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)
[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.
Check out some other recent episodes
Let’s take a look at some of Biden’s executive orders so far in his first few weeks. How could they alter your financial plan?Read More
From managing your income as a contract employee to managing your income in retirement, Eric answers three questions from the mailbag in today’s episode of the podcast.Read More
What financial wisdom can we glean from the sayings of Mark Twain? Believe it or not, many of these quotes are quite relevant today.Read More
Whether you want to learn more about using your HSA or trying to make strategic use of your severance package, Eric answers three questions from the mailbag. Do any of these questions relate to your situation?Read More
What kind of decisions are you making alongside your financial advisor? How do you know if they are doing everything you need when it comes to creating and implementing a retirement plan? Eric talks through what you deserve from a financial advisor and how his team works with clients to meet their needs.Read More