by Dave Kutcher
We are aware that there is a certain euphoria stemming from the last quarter stock market returns of 2023 and even a continuation of some positive news in Q1 2024…but, just because there was a short reprieve keeping many from the figurative jump off the bridge, doesn’t mean that the same bridge isn’t in dire need of repair and may fall out right under your feet.
We aren’t sure who we feel the most concerned for in the current financial environment … those young, working and trying to save for their first house, their children’s education and also their ever looming retirement several years from now, or those who are at a point of starting their own retirement journey and in need of specific tools and resources to navigate a plan meeting their biggest concern, outliving the retirement nest egg.
What we are happy to see is that people seem aware that some of the rhetoric out there, attempting to dissuade people from thinking there truly is a crisis, is being met with uncertainty and doubt, rightfully so. Statistics are frequently manipulated to sell a narrative designed to influence behavior. Quoting stats that are meant to alleviate fear in an investors mind do little to help when someone can’t pay their basic living expenses today, something they weren’t struggling with just a few short years ago.
The market perception and strong preponderance for worry and concern in the surveys and other material we have available to us, following first quarter 2024 results, is telling us exactly what people are living through, rather than what the basket of graphs and financial models that are put out by financial and social media outlets are trying to paint as a different story … after polishing and shining that statistical information to be what people want to hear rather than what really is happening out there.
For the younger group of people reading this article, if you are dipping into your retirement plan to meet the needs of your basic living expenses, something is awry. The same holds true if you have altered your retirement savings plans to minimize contributions for your future to meet the rising demands on your family budget.
Published inflation numbers may not be “out of control”, but prices surely have not returned to levels that existed prior to this recent inflationary run. Gas prices are still way up, home heating oil, propane, groceries and on and on.
The things people need to maintain basic needs remain at near record levels. Couple these basic living expenses with higher costs for credit cards, mortgages, car loans etc. and it is easy to see the reality of the strain on those trying to save money.
Planning is key to avoid these concerns and the adage of planning for a rainy day rings as true today as the day the term was coined. Seek out help with your plans, understand that you may have to live below your means, at least for a period of time, and be willing to make hard decisions today that will best serve you in the later years of your life.
For those of you who are about to start or have recently started a new phase in your financial life, the distribution phase (retirement), your planning is not the same as someone of a younger generation. You don’t have the same amount of time on your side nor do you have the same options for producing income. Meeting your fixed income needs in a safe and predictable way while also garnering some growth on your nest egg to keep pace with inflation is a tricky plan … and one where we focus much of our attention in planning with our clients in this age bracket.
Don’t take these challenging times lightly. Decisions you make today will impact you for years ahead. Make sure your plans today are based in reality, are concerned with both short- and long-term results in mind and aren’t simply short term band-aids … and be open to solutions you may not have considered or been aware of. The financial services industry is very competent in creating new, innovative solutions to meet a wide set of needs and wants for people … don’t just assume a cookie-cutter type answer is right for you.
My name is David A. Kutcher, a retired Marine Corp Captain. My business partner in the lower 48 is Richard C. Scott, CLU, LUTCF. For nearly 40 years we have been helping folks with their personal retirement decisions. We encourage you to make an appointment and get ahead of your concerns as early as is possible. You can catch us on the radio every Saturday morning, “Retirement in the Last Frontier”, 8:30-9:30 on AM 650, Keni Radio and on Tuesday mornings, KFQD News Talk Radio AM 750 and FM 103.7. Frontier Retirement, 10928 Eagle River Road; Eagle River, AK 99577, (907) 795-7452.
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