Retirement Realities - Interest Rates

We take a look at the drop in interest rates and the booming stock market with Mark Oberlin - what could this mean for you? 

Episode Transcript

Speaker 1 (00:00):
Happy Halloween you all. This is West Michigan's Morning News
Steve Kelly, bred Katas Schmidti's back with us soon. So
the Fed dropped interest rates, markets are hitting news on
new highs, Inflation may be under control, and billions of
new trade deals are going on. But what does that
mean if you're one of those people who are newly

(00:21):
retired or thinking about it. Let's get to our friend
Mark Oberlin. We're calling this retirement Realities because Mark is retired.
Thanks for doing this today.

Speaker 2 (00:31):
Brother, Always a pleasure. Happy Halloween.

Speaker 1 (00:34):
So, well, how do you handle things like this? Should
you be afraid if you are retired.

Speaker 2 (00:41):
Well, I mean you certainly have more concerns than maybe
when you were working. The reason being if the markets
get disrupted and go down ten twenty thirty percent, when
you're still working, you're taking advantage of that. You're putting
money into your four oh one k. You've got time
to make things up. You're still working, have cash flow. Well,
when you're retiree, you know, your nervous system goes into

(01:04):
a different mode. You start thinking about the worst case scenarios. Hey,
I don't have time to make this stuff up. I
don't have an income any longer. But things are a
little different right now every market, whether it's stocks, bonds, gold, crypto,
real estate. The problem I see today is everything is

(01:25):
working and that rarely happens, and it rarely stays that.

Speaker 3 (01:30):
Way for long mark social Security and Medicare rates for
twenty twenty six is always important when they're announced. Came
out this week, good news in your opinion, or bad news,
well kind.

Speaker 2 (01:40):
Of a little bit of both. So you know, the
long awaited annual bump in Social Security is going to
be about two point eight percent this year, so it's
quote unquote enough to keep up with inflation. But we
all know the inflationary numbers are somewhat gerrymandered a little bit.
They don't necessarily reflect everything thing that we buy on

(02:01):
a constant basis, like computers. Computer costs keep going down,
food doesn't, and so you don't need a computer every
five sevendy years, but you got to eat every day.
So these are the tricky things about the Social Security
cost of living adjustment. The bad news is, or maybe
the worst news is, Medicare premiums are going up eleven
point six percent, So while the Social Security adjustment in

(02:26):
dollar terms is about fifty six dollars for the average retiree.
The eleven point six percent for Medicare is twenty one
dollars a month, and if you also have part D
medical that's about a fifty dollars increase depending on your plan.
And the deductibles are also going up, so it's about

(02:49):
a two to one negative trade off for Social Security
and Medicare recipients.

Speaker 1 (02:55):
So as we come into the final couple of months,
right tomorrow is November, first, what should retirees be thinking
about or what's left of twenty twenty five.

Speaker 2 (03:05):
So, first of all, think of the positives. Every one
of your accounts should be up unless you were just
picking volatile companies all year. So this is the time
to take profits right. Rebalancing is something that people get
complacent on when markets are hitting high I see, you know,
everything's going great. Let's let's talk in the new year.
Let's talk about rebound. Time to do that is right

(03:27):
now into the year. End of the year, so think
about making charitable contributions. What better time to make contributions
to charities when things are at all time high prices.
So one thing a lot of people aren't aware of
is the capital gains tax rates are zero for people
that make joint couples under ninety six seven hundred dollars.

(03:50):
That's a lot of the retirees out there, so you
have to calculate the gain in that number, so you know,
work in coordination with your financial advisor or CPA, But
you could take a lot of gains and pay zero
tax and then anything over that donate to charity. I mean,
there's a lot of like the Jamaica Relief now un
says it's one of the worst catastrophes in history, so

(04:13):
Red Cross needs money. Jamaica Relief needs money. So these
are some of the things you could do. But maybe
think about taking some gains, as in what you're going
to take out for the entire year of twenty six.
I don't normally recommend this. I like to do monthly withdrawals,
but this might be a time in history where you
do take a chunk of money off the table and
just spend that throughout twenty twenty six. So your dollar

(04:37):
cost averaging in reverse. But now you're just taking advantage
of an all time high in the markets and all
time euphoria. The VIX index, which is a volatility index
is at sixteen. It's near historical lows, so it's basically
the what me worry. You should be a little bit
worried on Halloween.

Speaker 1 (04:57):
However, no Mark Overlin. We're calling it retirement realities. Great
stuff is always Thank you, Take care guys,