Here it is, mid-January 2022 and we’re watching the markets sell off and interest rates skyrocket. The big question on everyone’s minds: Will inflation cool off the market and the economy? As a result, will we go into a recession because the FED is becoming too aggressive, too late? This episode is going to give you our take on the state of the economy, the markets, and our recommended investment strategies in light of what’s going on.

And on our “Tipping Point” segment: We see lots of financial catastrophes in our line of work and we encourage you to ask this question, seriously: “Are you headed toward the rocks because you’re failing to plan appropriately?” We’ve got some important things for you to consider, so be sure you listen!

• What a difference a year makes… the market is going down daily [1:22]

None of what’s happening this year in terms of inflation and economic strength is much of a surprise. Growth is still going to be solid, unemployment is going down and wages are going up, so the overall economy looks pretty good. But the market hates uncertainty. The FED is letting everyone else leak information about what the FED is going to do, and not saying anything themselves. As a result, the market isn’t responding well. Bob’s advice is that you shouldn’t trust the FED to do what’s in your interest. You can learn a lot from history. For example, old-school stocks and commodities are great options. Learn how to understand what’s really going on behind the scenes (listening to this podcast will help) and what history tells us, resist the urge to panic and cause yourself more trouble, and stick to the fundamentals.

Much of the time financial catastrophe during retirement happens because of things that are overlooked by those trying to plan for their financial future. What sort of things are overlooked?

INFLATION PLANNING: After doing thousands of financial plans for clients, with the average age of those clients being between 40 and 60 years old, so we have a couple of decades of inflation to figure in. At its long-term average, expenses double every 20 years. We see this missed quite often.

ASSUMING EXPENSES WILL GO DOWN IN RETIREMENT: Many of our clients are not worried about the impact of inflation because they assume their living expenses will go down during retirement, Worse, they assume they will be able to cut back on what they spend. But most people don’t and healthcare costs can often cause expenses to stay the same or even go up. This is a big oversight.

TAX PLANNING MISTAKES: The worst kind of “gifting” that you can do is when you gift Uncle Sam more than he’s owed through ignoring your tax situation. Every tax deferred investment you have (IRAs, 401k, etc.) is going to have a “Required Minimum Distribution” during your retirement years. If you don’t plan for that certainty, the income you receive from those RMDs could become a Weapon of Mass Destruction in your financial future because of how it impacts your tax liability through increased income.

RETIRING TOO EARLY: Many retirees are forced to go back to work after they retire because they’ve underestimated the cost of living during retirement. But with a financial plan that includes wealth projections, you can plan for potential shortfalls. Many Advisors out there are winging it, not giving their clients the tools they need to accurately plan for their future. It’s terrible to get to 75 years old and have to go job-hunting.

We have other tips to share with you on this episode, so be sure to listen. This could make the difference between a comfortable, appropriate retirement and one in which you struggle.

• A otherworldly jewel will be auctioned next month ($6.8m compared)

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TODAY’S GUEST: CFP Aaron Dessin — follow Aaron on LinkedIn

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