How closely should you pay attention to what is happening with the Fed right now? David answers this and two other questions from the mailbag on today’s podcast.
Have a question or concern as we face things like inflation or a possible downturn? David discusses what you can do and how to think through your financial decisions by answering a few questions from the mailbag.
Joan is turning 62 with plans to work another few years before retiring. She has almost all of her retirement savings in her 401(k) and IRA rollovers. Should she even care about what the Fed is going to do? David says what the Fed is getting ready to do is actually pretty important. The Fed has kept rates low and inflation has been low for a long period of time up until recently. In order to fight inflation rates, the rates are going to go up and liquidity is going to go down. The reason you might care about what the Fed does is the fear that they might do too much too fast, putting us into a recession. You have to be on the lookout for those signs of the next recession because that’s what’s going to cause a tremendous amount of pain in your 401(k) if you haven’t taken precautions to lessen that downturn.
Rob was recently told there was only so much Social Security set aside for him based on how much he put in. He also was told that waiting too long to take Social Security will make that check smaller. Is that true? David says Social Security is on a much shakier ground than it used to be. It might face some changes, but right now your benefit is based on your best 35 years of earnings. David explains what it takes to figure out the ideal age for you to begin taking out Social Security.
John is retired and his portfolio is down about 10 percent since this most recent downturn. He thinks he is a long-term investor but fears this could be like 2001 and 2008 when the stock market went down so much. Is this going to be a similar situation? David says we are at a potential turning point that could just be a correction instead of a downturn. Make sure you are comfortable with the amount of loss you could face. It’s a complicated question, so be sure to let your financial advisor help you navigate these financial decisions as we face situations that we can’t completely predict.
Listen to the entire episode or skip ahead using the timestamps below to skip to a particular question.
0:54 - Should I care about what the Fed is about to do?
7:29 - Will my Social Security checks get smaller if I don’t withdraw soon?
13:18 - Will this downturn be similar to 2001 or 2008?
“You have to be on the lookout for those signs of the next recession because that’s what’s going to cause a tremendous amount of pain in your 401(k) if you haven’t taken precautions to lessen that downturn."
– David Dickens
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CONTACT US
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Overland Park, KS 66210
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