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Retirees: The Black Swan Can Be So Cruel

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Retired and soon-to-be-retired investors are in a tough spot. The idea of living off a fixed income is downright scary. Will the economy plunge into a recession? Will inflation continue to eat away at one’s purchasing power?

You know how Your Survival Guy feels about predictions. If there’s one observation that’s true yesterday, today, and tomorrow, no matter how good the economy is or how attractive it might be, some investors always want more. They rub their hands together, wondering when their ship will come in, always feeling like we’re in a recession, and they leverage up to juice more return from their savings. That’s not me. And if it’s you, you might be on the wrong website.

Your Survival Guy learned a long time ago from my father-in-law Dick Young not to be in the prediction business. It’s human nature to have a “gut feeling” about the future. You can’t even watch a game today without being bombarded with ways to bet on any given outcome. You name it, and they’ll place your bet. The same feeling surrounds guessing where interest rates are heading. It’s a national pastime.

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Will there be a better time to buy a home? Will mortgage rates stay around 8%? Will investors, flippers, and fixer-uppers live to fight another day? One of life’s truths is that the speculation crowd—who live and die on prices—have a habit of flying too close to the sun. You hear about their successes, not so much about the losses.

Remember when you bought your first home? Interest rates were what they were, and you’ll never forget how you looked in the mirror and wondered, “Self, how are we going to make ends meet?” Most of you made it happen. And today, you own your home and live debt-free. All of that had less to do with interest rates and more to do with you. You figured life out. You lived within your means and understood there is no owner’s manual for life, but there are some rules to live by.

Action Line: When you reach retirement, your job becomes finding a way to live comfortably within your means. You are bombarded with teaser interest rates and annuities that might make life more comfortable, for now, that is. Then cue the music, the black swan swoops in, and everyone wonders how life can be so cruel.

Protect your assets. If you need help, let’s talk.

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E.J. Smith - Your Survival Guy

E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West (RIP JB) and Paris. Please get in touch with E.J. at ejsmith@yoursurvivalguy.com To sign up for my free monthly Survive & Thrive letter, click here.
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