Podcast Episode 355: The Uncertainty of Retirement

Retirement is a milestone that many of us look forward to, but it comes with its own set of uncertainties. How do we plan for a future when we don’t know how long we’ll live, what the stock market will do, or the political landscape that will shape tax laws? The latest episode of the Money Wisdom podcast addresses these questions head-on.

Heath Grossman, CFP® joined the show this week to discuss the complexities of retirement planning with a focus on the unpredictable. When you look at uncertainties of planning, preparing for longevity, navigating stock market volatility, and anticipating changes in tax legislation are a few of the key challenges we have to address.

The conversation is not just about identifying problems; it’s packed with solutions and strategies. It starts with being aware of the emotional aspect of financial planning and how our feelings about certain issues can affect our decision-making process. That’s why we stress the significance of understanding your expenses, planning for inflation, and considering the role of Social Security in your retirement.

The first and foremost uncertainty in life is how long we’re going to live. If we knew that answer, we could build a perfect plan for every person we work with. But we have to plan for longevity to address the fear that you could run out of money. That’s why you need a solid retirement income plan that accounts for all possible scenarios, ensuring that your money lasts as long as you do.

The next uncertainty is the stock market and whether it will go up or down. You have to build an investment plan that prioritizes ‘steady, consistent rate of return’ over chasing high-risk, high-reward investments. Despite the unpredictability of the stock market, history has shown that it generally grows over time but as you approach retirement, your focus should shift towards preserving your capital and minimizing losses.

Then there’s the elephant in the room: the upcoming election. Every year elections roll around we hear questions about the implications for retirement planning. Each election is the same from a planning perspective and we always have conversations about the potential impact on tax rates and Social Security. That’s why you want to consider strategies like Roth conversions and stay informed about legislative changes that could affect retirement savings.

For anyone approaching retirement or already in it, we hope this episode helps you understand how we approach uncertainties. It’s not just about planning for the future but planning for a future filled with unknowns.

Here’s some of what we discuss in this episode:

• One of the biggest uncertainties in retirement is longevity.

• How do you invest not knowing what the stock market is going to do year to year?

• Do future elections matter in retirement planning?

• Will Social Security be around for you in retirement?