Are We Entering A Financial Apocalypse?

Welcome to the Money Wisdom Podcast where Joel Johnson, CFP® of Johnson Brunetti, reviews retirement and investment topics weekly. Let’s get started…

Today’s Wisdom:

Financial pundits love to predict a coming apocalypse. Doom and gloom might drive ratings, but that mentality isn’t good for your financial health. Join us as we examine the facts and sort truth from hysteria.

What You’ll Learn:

1:56 – The Social Security Apocalypse.

  • Some argue Social Security is going broke. They say your benefit might disappear. We’re not sure the situation is quite that dire. However, there is an issue with the Social Security system. While your benefit probably won’t be cut, you could see changes to the system.

4:00 – The National Debt Apocalypse.  

  • National debt is skyrocketing, and some predict a looming debt apocalypse. They argue tax rates will also skyrocket. Reality suggests the national debt is a problem, and neither political party in Washington seems to have a solution to that problem. This is an issue we can’t control, and regardless of what happens, you don’t want your retirement savings depending on the national debt issue. Control what you can, and don’t worry about the uncertainties.

6:11  – An Interest Rate Apocalypse.

  • People say, “We’ve all gotten used to low interest rates. When the Fed raises them, nobody will want to borrow money, and the economy will grind to a halt.” This is a bit of a stretch. Americans live in a world in which most people are constantly borrowing money. Regardless of what the economy does, people and companies will continue to borrow money. The economy won’t grind to a halt for this reason.

8:17 – An Impending Stock Market Apocalypse.

  • It’s completely true the market has been jetting upward for a long time. Statistically speaking, we are overdue for a crash. However, past performance isn’t indicative of future results, right? It’s impossible to predict when a crash will happen, and we certainly can’t say how bad it will be. Market timing simply doesn’t work.

13:21 – Retirement Planning Just Ain’t Like It Used To Be.

  • You always hear your parents talking about how hard things used to be. We’ve all heard the adage about walking uphill both ways in the snow to get to school. However, reality would suggest retirement planning used to actually be easier than it is today.

14:00 – We’re Living Longer.

  • Longevity is a great thing, but it was a lot easier to plan for retirement when you didn’t have to make your money last as long. We need more income to support our longer lifespan.

16:10 – Healthcare Is More Expensive. 

  • Healthcare is more expensive today than it was for our parents. The quality of the care is better, but it costs more to get this care. Therefore, it’s become a greater factor in retirement.

17:48 – Higher Interest Rates Can Be Helpful.

  • These days, interest rates are low, and that means our money doesn’t earn as much sitting in the bank as it did in the past. That presents a problem when you’re trying to grow your wealth.

19:26 – Pensions Have Gone The Way Of The Dodo.

  • The dodo bird has been extinct for a long time, and pensions have become increasingly rare. Gone are the days of receiving a gold watch and a large pension when you retire.

Final Thoughts:

“You do not want to count on things that you can’t control in your retirement for your retirement security. You’ve to got control as much as you can.”  – Joel Johnson

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Thank you for listening!