Podcast Episode 306: Financial Truth Bombs

We know you count on your financial advisor to shoot you straight and tell you what you need to hear rather than what you want to hear. That’s what we’re going to do on this episode as Eric drops a few financial truth bombs on us and provides us with a retirement reality check.

Let’s start with bonds, an investment many retirees feel is a safe play. But the truth is bonds aren’t as great for retirees as many people think. They’re often considered a safe investment option due to their relatively stable income and lower risk profile compared to stocks, but they aren’t risk-free. We saw that first-hand in 2022 so understand their limitations before considering them for your investment strategy.

The next truth to share is that income tax rates are at historical lows. It might not feel that way when you file your taxes in April, but the truth is we need to be taking advantage of these lower rates in planning. The reality is rates are likely going up and your plan should factor in future years so you can avoid many of the regrets retirees have early in their retirement when they begin taking distributions.

The final truth bomb we share on the podcast is that the hardest part of investing is managing our own behavior. That might be hard to hear for some people but it’s the reality of investing. A lot of the conversations we have are around the psychology of money because it stirs up all types of emotions within us. That’s especially true when you reach retirement because market movements hit us differently when we’re relying on that money at age 65 versus when we were just saving in our 30s. It’s difficult to manage our own behavior in the face of unpredictability and volatility, which is why you need to have a well-defined strategy that allows you to separate those emotions from investment decisions.  

Listen to the full podcast to hear more on these financial truth along with some other great retirement insight from the team at Johnson Brunetti. If you’re ready to begin having conversations about your financial situation, get started with our complimentary Money Map review.

Here are some of the things we discuss in this episode:

3:22 – Bonds aren’t always as great for retirees as a lot of people might think.

4:32 – Income tax rates are close to historical lows.

5:35 – The hardest part of investing is managing your own behavior.  

8:27 – Is it fake Jake? Experts say 2023 will be a year of economic pain.

12:30 – Mailbag question on helping children with buying a house.

14:01 – A Woman’s Word: Longevity risk

19:54 – Mailbag question on paying for college.