Episode #17: Financial Blind Spots

Today’s Prep:

When you’re driving, you always check your blind spot before changing lanes. If you don’t, you might find yourself in an accident. Eric covers the blind spots in your financial vehicles.

(Click the featured times below to jump forward in the episode)

Equipping Points:

1:10 – Uncovering The Dangers Of A Market Downturn.

  • Market volatility can be dangerous. It’s easy to weather the financial storm when you’re young, but as you get closer to retirement, a market correction can really eat into your portfolio.

1:30 – An Illustration. 

  • Eric illustrates the danger of a market downturn using two different individuals with the same amount of money in their retirement accounts. He shows us that market corrections affect portfolios differently depending upon when they occur.

3:17 – You Need A Safer Place To Withdraw Income.

  • Until you retire, you’ll probably focus on growing your assets. However, you need to think about how you withdraw income in retirement and how those withdrawals will affect your portfolio. If you’re not careful, risk and taxes will eat into your portfolio and leave you without much income.

4:20 – Inflation Is Dangerous.  

  • Inflation will eat away at your nest egg and negatively impact your buying power. Things will cost more tomorrow than they do today. At a simple inflation rate of just three percent, your income will need to double in 24 years just to keep up with inflation. This is what’s known as the Rule of 72.

6:20 – Medical Costs Are Rising. 

  • Medical and long-term care costs are actually increasing faster than the rate of inflation. Retirees used to be most afraid of running out of money. Now, they’re highly concerned about the rising cost of healthcare. You need a plan for how you’ll pay for healthcare in retirement.

7:10 – Taxes Are Killer.  

  • We’re currently in a period of historically low tax rates. This means, eventually, they’ll have to go up. We know the government has a thirst for money, and we know Uncle Sam tends to spend more than he takes in. This means taxes will probably go up, and your tax-deferred and taxable retirement accounts are going to cost you as tax rates increase. Now might be the time to start tax planning and working with your advisor to mitigate your tax burden.

Today’s Takeaway:

More From Eric:

The host: Eric Peterson - Contact - Call: (515) 226-1500

Subscribe To The Podcast:

Apple Podcasts  -  Google Podcasts  -  Spotify  -  Stitcher  -  iHeartRadio  -  TuneIn

Check out some other recent episodes

Lazy Money

May 16, 2019

Do you have money sitting around without a purpose? We’ll explain the dangers of lazy money, why people have it, and how you can put it to work! Make your money work for you as you plan for retirement.

Read More

Delayed Gratification In Retirement Planning

May 9, 2019

Sometimes, it’s hard to make financial sacrifices when the reward seems so far away. However, delayed gratification can be extremely beneficial when it comes to your finances. Eric talks about four situations when people may be tempted to choose instant gratification over a better long-term pay out.

Read More

If Retirement Were Like A Game Show

May 2, 2019

Everyone loves a good game show, whether it’s The Price Is Right, Jeopardy, or Who Wants To Be A Millionaire? It’s fun to play along, but remember, they’re just a game. Today we’ll talk about game shows and how they relate to your retirement planning process. Ready to play? 

Read More

Financial “Jerseys” and What They Say About Your Plan

April 25, 2019

On game day, it’s fun to wear your jersey and show some team spirit. What you might not realize are the three ways your financial planning process is similar to a jersey. Consider the names, numbers, and symbols on a jersey. How might they be similar to the names, numbers, and symbols on your financial statements?

Read More

Unlikely Wisdom From Unlikely Voices

April 18, 2019

You might not expect to gain wisdom from these popular celebrities. To be honest, these quotes weren’t intended to be about finances either. However, there’s plenty of retirement planning wisdom we can learn from these personalities.

Read More

Misconceptions With Annuities

April 11, 2019

Sometimes annuities are misused or misunderstood, but annuities can be powerful tools if you know how to use them properly.

Read More

Excuses, Excuses, Excuses – Stop Making Them

April 4, 2019

What’s your excuse for doing one thing over another when it comes to finances? Sometimes you want to justify your actions instead of thinking through what is actually best for you and your money. Here are three common decisions people make and why the excuses just don’t add up.

Read More

Technology For Retirement Planning

March 28, 2019

There are all sorts of online tools out there for financial planning. We’ll talk about some of the various technologies and tools to choose from as you prepare for retirement.

Read More

4 Things March Madness and Retirement Planning Have in Common

March 21, 2019

What does your March Madness bracket have to do with financial planning? More than you might think!

Read More

Why Retirement Planning Ain’t What It Used To Be

March 14, 2019

You’ve heard your parents discussing how difficult things used to be. We’ve all heard the adage about walking uphill both ways in the snow to get to school. However, reality suggests retirement planning actually used to be easier than it is today. Find out why.

Read More

Leave a Comment