3 Trends to Keep an Eye On When Planning for Retirement

retirement planning

If you’re just trying to get through the present, you’re not alone. But, that doesn’t mean you can forget to look to the future and prepare for challenges you could face. There are indications that we could see higher taxes in the future, more market volatility, and continuing low interest rates. Here are three trends to keep an eye on when planning for retirement.

A Large National Debt

New data from the Congressional Budget Office shows that the national debt is expected to be greater than the size of America’s economy[1]. This hasn’t happened since World War II when the government dramatically increased spending.[2] This is important to note because tax rates remained relatively high in the decades following the war, and the same could happen after this pandemic. Those nearing and in retirement should think about ways to minimize their taxes in 2020 and beyond. This may include converting to a Roth IRA, reviewing an estate plan, and using tax-efficient investing strategies.

An Unpredictable Stock Market

Since March, we’ve seen the market experience major dips and recoveries. Although the initial stimulus packages helped boost the economy, passing more legislation may be difficult with gridlock in Washington. Looking forward, the market has historically done poorly in October during election years,[3] since markets don’t like uncertainty. Most retirees will experience at least one bear market in retirement and the average retiree will likely face three to five bear markets in retirement.[4] That’s why it’s important to manage investment risk and not rely exclusively on timing the market. By assessing your risk tolerance and developing an appropriate strategy, you can help to protect yourself from future market downturns. An advisor can help you create an investment approach that fits your needs and helps to minimize the effect of market drops.

Low Interest Rates

The Federal Reserve recently outlined their plan, and it’s likely that low interest rates are here to stay for more than just the next few months.[5] We could see near-zero interest rates for years, making it difficult for retirees to earn a reasonable amount of interest with their savings. The combination of low interest rates and a volatile market could potentially make generating retirement income difficult, but by no means impossible. Those with savings may have many options for creating guaranteed lifetime income and earning interest on their principle.

No one can predict the future, but anyone can create a plan to help protect themselves against retirement risk. Today’s retirees could face a tough combination of low interest rates, high taxes, and market volatility, and may need to make their money last longer than previous generations. We’re here to help you to and through retirement. To get started on a comprehensive retirement plan, sign up for a complimentary financial review.


[1], [2] https://www.forbes.com/sites/sarahhansen/2020/09/02/thanks-to-stimulus-spending-us-debt-expected-to-exceed-the-size-of-the-entire-economy-next-year

[3] https://www.forbes.com/sites/sergeiklebnikov/2020/08/31/stocks-just-had-the-best-august-since-1984-but-history-shows-trouble-is-on-the-way

[4] https://www.prudential.com/advisors/insights/retirement-readiness/managing-risks-to-retirement

[5] https://www.cnbc.com/2020/08/31/the-fed-could-be-locked-into-zero-rates-for-five-years-or-even-longer.html


The commentary on this blog reflects the personal opinions, viewpoints and analyses of BML Wealth Management’s employees providing such comments, and should not be regarded as a description of advisory services provided by Cooper Financial Group. The views reflected in the commentary are subject to change at any time without notice. Nothing on this blog constitutes investment advice. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance is no guarantee of future returns.

Investment Advisory services are offered through Cooper Financial Group, an SEC Registered Investment Advisory firm. All Insurance Services are offered through BML Wealth & Insurance Services. California Insurance License #0M15550. BML Wealth Management & Cooper Financial Group are not affiliated.

We do not provide tax or legal advice, all individuals are encouraged to seek guidance from qualified professionals regarding their personal situation. Any references to protection benefits or steady and reliable income streams in this guide refer only to fixed insurance products. They do not refer, in any way, to securities or investment advisory products. Annuity guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. Annuities are insurance products that may be subject to fees, surrender charges and holding periods which vary by insurance company. Annuities are not FDIC insured. Indices mentioned are unmanaged and cannot be invested into directly.

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