Inflation and Your LGBTQ+ Retirement: Why the Stakes Are Higher

TPIR Ep 95 Full Show.mp3: Audio automatically transcribed by Sonix

TPIR Ep 95 Full Show.mp3: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Speaker1:
Any examples used are for illustrative purposes only, and do not take into account your particular investment objectives, financial situation or needs and may not be suitable for all investors. It is not intended to predict the performance of any specific investment, and is not a solicitation or recommendation of any investment strategy.

Speaker2:
Welcome to Take Pride in Retirement, the podcast dedicated to helping members of the LGBTQ+ community protect and grow their hard earned money. Get set for a show full of education and insights with your host and advisor, Matt McClure. We recognize every family is unique. The goal of the show is to help you achieve financial freedom so you and your loved ones can have the retirement you've always dreamed of, a retirement you can take pride in, no matter who you are, where you're from, or who you love. So now let's start the show. Here's Matt McClure.

Speaker1:
Hello there, and welcome to another episode of Take Pride in Retirement. Matt McClure here with you, your host, your advisor, your friend, your pal and your confidant. Really appreciate it. As always, you spending time with little old me, um, it really does mean a whole, whole lot. So I thank you for doing it, for taking the time out. Whether you're watching on YouTube, hello, YouTube land, or if you're listening to the podcast hello, Podcast land. Um, I really do, uh, just value you so much because I know how much you value your time, how much that means to you. And so the fact that you take time out to listen or watch, it's amazing. So thank you, thank you, thank you. Today on the show inflation we're going to talk about and LGBTQ+ retirement as always we're going to tie those two things together and why the stakes really can be higher for LGBTQ+ folks when we talk about inflation. Now over the last few years we've learned a little something or two about inflation, right? I think, and it's still sticking around. It doesn't show signs of letting up really anytime soon. We'll talk about kind of why that is. We'll talk about how it can affect us, all of the things. And a big reminder to schedule an 100% free as in complimentary as in you don't gotta pay for it. Consultation with me. If you would like me to go through your particular situation with a fine tooth comb, I can do that on, you know, do the consultation on zoom.

Speaker1:
We can do it in person. If you happen to be in the metro Atlanta area, I would love to meet with you in person. And so we'll, you know, schedule that you can go to take pride in retirement comm to do so take pride in retirement comm. Click on get your plan there. Go to take Pride in retirement plan if you want as well. I would appreciate it if you would do that. And also you can just give me a call if you would prefer that method of communication. It's that little rectangular thing in your pocket that you're always staring at. Instagram on 855246 9211 (855) 246-9211 is that number. And you know okay. So today you know we're talking about inflation. We'll talk about it a lot. We'll also talk about how to recession proof your retirement in just a little bit. I've actually got a report from one of my colleagues. His name is Jim. He's going to present a report for us in just a little bit. We kind of call them behind the scenes. We call them vignettes. You can call them reports, you can call them vignettes, you can call them whatever. But we're going to start featuring those a bit more here on the show. Because, you know, my voice isn't the only one you want to hear after all.

Speaker1:
And so Jim's going to tell us about some different ways and different things to think about when you want to recession proof your retirement. So we'll talk about that in just a little bit. Um, but here's the thing. Inflation is the big focus of today. And it doesn't always dominate the headlines especially now. Right? I mean, inflation is still around. It didn't just magically disappear after, you know, 2022 or whatever, when inflation was up over 9% year over year for a while. But it's not as high as it was, obviously, but it's still around. Prices are still rising. They are still going up. They are not going down. And so what happens when inflation kind of sinks into the background, I guess, is that it can still just sort of quietly be there reshaping your retirement outcome, what that's going to look like and what that's going to feel like. Right. Because yes, as I said, it still exists. It has not gone away. It is not extinct. And for a lot of people in the LGBTQ plus community, you know, we may not have children to lean on. I know that's the case for myself and my husband. We may rely more on our chosen family, very common in the LGBTQ plus community. We may have faced, you know, career interruptions. As I as I often talk about discrimination, I've, you know, Familiar with those two things that affected lifetime earnings.

Speaker1:
Marriage equality, of course, only became nationwide in 2015, and that matters for benefit history in a lot of cases, too. And so when inflation rises, you've got the margin of error that shrinks even more. And so, you know, you may not have as an LGBTQ+ person as much margin for error as some other members of other communities in this world. So we don't want that to be shrinking even more, right? And so why inflation still matters. As I said, you know, it hasn't gone anywhere. Inflation still running around 3.1% year over year, according to the Bureau of Labor Statistics. The fed is maintaining relatively higher interest rates. They have brought them down sort of gradually over the last year or so, but they're still kind of relatively higher. I mean, we were down at near zero, you know, of the in the benchmark interest rate that the fed sets. Uh, we were down near zero before, uh, before Covid, you know, I mean, and so then when you had inflation rear its ugly head, what does the fed do? Well, the fed wants to control inflation. They don't want it to go crazy. So they raise interest rates which then hopefully brings down rising costs. It's all you know you talk about supply and demand. Um demand was really high. Supply was really low.

Speaker1:
And so rather than increasing that supply, the fed tried to cut down on demand by sort of raising those interest rates. So it made accessing capital a bit harder. So then, you know, people would maybe that would sort of have an effect on the demand side of things in other words. So inflation and inflation, that's what I'm going to call it from now on. It's just flation. It's not inflation. No. Uh, inflation cooled from 2022 highs. It has it has dropped off definitely. Uh but they've still not gone back those inflation rates to 2019 levels, and they rarely do, uh, see price drops. I mean, that would be deflation. That's not necessarily a good thing either. But here's the thing. I mean, inflation doesn't have to be dramatic to be damaging, right? It doesn't have to be that huge. More than 9% number that we saw in 2022. It it doesn't have to be that huge in a year over year basis. What it has to be is, you know just give it time, right? It just needs time. Inflation doesn't have to be huge. It just needs time to damage your retirement, to damage your investments and to damage what your retirement could look like. And so, you know, a lot of LGBTQ+ retirees, statistically speaking, have lower average retirement savings. We've seen that. I've seen that in my in my own, uh, practice. Really.

Speaker1:
That's slowly but surely changing, thankfully, but still true. A lot of LGBTQ+ folks are more likely to be single in retirement. That's not really changing, but it is something that I have seen very much so in my own day to day life as a financial advisor. That's that's just, you know, my experience as well, not my personal experience. But you know what I'm saying? My particular experience working with clients, a lot of LGBTQ, plus folks who are retired face higher utilization of healthcare. Right. Because you may have, you know, if you don't have the family to fall back on, like the kids and stuff to take care of you and all that, you may need long term care. And so, yeah, that's a healthcare expense that's not covered by Medicare, by the way. And you have to pay for that out of pocket. So yeah, you're utilizing the healthcare system more and more often because you don't have as much of a support system around you. And trans retirees especially face difficulties in places and in areas like higher prescription costs, insurance limitations as well. Certain things may be covered, other things may not be. And if you're single, there is no second income to absorb rising costs. And God forbid, you know, if something were to happen, if you're still working, you know, to your job or whatever, there's no second income. And then, you know, once you're drawing down on your retirement savings, you want to make sure you've got enough guarantees in that retirement plan so that you don't need a backup.

Speaker1:
Right. Your plan already is the backup, in other words. So plan properly. And, you know, proper prior planning prevents pitifully poor performance. It's the five P's. Um, but, you know, inflation is harder, though, when there is no plan that is all encompassing, when there is no plan that doesn't include that backstop. Right. And so I sort of hesitate to use backup plan because it's all got to be part of the overall plan. The backup has is going to be in the overall plan. But yeah, I mean inflation is harder when there's no backup at all. And so it may not always be loud inflation, but it is always persistent. Um, there have been very few times where prices have actually gone down. And so if you would like to do a stress test on your retirement plan, give me a call. Especially, you know, today's economic environment, there's so much uncertainty in the world in general. There's a lot of uncertainty in the economy because of the uncertainty in the world and just all of the things that are happening, which I don't don't have to say. Uh, but, you know, and, uh, you know, if you follow, uh, the news and anything that's going on, you know, about all the kind of wackiness that happens.

Speaker1:
And so in today's economic environment, you need to have some assurances. You need to have a plan that is going to stand the test of time. It's going to last no matter what happens in the overall economy, because you're controlling the things that you can control, right? So go to the website, take pride in retirement and go to take pride in retirement. Get that free consultation scheduled. You can also give me a call 855246 9211 (855) 246-9211. I'd really appreciate that. Call or visit the website and get that complimentary consultation going for you, and find out how your retirement plan would look in times of greater inflation, and see how much growth you're getting or projected to get, and see how much you could get with the plan that I recommend for you. All right. After I take that deep dive into your financial situation. Okay, so why do LGBTQ+ retirees especially find themselves sort of more exposed to inflation? Well, you know, workers let's say can sometimes as we just sort of set the baseline here for this part, workers can sometimes negotiate raises. Right. You can switch jobs, you can increase hours, but that's if you're working and all those things are not even guaranteed. But you at least have those options, perhaps. But retirees depend on Social Security. They depend on portfolio withdrawals and depend on maybe, if you're lucky enough, a pension, hopefully a personal pension.

Speaker1:
If you don't have an actual pension, that's something that I can walk you through. By the way, when I do that deep dive into your finances, tell you how that kind of works. And yeah, it is possible to set up your own pension with the funds that you already have saved up or invested. Um, but just some sort of statistics here, some federal government statistics, about 34% of retirees spending goes to housing, about 13% goes to healthcare. And that's a that's a big chunk. And I mean, that's a chunk that gets larger the older that you get because the older you get, you need more health care. So 13% go way on up. And so health care inflation is something that you really have to be concerned about because it often exceeds the overall CPI. That's the consumer price index which is the main sort of barometer of inflation, the main sort of indicator of inflation that's released by the government periodically. And so if you are an LGBTQ plus person as well, you and you're an older adult, you also have some specific considerations to take into, well, consideration. Um, you've lived through decades without marriage protections. You know, you weren't able to get married maybe until 2015 or later. You missed spousal Social Security planning opportunities. Maybe because of that, you know, you may lack legal protections without proper estate documents in certain cases.

Speaker1:
And if you are partnered and not married. It adds that wrinkle in as well. Because you don't have those legal protections in place, your partner may not actually automatically inherit your assets. Chosen family may not have default authority. And so that's a whole I've talked about wasn't all that long ago on a previous episode. If you want to go back and listen to it or watch it about the, you know, about estate planning and all of that. And those are some there's some really specific considerations for LGBTQ+ folks, especially when it comes to estate planning. And you don't want things to go through probate. You don't want it to wind up in probate. You want your wishes to be carried out. And so you want to make sure that things are set forth in a will. You want to make sure that if a trust is appropriate for you, you've got that set up we can connect you with getting that done. If that is the case for you, you want to make sure that your beneficiaries are up to date, all of that kind of thing because you don't want it to be left up to chance. Right. And here's the thing too. Inflation itself, when we talk about, you know, just the rising costs of everything and and you know, people always talk about egg prices, you know, going up and sort of the, the tracker of the inflation that people have been using over the past several years for some reason, I guess, because they, you know, the prices went up so quickly because of not only Covid and supply chain issues, but avian flu and all that stuff back in the day.

Speaker1:
But inflation, though, it's not just about math, it's about autonomy. It's about making sure that you are controlling what you can and making sure that you can live the life that you want to live. No matter what happens in the overall economy, in society and whatever. So that is the biggest thing that I want to leave with you for this episode. Not that I'm going to leave just yet because we got a few more minutes, but, um, I want you to take away from this episode is that you can control the things that you can. Obviously, you can't control inflation, right? You know, no one person can as far as, like, you know, you or I like in just a civilian individual can't really control overall inflation. It's just it's a bigger thing than us. But what we can do is plan for it. What we can do is build a plan that controls for it. We can control that plan. Right? And the one that's going to last no matter what. So if you want to make sure that your income plan is going to reflect your real life situation, no matter what happens with inflation, and it's not just some kind of template that some, you know, advisor, maybe one of the big, um, advisory houses, um, the the big names or whatever.

Speaker1:
They filled out a form. And here's this template for all of the plans that they put together, and they just put you in their template. That's not a customized plan. That is not something that is done in a fiduciary capacity. Right? That that is just oh, we're checking off a box. And here's a generic financial plan for you. I act in a fiduciary capacity at all times when I work one on one with you. And that means that I work in your best interests. I have to, I want to, but more importantly. But I have to especially. And so if you want to make sure that your plan actually is a plan that's made for you and is not just your name and information filled in on some template somewhere, then go to the website. Take pride in retirement. Take pride in retirement. Work with someone who understands you, understands the needs of the LGBTQ+ community. Um, you know, work with, uh, work with an advisor that gets you and has worked with people in similar situations over the years as well. So a bit of an inflation demonstration here. Now when we talk about some real life costs, we're bringing it home.

Speaker1:
We're bringing it down to earth, uh, as it were. Um, inflation really affects so many things in the overall economy. And you can, you know, you can look at any of the numbers and say, oh, well, you know, this particular sector is rising faster than this one. Like, health care costs are usually rising faster than anything else, unfortunately. Um, and then, you know, grocery prices still going up faster than the price of overall retail goods and that kind of a thing, right? You got different sectors that you have to worry about. But when we and when it gets right down to it, what matters the most is what you feel in your pocketbook, right? It does it all of the wonky sort of, uh, I guess to sort of quote my past life business reporter talk Doesn't mean much. What means the most is what you feel in your pocketbook, in your wallet. And so when you look at the numbers, obviously grocery prices are up meaningfully since the pandemic. You feel that each and every time that you go to the grocery store. I'm sure utilities have been very volatile. I mean, we've got these huge, um, you know, data centers and stuff that are just draining a lot of the electricity that's being generated and that's been driving up a lot of utility bills. You know, water bills as well, because a lot of those plants and things take a lot of water to operate.

Speaker1:
Insurance premiums have been climbing. We've got bigger natural disasters especially. I don't know if you've, uh, if you're if you're in Florida or if you know people who live there that, um, their property casualty insurance rates have just been going up and up and up because of all of the natural disasters and the hurricanes and the. This, that and the other in in Florida over the years that's been widely reported. And so those insurance premiums tend to be climbing. Home maintenance costs have gotten higher, you know, especially we saw early on in the pandemic, um, and, you know, within the first year or so of the pandemic that the supply chains just basically stopped essentially for, for a while. Um, and then slowly but surely picked back up. But a lot of the inflation that we saw because of supply chain issues kind of stuck around, you know, people weren't just nice and said, oh, well, now that things are back on track, we're going to lower our prices back to what they were in 2019. That did not really happen. And so those home maintenance costs have gotten more expensive as a result of all of those things. And they've stayed there. By and large, travel has become more expensive as well. Used to be. I remember back in, back in the day, back.

Speaker3:
In, back in my day.

Speaker1:
You could, um, go and get a ticket on particular lower cost airlines, perhaps, uh, for, like, you know, between Atlanta and New York, where I took that route a bunch. You can get a ticket for, like, 99 bucks with, you know, two checked bags and, uh, you know, all that stuff. You selected your seat and all that was included. Um, and then you could upgrade to business class for, like, 40 bucks when you checked in. Um, those days are gone. And so that that, um, it would it sounds like just a pipe dream at this point. Uh, but travel has gotten more expensive. It just has. So inflation is not just a one time thing. It doesn't show up at your door, knock on it and say, hey, I'm inflation. Everything's going to cost more now by it shows up at your door. Anytime you pay a bill, anytime you go to the grocery store, anytime you, you know, it's riding with you in the car or, you know, whatever public transit or something on the way to the grocery store and back. It is with you at all times. And so that is something to keep in mind because, you know, you have to just make sure that as part of your overall thought process, you take inflation into consideration, especially when it comes to planning for your future. So like let's say you're $150, grocery bill became 185 or $200 even, let's say, um, if it if it became, um, just 185, we'll go with the lower end of this spectrum here, $150 grocery trip, if that goes up to 185, that's 35 bucks a week.

Speaker1:
So you go get groceries every week, 35 bucks a week. That doesn't sound like all that much when you say, oh, it's 35 bucks, but that is $1,820 per year. And then if you were to compound that out over 20 years, that's a bunch of money. So I mean, it's it's money that could be going into your retirement savings, retirement investments, your, you know, paying future you. But no, it's paying the grocery bill instead. Now imagine, you know, not only that but prescription drug price increases, insurance premium hikes, property tax adjustments, all of the things that contribute to your overall personal inflation rate, right. That may be different for your neighbor or whatever, but all those other things that contribute to your own personal inflation, that is just a recipe for a recipe for disaster, but a recipe for a lot of discomfort in your retirement years, and you won't be able to necessarily have the right retirement that you wanted to have because of just simply inflation and things costing more. And then, you know, the cost of living outpacing the cost of the, you know, wage increases and that sort of thing. As you're planning for retirement, as things have been over the years. And so, you know, if you're LGBTQ plus as well, you've got to shoulder that an increased burden for yourself because you don't have anybody else to, you know, bringing in income to help you out with that inflation.

Speaker1:
Like, you know, that's it's all on you. In other words, your chosen family. Um, if there's caregiving that has to happen there that may not be reimbursed. Um, you know, it just may not be. And so that's something to consider and think about. Long term care planning is absolutely essential, especially if you're single in your retirement. As an LGBTQ+ person, I think it's essential for pretty much everybody, but especially in that situation. So call me and and go to the website, take pride in retirement comm and we'll get that going for you. Get you a long term care plan. Um, and so a quick tip here as we get a little bit closer to the end of this particular episode, take about three things and kind of just keep track of them for a few months and see what you're on. Kind of I mentioned personal inflation rate a minute ago. Track your own personal inflation rate here. And so track your groceries, track your insurance and track your healthcare spending each month just for like let's say three months if you want to continue doing it, because it might actually give you a little bit of at least insight, if not some sort of, I don't know, reduction of anxiety, I guess. Um, but track those each and every month and you can see because I feel like just knowledge obviously is power.

Speaker1:
And that's really a big thing of what the show is about, first of all. But applied knowledge really is power. So take that information and apply to your each and everyday life. Maybe some adjustments to your spending. Do I need to actually buy X, Y or Z at the grocery store? Or could I buy something else that might be a cheaper alternative? Like, you know, make some small adjustments? Is this insurance plan actually right? For me, this particular policy that I have, is it 100% right for me? Like if you know exactly what is happening, you're tracking it and then you can make a change. That's that Michael Jackson song. Man in the mirror, right? Look at the man in the mirror calling, asking him to make a change. Um, but yeah, you know, inflation, it doesn't hit all at once. It compounds quietly. It can do that in the background, especially in times right now where it's not necessarily big in the headlines. So if you want a retirement income strategy built specifically with you in mind as an LGBTQ+ person ally. Whatever your situation might be, no matter who you are or where you come from, who you love, how you identify, how much money you have no matter what. If you want a plan built for you, go to the website. Take pride in retirement. Take pride in retirement plan or call 85524692178552469211.

Speaker4:
With news headlines about recessions flipping from imminent to unlikely almost weekly, a lot of individuals are left wondering, how do I prepare my money for whatever 2026 throws at us? I'm Jim Tarabocchia, here for the Retirement Radio Network powered by AmeriLife. Recession talk is back for 2026. Not screaming from every headline, but lingering in the background with odds that aren't zero. And honestly, that's okay. The good news you don't need a crystal ball. You just need to be prepared. Her Money.com CEO, Jean Chatzky, outlines the signs to watch for when a recession is looming.

Speaker5:
Keep an eye on unemployment. We'll look at consumer spending. Consumers often lose confidence. The tricky part about a recession is that we could be in one already and not know it.

Speaker4:
Financial experts say the first step to being prepared is surprisingly simple get clear on what you actually need, not what fear is telling you. Start by building or topping off an emergency fund that covers 3 to 6 months of living expenses. Perhaps consider a high yield savings or money market account so your safety net is actually growing. Next, pick a budgeting system you'll stick with, whether that's the old school envelope method, a spreadsheet, or even an app. And finally, how to configure your financial portfolio and investment strategy in uncertain times. Cnn's senior business writer Jean Shehadeh explains, a key component.

Speaker6:
You want to be really diversified in your portfolio, meaning between stocks and bonds, between sectors of the economy. You can't predict what's going to do well and what's not going to do well. A diversified portfolio where you have some stocks, some bonds, they will perform differently.

Speaker4:
Whether it's covering the basics, making easy cuts, redirecting that money to high interest debt. The people who come through economic uncertainty best aren't the ones who panic. They're the ones who planned calmly. Live a little below their means and keep investing anyway. A well-built budget doesn't just protect you from a recession, it gives you freedom no matter what the economy might do. Small steps now. Big piece of mind later for the retirement radio network powered by AmeriLife. I'm Jim Tarabocchia.

Speaker1:
Alrighty. Well thank you Jim I appreciate that. Great great information there. And I look forward to hearing more from Jim in future episodes of the show. All right, folks, so we're going to talk more about inflation, price increases, how to deal with them coming up on the next episode of the show. We're doing two of these a week now, so I get to tease what's coming up in episode two for the week and coming up in episode two for this week, social Security cola realities. Not the kind of cola that you drink, the kind that adjusts for your cost of living increases each year. That's the cost of living adjustment for Social Security. We'll talk about that. Inflation hedging tools will bring it all home. We'll talk about how to hedge against inflation and maybe talk about ways that you can actually plan for it, even though you don't know what inflation is going to be in the future. Make sure you have that built into your plan now and then we're going to talk about protecting your purchasing power over decades. That can be quite a challenge. And then I've got an interview with someone who is going to offer a lot of insights about PBMs, which are pharmacy benefit managers. These are sort of the middlemen kind of people who set the prices of drugs. Why are drug prices increasing? What can we do about it? What can you learn, uh, about why things are happening and how you can have an impact on that in the future? We'll talk about that coming up on the next episode as well. So that is it for this episode, though. And until next time, take pride in yourselves. Take care of each other. We'll see you then.

Speaker2:
Thanks for listening to Take Pride in Retirement. Members of the LGBTQ+ community deserve to work with a fiduciary financial advisor who puts their needs first. To schedule a free, no obligation consultation with Matt McClure and the team at Active Wealth Management, call (855) 246-9211 or go online to take pride in retirement. Com investment advisory services offered through Brookstone Capital Management LLC, a registered investment advisor. Bcm and Active Wealth Management Incorporated are independent of each other. Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents.

Speaker1:
Registered investment advisors and investment advisor representatives act as fiduciaries for all of our investment management clients. We have an obligation to act in the best interest of our clients and to make full disclosures of any conflicts of interest. Please refer to our firm brochure, the advertised item for for additional information.

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