Sunday, March 16, 10AM ET on YouTube Live. Meet the Press? Pfft. Press here (link) or the image, and don’t forget the notification bell.
It’s the fastest drop from the all-time high in US equity markets, ever. Bloomberg reports that “Baby Boomers Face Lasting Retirement Hit In Extended Stock Rout,” here’s a quote:
And if they were to suffer persistent and deep losses while needing to withdraw money for living expenses it’s likely their portfolios would never fully recover — a scenario experts call sequence of return risk.
KISS doesn’t work when the underlying situation is complicated. This is the point of Jae’s Corner, yanno? I am trying to prevent overwhelming discouragement and pessimism. That is not the same thing as “it’s simple.” The most convenient way for “them” to make it seem easy? “THey” make it seem easier than it actually is by skipping vital steps. Those skipped steps can remain hidden, until put under stress.
My everyday analogy: you cannot tell if a rubber band is flawed until it is stretched, put under water, or exposed to heat. One rubber band crumbles.
Example 1. Dave Ramsey suggests 8% annual withdrawal rate from retirement savings. Let’s look at the math here.
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Jan 1 2025: start with $100,000 » withdraw $8,000, you now have 92%. This is the best case scenario.
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$92,000 goes down 3%: so now you have $89,240. Let’s say market completely stable through the end of this year (we don’t know the future).
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Jan 1, 2026: you have 89,240 and withdraw 8%, i.e. $7139.20. Let’s say the returns are 0%. Means that at the end of 2026, you have $89240 minus 7139.20 = $82,100.
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You can easily run out of money, you are over-reliant on financial markets returns.
Example 2. Excessive risk-taking goes unnoticed, until the market turns. Look at this story. The client had securities that should never have existed. The broker doesn’t know what inside, either, he/she is unqualified to evaluate them. The real problem now? There is no identifiable price, there is no reliable value or estimate of what the holdings are worth. This problem occurs whenever there is some “new shiny object,” which occurs when everything is directly, indiscriminately higher. People discard their common sense out of greed, when common sense could’ve provided the guardrails better than any regulation could.
I’d much rather help the everyday person, but it’s YouTube’s world. I didn’t make the rules.
In This Video
0:00 Introduction: Bob Powell and Jae Discuss Retirement Insights
05:00 Job Loss, Ageism, and White Collar Recession
12:00 Retirement Confidence: Do People Feel Prepared?
18:00 401(k) Rollovers and the Complexity of Managing Savings
25:00 Financial Literacy Gaps: Are We Reaching Enough People?
32:00 Gen Z and Millennials: How They Approach Investing
38:00 The Role of Financial Influencers in Educating the Public
45:00 AI and Financial Advice: Can Machines Guide Retirement Planning?
52:00 Speculation vs. Investing: The Rise of Sports Betting Mentality
58:00 Closing Thoughts: Financial Awareness and Next Steps
The footnotes providing extra insight to sequence risk and the wrongful placement of securities in innocent peoples’ accounts is available to subscribers.
#March #Madness #Jae