What does your dream retirement look like? What will make you happy? What are you working to achieve? Your goals don’t have to sound good to other people. They’re your goals. They’re based on your dreams. To reach your dream retirement, you have to figure out what you want and set specific goals to get there.

You also can’t let emotions rule your decision-making. In this episode of the Retirement Made Easy podcast, I’ll share some insights from Vanguard and LPL financial’s 2023 market reports. But no matter what these reports tell you, you have to follow the long-term plan you’ve created to reach the retirement of your dreams.

You will want to hear this episode if you are interested in…

  • [0:33] What does your dream retirement look like? 
  • [6:48] 2023: Starting with layoffs and unemployment 
  • [10:48] Vanguard believes a recession is coming
  • [13:51] Short-term emotions negatively impact long-term results 

2023: Starting with layoffs and unemployment

There were a lot of layoffs this month (January 2023) and they will likely continue throughout 2023. Google, Microsoft, and 3M had significant layoffs. 

Mike Row interviewed the economist, Nicholas Eberhart, about the job situation and unemployment pre-pandemic and post-pandemic. Right now, there are 7 million men ages 25–54 who are not working or looking for work. They’re not included in unemployment figures. We’ve never seen anything like this.

We have 4 million more open jobs versus pre-pandemic and 4 million fewer people in the workforce. As of November 2022, there were 10.5 million jobs available. We can’t look at unemployment numbers accurately because we have so many people who aren’t even looking for work. 

Vanguard believes a recession is coming

In Vanguard’s market outlook, they’ve stated they believe there’s a 90% probability that the United States will enter a recession this year. Recessions slow down the economy. Companies’ sales and revenue are down and they have to lay people off. However, I don’t think we will see the normal amount of layoffs you’d see in a recession, like what happened in the 2008 financial crisis. Many companies have lean workforces as it is. Vanguard is expecting unemployment to rise to 4.5–5% by the end of the year. They’re expecting inflation to be 3% year over year. 

Vanguard also expects US stocks to realize 4.7% to 6% of growth for the next 10 years, below a typical 10-year average. Their analysts are not optimistic about 2023 or the next 10 years. However, LPL Financial’s market outlook is more optimistic and far more detailed. They put a lot of time, money, and resources into their market outlook. Go to my website to get a free copy. 

Short-term emotions negatively impact long-term results 

In 2022, as the market began a downward trend, people began to abandon their long-term plans for something that felt better. They sold out of long-term investments to avoid a bumpy ride. It probably gave them temporary peace of mind. But I’ve seen this happen over and over again: People who pull their money out of the market let years go back and never get back in. The market rebounds with them sitting on the sidelines because they got scared.

I spoke with someone last year who gave in to impatience and paid $75,000 over what a home was appraised for. One year later, they know they made a mistake and they’re not happy. I spoke with someone else who was convinced Amazon was going to take over the world. He put 90% of his retirement savings in Amazon stock. Guess what happened? Amazon’s stock was down 50%. 90% of his retirement nest egg was cut in half. He knew better (and wasn’t one of my clients). 

The reason we make these mistakes? We let emotions get in the driver’s seat because we throw logic out the window. The bottom line? Don’t let temporary emotions derail long-term goals. You are where you are now because of past decisions. 

If you’re doubting yourself and losing confidence, you’re not alone. Update your financial plan. Make slight adjustments. You don’t have to make drastic changes to see improvements. And if you want a second opinion on your plan, connect with me. 


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