

strategy, I could be at risk for a significant loss as we have volatility creep up

on us. And the volatility really creeps up because there’s just a lot of things

that play here when it comes to the uncertainty of how long these trade wars are

going to last. What is the resolution of it? Do we lose some of our relationships

with other countries because of this? Do we ever get back to a more affordable way

of living because tariffs raised our costs? That’s where volatility starts to come in.

What can we do? The biggest thing is staying informed, and I think having a

predetermined plan in place that kind of, you know, accounts for a lot of different

potential scenarios coming into play. So, I think, you know, we call it our peace of

mind pathway. Raiden, you want to walk a little bit through what that is and why we

believe it’s so important for a scenario like tariffs or a scenario like something

else that could come at us next year. – Yeah, we worked really hard to try to come

up with a way that we could have a process that people could see it all put

together. So, our peace of mind pathway, the purpose of it is to put together a

structure, take out all the complication and put things in a way that people can

easily see it, understand it, implement it and keep it working and that we can work

along with them in this team environment. So, it really starts with our peace of

mind roadmap and that really the core there is our retirement focused financial plan.

And I think that one’s key because we can run scenarios of higher inflation. We can

run things where we say it’s going to cost more money to live and we can stress test

the plan. And it looks at everything. It looks at the investments. It looks at the

income plan. It looks at taxes. It looks at healthcare. It looks at your estate

plan. It’s looking at all of those things. And then once we have all the plan

planned out, we got the plan, then we got to go implement the plan and then we got

to take care of the plan. That’s what we call our, our nurturing program where

we’re going to not nurture that plan to make sure that it works. But I think one

key element that I want us to close on is really that, that investment strategy and

the investment strategy is so important as we’re getting ready for and living in

retirement. The investment strategy we believe for most of our clients is what we

say, let’s have peace of mind first. That means that we’re not going to go for

unlimited risks with unlimited downside or heavy potential downside.

Now, how much that risk is can vary and we have buckets that we can actually

adjust on that. So could you quickly, Murs, as we close up here, kind of talk

about that bucket strategy and why it’s so powerful? Yeah, I think it’s very

powerful and We want we like to keep it simple. It’s an I think you know, we’ve

experienced It’s a great investment strategy and it goes to the in your head if

you’re listening and you would agree with this statement of Hey, I’ve you know, I’ve

only got so many years left of savings and earnings and I’m going to retire I’m

already retired and you know, I’ve got what I’ve got and I want to make a decent

rate of return I just don’t want to lose a bunch of money like I did in 2008

with that big financial crisis, we believe the bucket system works rather well. So

we can take different types of risk and different types of segments with our money.

So, we believe in three buckets, the cash bucket, and that’s as simple as, you know,

you could view it as your emergency fund or your on -hand money just for things

that come up and we want to be, you know, in a comfortable place there. So, we let

clients typically decide how much cash do you like to have on hand? Once we know

that, then we look at what we call the safety and income bucket. And that is

really, we’re taking into account what do we need to generate an income to cover

our essential income needs and some of our wants maybe. And we want to have that

flowing in in a regular predictable manner that’s not correlated to the stock market

that’s not exposed when the markets are having issues in volatility like we are

seeing today.

And so, it could be your social security is in that bucket and maybe

a pension, but on top of that, we need safe assets that are going to generate a good

return, but also that when the market’s down 30%, we know that this bucket will not

be exposed to any market losses. So that way, as we’re withdrawing over here, we’re

never withdrawing when it’s down. That’s the key piece here. Then our third bucket,

that’s our risk bucket. We call it the growth bucket and it can go up and down.

It’s the market. It’s those riskier assets. And we want it to have more of this

longer term approach. We don’t want to be going into this bucket every single month

for our own paycheck. We want it to have a longer-term time horizon so that if we

do run into tougher years in the market, well, we’ve got a lot of our income

covered through the income and safety bucket. And the growth bucket really becomes a

long -term vehicle or more of an emergency. Hey, I need a little bit of extra cash

this month type of vehicle. But the key is we’re not tapping into it every single

month on the month. It lets the growth or the stock market do its thing. And over

there, we also want to be very well diversified. So, we don’t just say, let’s put

in stocks and bonds. We like to run several strategies within that growth bucket

from stocks in multiple strategies there to bonds if we need bonds,

but also including alternative assets like public liquid investments,

public alternative investments, as well as private alternative investments for our

credited investors. And that just keeps adding more slices to the pie so that we

can take advantage of good market years, but also, we are very well diversified if

we do have some of that volatility creep up on us. – All right, well, we hope as

always, this is giving you some things to think about. If we have brought up

anything that you do want to talk about, feel free to go to our website, top right

-hand corner, click on schedule a call, and our calendar comes right up, and we

would love to be able to have a conversation with you. But we hope you have a

great week. We’ll talk to you again next Monday. – We hope you have enjoyed this

episode of Secure Your Retirement.