How Will These Economic Headwinds Affect Your Retirement?

Time and time again we hear the same questions and concerns from our clients and individuals we meet with.  This week we would like to address some of these concerns and the headwinds that may lie ahead and what you can do to prepare. As we have discussed in previous posts, predictions of a stock market crash and the possibility of another financial catastrophe may occur in the next couple of years.  The official rate of inflation is 2 percent; however, this does not include food costs, energy costs, or healthcare costs, which are all increasing.  On top of the inflation rate, it is predicted that there may be a double-digit increase in healthcare costs in the next year. 
 

In the meantime, the government continues to acquire more and more debt, reaching $25 trillion by 2024 as recently reported by the Congressional Budget Office. The rest of the world isn’t looking any better, currently reaching $83 trillion in debt. If the momentum continues, that number could increase to $150 trillion by 2024. 

The housing markets growth has dramatically stunted as millions of people are still over their heads on their mortgages, regardless of the housing market recovery we have experienced these last few years.  
 

College graduates once upon a time could contribute to the economy and the housing market after they graduated; instead they have built up over $1 trillion dollars of debt. While, unemployment numbers have decreased, wages have not kept up with inflation.  

During these summer months you may find yourself enjoying travel, spending time with family, or appreciating time outdoors, this is also a great time to review your Retirement Income Planning.  Based on some of these concerns you have expressed to us, it may be a good time now to stress test your portfolio. You can stress test your portfolio against events that you believe are likely to occur so that you are protected before they happen, not after. 

Here at Cornerstone Retirement Group, we have tools that we use every day to help people just like you to take a hard look at all of these economic events that are happening in the world to determine whether they will help you or harm you with your specific portfolio, and to help you re-arrange your portfolio, so that if these events do happen, you benefit from the outcomes you want.  

If you would like to see a real life example of a portfolio stress test, tune into Redefining Retirement this Sunday at 5:30 p.m. To speak with a retirement planning specialist, give our office a call (775) 853-9033.