There's going to be a change. I don't know what that is. I
don't know. I mean, we've all heard the rumors right that they're going
to have that cut benefits by twenty to thirty five percent. They're going to
continue to increase that full retirement age up into the seventies. You know,
I don't know what's going to happen, but you know, at the current
rate, you know, it's just it's it's broken, and you know,
I don't know how long it's going to last. You are listening to Carrie
Letz's Financial Survival Network, where you get valuable information. You just can't find
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are listening too. I'm watching the Financial Survival Network. I'm your host,
Terry Lutz. Well, we got some major issues to discuss the year.
Obviously, the economy is slow and everyone can see that lay off up,
but has offended stood up and take notice. Well, arguably you could say
that their call for lower interest rates although we haven't seen them yet, is
the first salvo in their mission of pupping up the economy and keeping the stock
market going, especially in an election year at sidel is with us now,
So GDP one percent, all right, So it doesn't qualify or classify as
a recession yet, but if we had an honest inflation measure, maybe it
would. Yeah. And you know, I was just talking to to a
client and you know, we're talking about the old saying when it comes to
uh statistics, right, numbers, it's they're they're you know, there's there's
lives, there's damn lives and their statistics right, And depending on what numbers
you're going to use it really you know, you can you can hedge you
one way or the other. But you know, honestly, the way that
I'm looking at this is the FEDS are saying, oh, hey, PC,
that core it's at two percent. That's kind of our tarian number.
You know, I think that they may be looking at that along with you
know that you know one percent GDP. Where now all of a sudden,
yeah, they they have the ability, that's the past that they need to
start lowering rates because we see it. I mean, you and I and
and everyone that we know, I mean, we're we're we're seeing, we're
feeling the slow down already. But uh, I don't know. I think,
well, I do not think we'll be shocked next week during the Fed's
meeting. All right, So they said they're going to cut rates, but
they haven't done it. Yeah, there's three of them for the coming year.
Experts are saying six. And the mean rates have come down on their
own, which is indicative of a possible recession. Mortgage rates, you know,
long term rates, the two year has come down, which give some
breathing room because the Fed funds rates still at five and a quarter, so
they don't really have to do anything perhaps until later in the year. Those
lower rates are no doubt going to be helping the imperiled banking sector too as
well. Right, yeah, and you're absolutely right. You know, I
think the Feds have been looking at it, especially Jerome Powell. They're going
to let the capital markets, you know, do his job, you know,
and that's actually what the market should be doing, is you know,
doing what needs to be done, which is lower rates. And if you
look at what happened in October, you know that thirty year mortgage. It
was you know, eight point six percent at the high, and now depending
on the lender, you know, it's hovering around six And I just saw
the one this morning a little bit below six. So they're coming down on
their own. I don't think personally that the Feds are even going to think
about lowering rates until the mid to the end of the second quarter, which
is May. I also disagree with the experts that they're going to lower it
as much as six times. I don't know how they can do that without
kicking inflation back in because there's a lot of inflationary things going on right now.
All these government jobs are inflationary. We're overspending, which is inflationary,
and so if they lower them too much, it's going to put us right
back to where we were. Yeah, so there's a kind of a new
way out for them. The only thing they get to do now, which
they're probably better off doing nothing than something. But what happens when the market
wakes up one day and says, you'll lie, we wanted to lower a
rates, said you didn't give them to us, and then we have an
inverted yield curve and all of that good stunts. Yeah, you know that
could definitely happen. I think as long as the Beefeds adhere to what they
were talking about before Lauren rates two or three times because they changed it from
four to to three times in August the last year. I you know,
I think the markets are going to be fine. It's just not going to
be you know, a trajectory straight up like it was last year. But
it's an election year. Historically it's always a positive year. You know,
the average is close to eight and a half percent, no matter who's in
the White House and whatever the running is. But I think we have an
narrow window between now and the election to you know, make a little bit
of hay while the sun shines. You know, as long as everything is
status quo, which means there's there's no additional geopolitical issue. We we we
don't have an event like Gaza, you know, or anything major happening or
you know everyone who use of the term black swan. Yeah, all right,
So what about asking this question here? So inflation kicks up, prescious
metals start moving up, but then we have this thing called the January facts,
right, and it's almost never brow. It's one of the most solid
indicators so it goes January, so goes year. Yep. So then we'll
have a dip probably after January or the first second week of February. It'll
did it through till the perhaps the summer, and then the federal start making
some noises because as the late Great allen ablesonset, the Fed is doing what
it does best, which is an elected president right absolutely every time every time,
you know, you know, and if you go back and you look
at the stats during a presidential election year, you know, the turnover from
you know, a Democratic administration to a Republican or Democrat staying you know,
Democrat to Democrat, Republican and Republican. There's really not a whole lot of
variants in that through the end of the year. It's the following year where
there's a little bit of change. But you know, I look every time,
you know, I come on your podcast, I say the same thing.
You know, it's there's there's a debt issue, there's a debt bubble.
But I'm positive this year, especially AI tech, I don't think that
run is done. And you know, industrials and materials because that's been beat
up so hard. Even though the economy is slowing down, you know.
I I think that that's you know, a really good specter going forward,
especially you know, as there there's hedges against the inflation. I think,
you know, the industrials, materials that they're going to benefit from it.
Okay, so so and then the of course, uh we would remiss,
we didn't talk about so inflation is already cooked into the system. Everything you
buy has gotten more expensive, especially things you need like food and energy.
While that's down a little bit, but we'll see how long that led us
for. Hey, inflation, is it behind us? Is the worst behind?
Or are we going to have another resurgence because it's a twenty year cycle?
Yeah? Yeah, I mean we're it's uh, we're just just barely
ahead of the curve right now, and it is it's going to come surging
back. I mean you can't, even though the FEDS have that core target
of two percent I mean, which is literally arbitrary. I mean it really
is. But when you add as many government jobs as we did and we
continue to overspend, I mean, a republican democratic doesn't matter all overspending,
right, and then we add in all the unfunded liabilities that we have,
from social security to medicare, defense spending, and just you know, covering
the interest on the national debt. You know, that's all inflationary. And
we combine the national debt thirty four plus trillion and the unfunded liabilities which are
estimated to be somewhere between one hundred and eighty and one hundred and ninety trillion
on top of it, there's Yeah, that's inflationary. I mean, there's
at some point in time, whether it's this year or next year, I
mean, it's it's going to come home to roost. And that's what makes
me nervous. This is why I say all the time I'm cautiously optimistic.
And you know, we've got a very narrow window between now and in the
end of the year through the election. Yeah, do you think they're going
to take my social security away from me? Here? At you know what,
I don't know if it's going to be there. When when you look
at the aging population, the amount of the workforce that is not actually engaged
in working, you know, there there's not enough people funding the boomers that
are retiring, So there's there's going to be a change. I don't know
what that is. I don't know. I mean We've all heard the rumors
right that they're going to have that cut benefits by twenty to thirty five percent.
They're going to continue to increase that full retirement age up into the seventies.
You know, I don't know what's going to happen, but you know,
at the current rate, you know, it's just it's it's broken,
and you know, I don't know how long it's going to last, all
right, so I should enjoy it. Well, I got it. Huh,
Yeah, that's right. Here's a question for you. Like or narrow?
You're better off taking it till you waiting until it hits need the tape,
right, because then you get your maximum benefit. But dearly is this
something that we want to perhaps speed up? Yeah? You know, when
when we're building plans for people, you know, we're looking at it two
ways. You know, the math, you know wins what what does it
tell us the best time to take it? You know, is it you
know, sixty seven, sixty eight, seventy, I mean, is it
is at early at age sixty two? Right? Everyone's situation is a little
bit different now. Having said that, I am my personal belief, I
don't think that if they hate cuts that they're going to cut the benefits.
I hate saying the word benefit because it's our money, but cut the most
benefits of the recipients that are computing. What's that I said, they'll cut
the outlays, right, Well, that's exactly it. So like to your
point at right that just you back, that's all it is. And so
it may make sense to actually take that money a little bit early so that
that way, yes, you may have a reduction, but at least you're
going to get it and you're locked in and it could wind up being more
than than what the outcome is. Yeah, mine is I've got like survivor
benefits, so that pays me about half of my eventual payment will be after
seventy. So do I get ready now to take it all now? But
should give me probably I don't know, fifteen hundred a month more or or
maybe a thousand a month more it took it all now, or do I
wait till the three years from now and I'm seventy and then get it.
You know, it's a question I've been having difficult since with well, you
know what, and that's a great question in the fact that you're being thinking
about it is really important because most people don't think about it that way,
and it really you know, is it going to be there? Yeah,
we've heard estimates from twenty thirty nine to twenty thirty five to you know,
twenty twenty six. Who really knows, because it's really there's nothing there.
It's you know, it's a flow through, you know, the Social Security
that's taken out of our taxes every pay period. That's what's going to fund
the retirees. So if we don't have enough people working to fund that,
you know that there lies the problem. And and where is that that break
even point or the breaking point if you will, for that to happen.
So breaking point I'm more concerned about than the break even point. Yeah,
well yeah, absolutely so, you know, because it's a question also if
they'd all do anything about it, then inflation is going to need it away
anyway. Right, Well, yeah, you're exactly right. You know this
fallacy we I've been hearing it all day on the news, the experts saying,
well, you know, inflation, you know, inflation is going down.
Inflation is going down. It's not going down, it's the rate of
growth of inflation that's decreasing. I mean prices are still going up, and
so you know, it's that like you said, you know, even though
they're adding that that cost of living adjustment and everything else. I mean,
you know, inflation. It's it's it's that silent tax, the island killer,
if you will, against your wealth. It just keeps eroding it a
little by little, not by month. Yeah, and sometimes not so little,
right, yeah, sometimes not so little, because it does. I
mean, you know, you've got different inflationary factors, just the standard of
living, like you said, you know, those luxuries like food, shelter,
clothing, Okay, and then you add into it healthcare or you know,
if your kids are in college. You know, the the inflation rates,
the growth rate and cost on healthcare and prescriptions and and education is astronomical.
You know, the the economic inflation rate pales comparison to you know,
those industries. So it does it it is, it's a wealth killer.
You know, that's amazing looking at my social security state that I'm in,
leading in me and my employer and basically that was my employer. I put
it in write sixty thousand dollars and you know, it's going to take a
long time for me just to break these on the deal and my parents on
the other hand, you know, people ten to fifteen years older than me.
Man, they really cleaned up on this thing. I'll be happy just
to break eat it. You know, you're exactly right. I mean when
it was originally designed, you know, life expectancy was I mean, so
sixty five was the original you know, full retirement age and life expectancy was
below seventy you know, sixty seven, sixty eight, sixty nine. And
now people are living well into their mid to late nineties. And I and
I think I would not surprise me, wouldn't shock me at all if you
start seeing them, you know, continue to increase the eligibility age and the
full retirement age, you know, to get close to that that same point
again because now I think life expectancy carry for you and me. They just
saw it again and it's below eighty again. I think it's like seventy nine
or something like that for exactly that's see, so we have to be you
know this, I'm just gonna just clarify what you're saying. Yep, if
you make it to sixty, then you're probably gonna make it to eighty three.
If you make it to sixty five, then you're probably going to make
it to your mid to high eighties. And if you make it to sixty
seven, you'll probably make it to like eighty eight or eighty nine. Those
numbers aren't et sact but that comes from the actuarial tables. But the action
of your life back don't see American mail is under it's like seventy seven,
I think, right, Oh, is it that low? Okay, I
just knew the average overall was below eighty. I didn't realize it was seventy.
So I didn't realize it was that low. And we're in that right
with you know, healthcare, the modern medicine and everything else. You know,
our clients are aging population, they are living longer and longer, and
so you know, we're having to plan out these plans until they're mid and
upper nineties. Just based on the stats that you just talked about. So
I just looked it up. American life expectancy that without regard to sex tender
is seventy nine point eleven years, which actually increased from twenty twenty one when
it was just under seventy nine. But you know, at one point it
was definitely higher. But you know point is you have to be very concerned
that the median life expectancy is eighty one point four and the women female was
four point eight, which was down from well twenty twenty three went up a
little bit. You have to look at you can google live better than me.
And the point is there's different numbers, yes, but point is you
could last a long time. And if you're holding out hoping your social security
is going to get you through it, just figure if it makes your house
and car payment and buys your groceries and your utilities, you'll be doing really
well. Yeah, you know, and I mean just food, shelter,
clothing, basic necessities. And you know, at the continued growth rate of
inflation, you know that's that's going to be tough, especially when you add
in you know, increasing taxes. I mean we're seeing that here in Ohio.
You know all the the additional you know, assessments on property values and
you know, school district taxes and everything else. And in even if your
home is free and clear, it's becoming very difficult to afford to live in
the house that you raise your families in. You know, for a lot
of retirees that are all fixed income, which is why I'm creating a new
newsletter and if you're subscribe to my existing one, you'll automatically get it.
It's called the in slate. That's called Inflation Cafe where dollars go to die.
Oh I like that, Pat, Yeah, yeah, so pint is
this is serious stuff here. I didn't no, house serious. It is.
Still you wind up retiring and then you don't have enough and then you're
a greeter at ol Mart. Except the greater job is probably going to be
replaced by a robot soon, right, boy, you know what, I
didn't even think about it like that. You're exactly right, Yeah, you
know. I mean because it it the front end capital for that robot is
going to be way more expensive than long term. You know, it's going
to be cheaper. You know, they're never going to get sick. They
don't need vacation, no benefits. They just need a service to contract.
Right, That's that's it. That's it. Yep. Yeah, Well,
interesting times ahead for sure. Just tell us where we find you. How
do we connect with you on the web. Yeah, you can find us
at e g SI Financial dot com. That is the best way to find
us and get a hold of us anytime. You need us all right,
and the link to that is in the show notes this interview on Financial Survival
Network dot com. Make sure you go there, sign up for your free
newsletter ED always a pleasure, and we will be talking to you again real
soon. Absolutely my pleasure. Thanks for having me back, thanks for listening
to carry Lets this Financial survival Network your solution to today's trying times. For
the latest, go to Financial Survivalnetwork dot com. Financial Survival Network now more
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