Help Me Retire Podcast - Episode 23
- Mike Brown
- Aug 7
- 9 min read
What retirees fear most - and why they might be right
Show notes:
Today’s retirees say they are seriously worried about running out of money... and based on how they think about investing... those fears might be justified...
That... and more... in this episode of... the Help Me Retire podcast...
This is the Help Me Retire Podcast… with your host… Mike Brown… Senior Wealth Advisor with Raymond James Financial Services… and head of Brown Family Wealth Advisors…
Mike is the best-selling author of Your Way to True Wealth: How to Make It Happen, Make It Last, and Make It Matter…
He and his team have been helping clients pursue their dreams of financial independence for the past 30 years… and in the Help Me Retire Podcast… he’ll share his best ideas with you…
And now… here’s Mike…
I wrote about this in a recent edition of Wealth and Wisdom... the weekly email newsletter we publish...
A really encouraging report from Fidelity investments... saying that Americans are now putting money into their 401-k plans... at a higher rate than ever before...
Between employee contributions... and employer matches... the average savings rate in 401-ks... 14.3 percent of income in the first three months of this year... higher than anything we’ve seen before... and that’s fantastic news...
But hold on a minute... at about the same time that news was coming out... Credit Karma tells us that roughly half of Generation-Z... has become so discouraged... that they see no reason to save and invest for the future...
Gen-Zs... mostly 20-somethings... say they can’t find a job they like... and they’ve got too much debt...
So instead of saving... they’re just going to keep spending and figure it all out later...
This is the generation that popularized the phrase... You Only Live Once... which is good... because I’m not sure they’ll be able to afford anything beyond that...
At least the other half of Gen-Z is getting out... finding work... saving money... and learning to invest... so maybe there’s hope after all...
Baby boomers... on the other hand... seem to want to stay on the job for a little longer these days...
New research shows that the average retirement age of American workers... has been creeping up... according to the Center for Retirement Research...
It’s now age 64 for men... and 62 for women... that’s an increase of about three years on average... over the last 30 years...
Why the trend? Four reasons...
Americans overall are living longer... staying healthier... and working in less physically demanding jobs...
Pension plans have largely been replaced by 401-k plans... which give us incentive to keep working and saving...
Three... Social Security has pushed full retirement age from 65 to 67... and it may get extended even further in the future...
And the fourth reason we’re working longer... fewer employers are willing to keep workers on their health insurance plans after they retire...
It all makes sense when you think about it...
We’re living longer than our parents... which means we’ve got more years ahead of us in retirement...
But those extra years will cost more money... so why not work a little longer?
And besides... some of us might even enjoy what we do for a living... more than figuring out how we’d spend our time if we stopped...
Americans might be enjoying longer retirements these days... but that doesn’t mean they’re spending those golden days worry-free...
The 2025 U-S Retirement Survey by Schroders... asked today’s retirees what five things concern them the most financially...
Number one concern... 92-percent said inflation eating into their purchasing power... costs going up faster than their income...
Number two... 86-percent say higher-than-expected healthcare costs...
Third biggest financial worry retirees have... 80-percent say they’re afraid of what a major market downturn will do to their investments...
Four... 71-percent of retirees say they don’t the best way to get income out of those investments... not sure how to live off the money they’ve saved...
And the fifth-largest financial concern of today’s retirees... and this one is always near the top of the list... they’re just worried about outliving their savings... running out of money...
And while we’re talking about studies and surveys... there’s a new one out... that explains a lot about how Americans think about investing... and it might also explain why so many of today’s retirees could indeed run out of money after they retire...
You’re going to want to hear this...
So, if I asked you for your favorite long-term investment... how would you answer? I’m not talking about your favorite stock or mutual fund... what investment category... stocks... bonds... real estate... do you think will have the best performance in the long run?
That’s the same question the Gallup Organization asks Americans... in a poll they conduct every spring...
The results of this poll are surprising consistent year-to-year... and the answers they get... never cease to amaze me...
Number-one answer in this year’s survey... for the twelfth consecutive year... real estate...
37% of your fellow Americans think real estate will be the best-performing investment over the long run...
Number-two... with 23-percent picking it... gold...
Number-three... stocks... with just 16-percent of the vote...
Followed at number-four by savings accounts... and CDs... 13-percent...
Bonds... 5-percent picked bonds as the best long-term investment...
And 4-percent of these folks... believe if you want the best results over time... put your money in crypto-currency...
Now... we obviously don’t know how these predictions will turn out... no one does... we’ll just have to wait and see...
But we can look back... and see how these different investments have done over the last several decades... say... since the end of World War Two...
Here’s a list of nine different investment categories... some of which aren’t in the Gallup survey... and crypto isn’t on this list for obvious reasons... it hasn’t been around long enough to have useful track record...
Let’s start from the bottom...
Number-9... commodities... a lot of investors use this broad category as a hedge against inflation and market volatility... but since World War Two... commodities have returned approximately ZERO percent after accounting for inflation...
Number-8... cash... T-bills... CDs... that people own for safety and liquidity... which is what they give you... but that’s about it...
Returns over the last 80-years or so... just slightly above inflation... yet cash ranks Number-4 on the Gallup investor survey...
Number-7... with long-term returns just one or two-percent a year above inflation... gold...
Gold, you’ll recall... is consistently Americans’ second-favorite long-term investment...
But it barely qualifies as a hedge against long-term inflation...
Sixth best-performing investment since World War Two... government bonds... right behind number-five... investment-grade corporate bonds...
Bonds... as a category... have returned roughly 2-3 percent above inflation historically... not a lot... but better than gold...
Number-four on our list of best-performing long-term investments... real estate... private real estate, actually... like your home...
And number-three... were real estate investment trusts... or REITs...
As a broad category... real estate has historically delivered somewhere between two-and-a-half percent... and six-and-a-half percent above inflation...
That’s a decent return... but is it reason enough to make real estate Americans’ favorite investment category for 12-years in a row?
I’ll bet by now, you have some idea what the top-two investments have been since World War Two...
Large-company stocks... the S&P 500, if you will... is number-two... with historical returns about SEVEN percent above inflation annually...
And number-one... small-company stocks... which have outperformed inflation by more than 8-percent a year on average... over the long run...
Do you remember what percentage of investors in that Gallup survey picked stocks as number-one?
Just 16-percent... way, way behind real estate and gold...
I’m not exactly sure what to make of this survey... Gallup typically does some great... very thorough research... and they’ve done so for a long time...
And the results of this annually survey seem to keep coming up with very similar results year after year...
So, it’s probably a fair representation of how American investors think...
And sadly... I think it’s probably why, overall... so many of them... particularly retirees... are in bad shape financially...
Personal finance author Dave Ramsey’s research shows that more than a third of Americans have more credit card debt than retirement savings...
77-percent of people are said to be living paycheck-to-paycheck...
Gallup says more than 40-percent of Americans don’t even have a retirement account...
And only about a quarter use a financial advisor to help with their investments...
Maybe it’s a lack of discipline that keeps people living paycheck-to-paycheck... and maybe it’s just bad luck or other misfortune that keeps them from saving for retirement...
But to keep on believing that gold and real estate are the best investments you can make for the long-term... when history keeps telling you otherwise... by large margins... well, that’s just ignorance...
Maybe Harry Truman was right after all... when he reminded us... “There is nothing new in the world... except the history you do not know.”
As you get older... and closer to retirement age... you’re going to start hearing from people telling you how tough it can be...
Aches and pains you didn’t use to have... maybe you find it harder to focus and remember certain things... your eyesight and hearing might get worse...
And of course... once you retire and have more time on your hands... it’s easier to get bored... and maybe worry more about things... like your family... politics... and your money...
But there are a LOT of things... especially having to do with money... that can actually get better when you reach a certain point in life...
There are perks... some of which might be new to you... that you should take advantage of when you qualify...
Good old senior discounts, for example... they’re everywhere...
When you eat out... buy certain things...
When you go to the movies... museums... theme parks... and other entertainment venues...
When you turn 50... you’ll get invited to join AARP... which opens a whole new world of discounts... on everything from restaurants to airline upgrades...
And travel... that’s another whole category all to itself...
You’ll get breaks on hotels... rental cars... Amtrak fares... senior passes to national parks...
Once you’re retired and can be more flexible with your vacation plans... some cruise lines offer deep discounts for people who can book at the last-minute...
What else... how about free college courses?
College is expensive when you’re younger... but senior can audit classes for little or no money... at many public and private universities...
Community colleges offer lower tuition rates for seniors... and I should know... I teach one of them...
And for those of us who call St. Louis home... there’s a fantastic program over at Wash-U called... the Osher Lifelong Learning Institute... that’s Osher... O-S-H-E-R... look it up...
You can join for 10-dollars a year... and take all kinds of courses... lectures... and social events...
There are all kinds of government and community services available to seniors...
Transportation to doctor appointments... or to the grocery store...
Senior centers offer low-cost meals sometimes... classes... and entertainment...
And here’s an idea... walk into a public library branch sometime... and ask them what they’ve got going for retirees...
We haven’t even touched on the advantages of getting older when it comes to your personal finances...
Extra tax deductions when you reach 65... a bigger standard deduction...
In some cases... lower property tax rates...
At age 50 if you’re working... you can do catch-up contributions to your 401-k... IRAs... and other retirement accounts...
If you’re enrolled in a health savings account... or HSA... you get to contribute more once you reach age 55...
After age 59-and-a-half... there’s no more 10-percent early withdrawal penalty when you take money out of your IRA...
And once you reach age 70-and-a-half... you can do direct distributions directly to qualified charities up to a certain limit... without having to pay tax on your withdrawal...
Social Security... you know you can start drawing that as early as age 62...
But you probably also know that Social Security will give you a raise every year that you postpone claiming your benefits... all the way to age 70...
And those benefits have automatic inflation adjustments... every year...
Another perk for getting older...
And then there’s Medicare... the government program that pays for health care...
If you qualify at age 65... you get Part A for free... which covers the cost of going to the hospital...
You pay for Part B... to cover doctor visits... and Part D... which covers prescription drugs if you want it... and those are almost always less expensive than paying for health care out-of-pocket or through a private insurance policy...
Finally... here’s one more tip for you... it’s a website... and I want you to write this down... hit the pause button if you need to... but remember this website...
It’s called benefitscheckup.org... that’s benefitscheckup.org...
A free online service that connects older adults... to more than 25-hundred federal... state... and private benefit programs...
Health care... food assistance... prescription drug help... utilities... housing support...
Just go on... enter your ZIP code... check the boxes that apply to you... and off you go... great online service... and it’s free...
So yeah... you’re getting older... we all are... every day... funny thing about that...
And beyond a certain age... yes... we get aches and pains... lose some hearing... forget a few things... maybe even make stuff up...
But there are some definite advantages to getting closer to retirement age and beyond...
There’s a great big world out there...
One day you’ll have enough time to explore it... and if you play your cards right... you’ll never have to pay full price to enjoy it...
I’m Mike Brown... thanks for joining me today... on the Help Me Retire podcast...
Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC.
Investment advisory services are offered through Raymond James Financial Services Advisors, Inc. Brown Family Wealth Advisors is not a registered broker/dealer and is independent of Raymond James Financial Services.
Any opinions are those of Mike Brown and Brown Family Wealth Advisors and not necessarily those of Raymond James. This material is being provided for informational purposes only and is not a recommendation. There is no guarantee that these statements or opinions will prove to be correct. Investing involves risk, and you may incur a profit or a loss regardless of the strategy selected. Past performance is not indicative of future results. Prior to making an investment decision, please consult with your financial advisor about your individual situation.
Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.
