On this episode of the Retire Once Show, Johnathan and Melissa discuss some of the biggest retirement planning trends. They also discuss the 2023 market outlook as well as their predictions for 2023. With 2022 being one of the worst years in the investment markets, and one of the worst years for the balance 60/40 portfolio, make sure you check out our predictions for the year ahead.
Retirement trends in the US are shifting. How are they gonna impact you and your retirement? This episode we're gonna cover the biggest retirement trends happening right now, as well as share our predictions for 2020. All that and more on today's episode of The Retire One Show.
Hello and welcome to The Retire Once Show the show designed to help you get to retirement, but most importantly, stay retired. I'm your Johnathan Rankin. I'm the founder and CEO of Theorem Wealth Management, and I'm joined as always by my lovely co-host. Hi, I'm Melissa Rankin. Thank you so much for joining us.
Thank you for being here. Happy New Year to everybody. Absolutely. Happy 2023. That's right. We are so happy that you're here. We're gonna make sure that we're coming to you every single week with multiple videos. So before we jump into anything, what do we want people to do? We want you to subscribe, we want you to follow along on this retirement journey, this paradise of episodes that we bring to you every single week.
And we just hope that 2023 is a much better year than 2022, that's for sure. Absolutely. So with that, I mean, 2022 has got to be one of the worst years overall. I mean, I think most people, yeah, especially when it comes down to investing. Absolutely. You look at, uh, there was a chart by Ben Carlson. He put out these charts.
It was the seventh worst year for stocks. Uh, the only other worst years were the Great Depression. Obviously that was never a good year. Uh, great financial prices, a name like that. I mean, , you know, the only other years were really the.com crash and then the seventies, you know, the 19 73 74 Bear Market. So, 2022 did not stack up well.
It just mm-hmm. , it didn't, didn't rank very well, obviously. No, but the most surprising one was that it was one of the worst years. It was in the, it was the third worst year on record for the 60 40 portfolio. Uh, bond investors. It was just not a good year for bonds last year with the rising interest rates.
And, you know, I think that is, uh, hopefully a trend that we can see. Just go away. Go away, . That's right. We, we clearly agree on that, . Yeah, we, we believe that, you know, obviously the 60 40 really had a tough year and I think this year hopefully it might make a comeback so. , that would be good. So with that, let's start with some of the top retirement planning trends that have been developing.
So number one, retirement flexibility. A after, uh, after Covid, I think a lot of people have started to realize life is short. They don't know what's gonna happen, and before that there was always this rush to getting to a certain number. I want to get to a million dollar portfolio, or 2 million, or whatever that number was.
And what we've seen over the past, really two years. It's not really about a number, it's about can you find a balance in your lifestyle and if that requires working part-time or just scaling back and work in general and staying in your same field, figuring out a way working from home. Yeah, I mean, we see a lot of people who are still doing that, even with offices opening back up.
Yeah. It's just a finding a way to create that balance of a lifestyle, whereas it's not necessarily this rush to try to get to a certain number, and I think that's definitely going to. . Um, especially if we do see a recession and unemployment rise, I think we're gonna see the kind of a boom and more part-time work, uh, just so that people can have flexibility in their retirement.
I think with that, it's kind of like the, um, the financial part of it hasn't really become the, it's gone away from being the most important thing. I think Covid kind of brought that forefront for everybody. Yeah. It, it really is going to be about lifestyle balance and I think that's a good. and number two, the 4% rule debate, something we've definitely discussed,
Yeah. We've touched on this quite a bit. Uh, that is still a debate happening all the time in the financial planning going for sure. And it really comes down to, you know, the, just the assumptions that were initially put together by the guy who came up with the 4% rule. Which is funny because, I mean, he was just a financial advisor in the nineties and he just decided to, you know, print out or publish this.
And everybody kind of adopted it as is, as if it's as if it was just law. Law. Yeah. . I love that. Um, but the reality is that there were assumptions that were, uh, put into that 4% rule and low inflation was one of them. As we've seen that climb, I think that's something that, uh, has impacted. And, you know, that 4% rule, so people have been following this, what should they do?
It doesn't mean that you're gonna run outta money if you've been following the 4% rule. You know, really what this means is that you wanna make sure that you are just updating your financial plan, just double checking the numbers, making sure that you're not in danger of running outta money. It's usually not this year or next year that people are gonna run outta money.
If they're using the 4% rule, it's 10 years, 15, 20 years from now. It's just making sure that the longevity of the portfolio is still intact. Utilizing that. . So with the Christmas theme, still fresh in everybody's mind, it's making a list and checking it twice. . That's right. . That's correct. Number three.
Healthcare needs and costs becoming the primary concern for people. Well, running outta money is still the number one concern for most retirees, uh, healthcare costs and paying for those healthcare costs is really number two, and it's rising pretty quickly because we're seeing healthcare costs continue to rise and at some point there's gonna have to be some solution around this.
But that has been a, a big worry, and I think that one is going to continue to be a primary concern moving forward. I agree. Number four, people are becoming more strategic about social security and when to. Yeah, this is interesting. Um, historically, about 60% of people would take Social Security at 62. And what we've seen over really the past decade is that more people are waiting until full retirement age or even later.
In fact, we just did a video about this. We'll link to it right here. Uh, so make sure to check out that when to take your social security benefit. You don't wanna miss it. No, you don't wanna miss it. Um, but right now what we've seen is that since 2010, there were only 5% of people waiting until for retirement age.
And now that number's well over 20%. So we're seeing people be more strategic to just max out that benefit, especially as longevity is something. You know, we're seeing people live longer nowadays, being a little bit more conservative with it. Mm-hmm. , absolutely. Mm-hmm. . Yeah. Some of the other trends that we're seeing develop on the retirement benefit side, we're seeing employers stretching their 401k match.
Yeah. This one's an interesting one. Um, you know what this means when we, when you talk about stretching the four, uh, the four match, this is the percent of salary that they're matching is increasing. So if your employer was, let's say, matching dollar for dollar up to four, . Now they're going to increase that to, let's say 9%, but they're gonna drop how much you're actually getting.
So they might drop it down instead of dollar. For dollar. They might go 50 cents on the dollar. So you're gonna get more of a match, but you might be putting in double in that scenario. So it's a way Oh, where Absolutely. And I think employers are trying to get. You know, their employees more, um, you know, more to save more in their plan.
A little bit more motivated to do it. Yeah. And if you think of before, you only had to put away 4% in your 401k to get a hundred percent of the match, and now you have to put six or eight or even 9% away to get the same amount or maybe a little bit more. I can see how some employees might be frustrated with that, but long term, you know, the whole goal, uh, I think for everybody is to fix this retirement crisis that everybody's worried about this gap.
Mm-hmm. that there seems to be, that's right. Number two, the wide range of new products entering 401ks. Yeah. We've seen a lot of discussion now about in plan annuities, um, and really where this is coming from is trying to really recreate a pension. Uh, because pensions just are a thing of the past. And now what we're seeing is, you know, how can people take this 401K balance and really stretched out into lifetime income.
So we're seeing a lot of, you know, implant annuities that are becoming more popular, e S G investing, you know, so social guidance, investing, and obviously cryptocurrencies, which covered last year. So a lot of different investments are coming into 401ks are going to be introduced into 401ks, and that's just something.
You know, it might be overwhelming for people to see this new menu of different investments that they weren't used to, and so it's gonna be very important as you choose your allocation to just make sure that you're doing the research or, you know, utilizing a professional like us to, to help with that.
Absolutely. Call us. And number three, a big one. The Secure Act 2.0. Yeah, we covered this and we know, you know, tens of thousands of people love that video. So, uh, thank you for watching that and tuning in. Lots of good information on that one. Uh, but this is going to increase the number of people that are investing in 401ks, and it kind of goes back to the last one of, now you have more people investing in 401ks with different investment vehicles.
Really there's gotta be a bigger focus on investor education, and that's what we're looking to provide here on this channel. So if you have. Topics or questions that you would like us to cover, please? Uh, there's a link below where you can submit a question to us. We'd be happy to help with any of that, uh, of those questions.
Absolutely. So with all that, let's dig into the 2023 outlook and the predictions for 2023. I like to just say that the predictions we're talking about, these are just our opinion. We don't have a crystal ball sitting here. We don't know what's gonna happen, but you know, we do like to share our thoughts and predictions as we see them moving forward.
So, uh, and hey, if we're right, we look really good. That's right. Then, then we can give ourselves a pat on the back and you know, and, but when you look at any predictions, just remember the brightest people on Wall Street last. They had no clue what was going on. Uh, last year, the BMO predicted the s and p would end the year at 5,300 Wells Fargo, 5,200 Goldman Sachs 5,100 and JP Morgan 5,050.
And where did the s and p 500? Close 38. 54. Yeah, they were way off nowhere near. And so these are the brightest minds and they were caught completely off guard. And that's why trying to predict short term trends in the market is just a coin. Nobody knows what's going to happen in the near term. And, uh, I think that was, you know, something that we saw play out last year and we saw it back in 2008 as well.
So yes, not, not very on target with those predictions, I guess. So with that, let's look at what Wall Street predicts for this year. Yeah, Bloomberg put out an article, uh, it's called, here's the, uh, here's almost everything Wall Street expects in 2023. It was really interesting. Um, almost everybody at this point is predicting a.
So I think it is probably the. It's the most, you know, anticipated recession of all time so far. It's the one they kind of all agree on. Yeah, it's the only thing I've ever seen people all agree on, but that always makes you think, well if everybody's thinking one way, is it gonna go the opposite? So, um, there's always a chance.
There is some interesting things from the article. We're not gonna go through everything cuz it's very long detail. I would will link to it in the show notes, but, um, Barclay's Capital believes that 2023 will go down as one of the worst years. For the world economy in four decades. Happy New Year. . Yeah, seriously.
Whoever wrote that, I would just wonder what they were doing on New Year's Eve. Were they just sitting there like, uh, like Lieutenant Dan and Forest Gum, like, here we go. Yeah. Whoopee, uh, fidelity International. They believe that a Har Landing at this point looks unavoidable. . So another, another fun one, uh, Deutche Bank.
It's a chapter way to say it though. I think that is, uh, Deutsche Bank has one, I don't know if this is uplifting or not, but they believe the s and p will actually rise to 4,500. But then, It will fall 25% in the third quarter as a downturn bites is what they say, only to bounce back to 4,500 by the end of 2023.
So a bit of a roller coaster They're predicting here. Yeah. A, a, a roller coaster that's going to end higher, but, uh, I guess it's, but hit a little harder. Yeah. But hey, they predict 4,500 by the year, and so, uh, you know, let's hope that happens. That'd be nice. Um, some of the targets by Wall Street, we're gonna go back to our, our favorites there.
The, the BMO who last year was, you might as well stick with theirs. Yeah. I mean, they were only 1500 points off last year. Yeah. So this year they, uh, they predict 4,300. Wells Fargo, uh, they're down a thousand points. They went from 5,200 last year. Now they believe it's gonna be end at 52 or 4,200. This year.
Goldman Sachs is down to 4,000. JP Morgan 4,200. And the most bearish is, uh, b n p, who believes that it will end at 3,400. So, um, they think there's gonna be a correction. Everybody else believes it's gonna be a slight uptick than what we saw last year, so let's hope they're right. Yes, cuz as we've seen.
They could be way off again. Yep. But many are anticipating that unemployment's gonna hit over 5%. Yeah, I think that's, yeah, that's gonna be, uh, the thing that will likely happen, especially if we're gonna go into recession, that's just, they go hand in hand typically. Uh, yes, unfortunately, lots to look forward to in 2023,
That's right. That is right. But with that, we thought we'd share some of our predictions with you guys. So we have, uh, we did these separately. I have no clue what, uh, what Melissa's gonna say on hers, but we have some, you know, just general topics. So, so if they cross over or they're the same, I, I mean, I'd be surprised that they were, but that's why it worked out that way, just so you guys know.
All right, so we'll start with the s and p 500. Remember it ended at 38 54. I believe it's going to end at 3,700. I am a little more positive. I think it's gonna end right above that at 3,900. Wow. So, uh, gonna be a long year of volatility to go nowhere. So that's, uh, that's a fun one. It's still ending positive.
That's true. A little bit. Will we go into a recession? Yes, I believe so. I believe based off it, we will go into recession as well. I think that, uh, this point it's gonna be hard to buck that trend, uh, inflation. So where do you think inflation's going to end the year? Next year? I think it's gonna end at 4%.
4%? I was slightly below that at 3.8. Okay. I think deflation has already kind of hit us, and to me that's something that is not necessarily reflected yet in the inflation number. All right. 2024. Social Security, cost of Living Adjustment. So last year it was one of the largest ones on record, and if you're collecting Social security, I hope you enjoy the raise.
It got this week of, uh, 8.7%. Uh, what do you believe it's going to be for 2023? I think it's gonna be a little bit more realistic at like 6%. 6%. Okay. I'm, I'm going with 4.2% this year. Oh. Little off there, . Um, couple other ones. Uh, you know, we had just one general one about the housing market, so I believe housing is gonna fall by 10%.
What'd you put in the housing category? I went a little bit different. I said that I think mortgage rates are gonna hit below 4%. Something that I think would be great. Wouldn't that be amazing? Four for everybody? Yeah. Which would mean for that to happen. I mean, theoretically then Fed would have to increase rates.
We'd have to hit a recession, they'd have to. Rates pretty quickly by the end of the year. And at some point I can see that happening. Uh, best sector to perform in the economy I believed, or in the market I said healthcare. Oh, I think it's gonna be energy again. Energy again. Second year in a row, she's going with the back to back there.
Okay. Um, I believe bonds are going to have a comeback this year. That's my, uh, one of the things that I think will be one of your hopes. That's one of my hopes. Yep. I think that gold's probably gonna hit a all time high. Okay. That was my one off. That's your, that's your random one. All right. Um, law, this one was kind of interesting.
This is just something around, wanted to have something around retirement planning. Uh, I believe there's going to be a law proposed that is going to increase IRA contributions that will match four contributions. Meaning, you know, right now you can only put, you know, a couple thousand dollars into an ira, whereas you can put tens of thousands into a, uh, a 401k.
I think it's going to eventually get to the point where if you aren't part of a 401k, you should still be able to save as much as you could in an ira. That's just what Interesting. That's a good one. I, I mean, that'd be nice. That would be nice. I don't know if that would happen, but again, that's just our predictions law.
Just to be proposed doesn't mean it has to go through. Just will that be on the proposal docket? Very positive thinking He is. That's right here. That's right. Mm-hmm. , I said that I think based off of this being one of his favorite products, if you've caught any of our previous episodes, HSAs. I think that they are gonna just skyrocket.
Everybody's gonna know about them and have them, and it's just really gonna take off. Kind of ties back into the worry about paying for, uh, Medicare and retire or medical and retirement. Yes, it does. Um, on the 401k side, I believe that 401k annuities will become more common, which was going to lead to a lot more confusion.
So, I don't know if that's necessarily a good or a bad thing. I just think that they're gonna be a lot more prevalent and it's going to lead to just people asking a lot more questions about, is this a good thing? Should I invest in that? And it's all around trying to create that lifetime income. Um, not saying it's a good or a bad thing, but I think it's gonna lead to a lot of confusion.
Confusion's never good. No. Um, I think that crypto's not going to make its way into 401ks. Really. I just, I think it's too, I don't convoluted, I don't know. I just don't see that happening. Yeah. We covered that in a previous episode where there was a law passed that it will allow, uh, 401ks start offering investing in.
Uh, cryptocurrencies and I thought at the time it was really polarizing. I didn't think that I'm surprise it got passed, but it's interesting that you say that. Okay. I just don't think it will. Interesting. All right. Um, I believe that TikTok is going to be banned in the US and there's going to be this really, this push and fight between Meta or Facebook and YouTube.
You know, both are getting into the, that short form content like TikTok, whether it's reels or shorts on the YouTube side. So I think there's gonna be this massive push towards, uh, short form content to take that market share of TikTok. Interesting that you say that, because I actually think that Facebook is going to become kind of obsolete.
Like it's basically gonna be the next MySpace. I mean, I think it's going away. When you say Facebook, do you mean Facebook? Just the, just, just the Facebook. Just Facebook. Not like, not meta, not not, no, no, no. Okay. Just Facebook itself. Okay. Because I feel like it doesn't offer. Nearly as much as I don't know the other ones do.
Yeah. I mean, and I personally. , never use it. That's true. Yeah. And I mean, remember the days where you could just poke people ? Oh yeah. That was odd. Um, never knew what Mark Zuckerberg was getting at with the poke. The Poke, yeah. But, uh, we got one last bonus. One. So obviously we're gonna be, you know, having a lot of investor in retirement education on this channel.
And I believe that our channel's gonna take off with the help of every listener here. And so I'm predicting that by the end of the year, we are going to end with. Over 10,000 subscribers, but we can't do it without your help. So hit that button. Absolutely true. I was shooting for the moon here because I know how amazing our viewers and listeners are.
So I think it's gonna be 25,000. Wow. Mm-hmm. , I feel really good about 2023. I hope that she is right. . And we can't do that without you because at Right. all signs point to 2023 is going to be a volatile year, and I really hope that it's not like, uh, like that one analyst said, it's gonna be the worst year on record for the world's economy.
But hey, such a depressing thought as we are in the first week of January. really is. So just make sure that if anything, you could just help us out by hitting our year end, uh, prediction. Um, but the most important thing that you can do right now is just stay focused on your individual plan. I hate to say it, but just try not to get cute with your investing, um, going in and out and trying to time this market.
It's going to be a lot of head fakes in my opinion. Just like we saw last year, saw a lot of bear market rallies that, you know, you might have thought, Hey, this, the bottom might have, we might have seen it, and all it did was just recorrect. So just be. , definitely stay disciplined, stay focused. Keep saving, obviously.
Keep watching, keep listening. Yes, subscribe. Do wanna miss any of this? We are happy that you're here. This is the first show of 2023, and we look forward to many more. I'm Jonathan Rankin. I'm Melissa Rankin. Thank you so much for joining us.
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