What To Sell Before Retirement – YouTube’s Most Watched Retirement Video

On This Episode

Over the past year, one retirement video on YouTube pulled in 3.7 million views. The title: “Sell These 5 Things Before You Retire.” We thought it was worth a conversation — not to tear it apart, but to react honestly. Do we agree? How often do we actually see this play out with real clients? Let’s get into it.

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Disclaimer: PFG Private Wealth Management, LLC is an SEC Registered Investment Advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. The topics and information discussed during this podcast are not intended to provide tax or legal advice. Investments involve risk, and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed on this podcast. Past performance is not indicative of future performance. Insurance products and services are offered and sold through individually licensed and appointed insurance agents.

 

Marc:

Do a little reaction conversation this week here on the podcast. Over the past year, one retirement video on YouTube pulled in 3.7 million views. The title was Sell These Five Things Before You Retire, so we thought it was worth a conversation, not necessarily to tear it apart, but just to react to it honestly. Do we agree? Do we not? Let’s dive in this week here on Retirement Planning Redefined with John and Nick.

 

Welcome in once again to the podcast. This is Retirement Planning Redefined with John and Nick from PFG Private Wealth. Find them online at pfgprivatewealth.com, that’s pfgprivatewealth.com, and we’re going to talk about this video this week, guys. I want to kind of break down these couple of sections here. Now, we can throw a link into the descriptions for folks if they want to go check it out, but this video, as I said in the teaser, got just under four million views last year for the five things you should sell before you retire. I wanted to get your guys’ take on this. First of all, how are you doing this week, John?

 

John:

I’m doing good. I’m doing good. I was telling Nick earlier, I started trying to give my kids something to do this summer, and I have them working out, because they want to get better at gymnastics, so I put together a program and told them it was time they learn a language. We started doing some Portuguese, so it’s interesting listening to them try to pronunciate the words, but it’s been fun.

 

Marc:

Nice. Nice. That’s very cool. Very good. Good job parenting there, sir. Absolutely. What about you, Nick, buddy? You doing all right this week?

 

Nick:

Yeah. Yeah. I have visitors in from out of town for a bit, so that’s always fun, but they’re easy. We’ve been having a good time enjoying the new house.

 

Marc:

Well, you’re a good guy in that regard. You were saying it’s going to be a bit that they’re staying. See, I was brought up with the rule and I live by the rule of, house guests and fish, same timeline, three days. After three days, they’ve got to go.

 

John:

Nick is having home-cooked meals I think daily, and I think they’re just helping out around the house, so he’s probably very comfortable right now.

 

Marc:

Okay. Nice. Nice.

 

Nick:

Yeah. There is a net gain in the scheme of things for me.

 

Marc:

Okay. All right. Fair enough.

 

Nick:

Yeah.

 

Marc:

That adds to the equation, right?

 

Nick:

It definitely helps. It definitely helps.

 

Marc:

Look, you’re always planning, right? You’re always doing the math on the situation, right? Well, let’s talk about this video this week. 3.7 million views on this, so let’s start with the first one. I’m going to get your guys’ reaction to it. The oversized house. The house that was perfect for raising a family isn’t always the right house for retirement. Certainly, this one’s kind of understandable. Selling it can free up some significant equity, especially in today’s market, depending on where you’re at, right, so what’s your thoughts on this being one of the five things you should sell before you retire? Whoever wants to start.

 

John:

I can jump in on this. I think, like we say with everything, it depends, but this could be, depending on the outflows of the house, the maintenance, property taxes, insurance, just how big it is, one of those spots where it could make sense, if you’re ready, just to kind of start eliminating some of your to-do lists and outgoing cashflow and stuff like that, where this is definitely a spot where we see a lot of people say, “Hey, is it time to downsize, and what does that look like for me? If I downsize, what else can I do with the extra cash flow I now have? Maybe I pocket a lump sum balance, that I could do something else with it.”

 

Marc:

Yeah. I mean, especially again, depending on where you’re at, you could make some good cheddar on that, right? Unless you were going to buy another house, Nick, right? Because then it might cost you more.

 

Nick:

Yeah. Yeah, it’s tricky too, because for example, right now Florida’s in the news quite a bit from the perspective of property tax and potential property tax reform, but one thing that does happen here is a homestead exemption, and property taxes can only go up by a certain percentage each year. We will see instances of somebody maybe looking to downsize the house locally and maybe move out of state, so there are opportunities to essentially kind of carry over. There’s some portability in the state of Florida on property taxes, but if you shift to another state, that isn’t necessarily the case, and if somebody, especially the way that taxes have, or, I’m sorry, values on homes have gone up here in the area, if you’ve been in your house for 15, 20 years locally and are looking to sell and shift elsewhere and maybe go to a state that has a state income tax, and then you start to factor in … If you’re selling your home for … There’s something to downsizing size, but what we also have found is that people that are, if they’re selling their house for 800,000 to a million dollars, they don’t want to buy a 200,000 dollar condo. They want to buy a 600 or 700,000 dollar condo. That’s just easier to handle and maintain, and then when you start to tack on some of those other expenses, a lot of times in can end up being actually pretty close.

 

Marc:

Got you.

 

John:

Yeah, and to jump in with that, you definitely want the downsize to be worth it. It’s not worth it if it’s 100,000 or something like that. You really want to make sure, if you’re downsizing to either free up some cashflow or get some type of lump sum balance to do something else with, you want to model it to make sure it makes sense, because Nick mentioned the pitfalls, property taxes. You’ve got realtor fees, things like that. You want to really itemize, “Hey, what is this expense going to be, and what is the benefit of it?”

 

Marc:

Okay, that’s a great point, so that’s the first one. The second one, second point on here, guys, of this video, was financially supporting adult children. I kind of roll with this one too, right? This is the hardest one for every parent because everybody’s going to be a little bit different. The argument is, some people feel like they’ve got to help their grown kids out, and others say, “Heck no,” right, so how do you feel about that, first of all, and second of all, how do you approach that with clients?

 

John:

Yeah, I’ll let Nick take this one so he can be the bad guy.

 

Nick:

Yeah, I’ll go first, and I’m not a parent, so that’s my disclaimer. We see this more and more, and one of the things that we hear about this quite a bit are that, and we agree to a certain extent, is that the barriers to entry on certain assets or kind of landmark acquisitions in the lives of people that are in their late 20s, early 30s, dependent upon where you are, and this area is one of them, they are harder to achieve. Granted, and people that have had assets or substantial assets over the last 10 years have gotten some massive appreciation and have really benefited, where people that don’t have assets haven’t been able to participate. Dependent upon what it is, as long as it’s not having a material negative impact on the plan of our clients, we do tend to be pushing them in the way of, “Hey, let’s kind of cut some of this stuff off,” especially if it’s an ongoing monthly sort of support, if there’s not any sort of major medical or whatever and it’s just like a failure to launch scenario. Up north we used to have basements. It’s like, if somebody’s kid is in the prototypical, in the basement for the last 10 years and they need to get out, then we may have some gentle nudging related to that.

 

For example, one instance I’ve seen is people helping with IVF, for example, which can be really expensive, and their kids want to start a family and they don’t have the money to start a family, and that’s been a gift that, giving some money to help that sort of thing. Something like that makes a ton of sense, if they can afford it. For them to buy a motorcycle or something, that maybe if they were just kind of … The kid maybe worked more or had some sort of plan or was making good income, and it wasn’t just to make them happier because they felt guilty, that’s a different sort of conversation.

 

Marc:

All right. John, you want to stay away from being the bad guy on this one, or are you good with that?

 

John:

No, I can jump in here with some thoughts. No, we see it a lot more often recently. I’ll tell you that home purchases, home prices have skyrocketed, so I’ve seen a lot of clients where it’s like, “Hey, I’m going to help them with a down payment.” It goes back to everything we always say, “Just make sure you can afford to do it and it doesn’t hurt your plan,” because your kids have time to adapt, and the last thing we want for our clients, it’s where it’s like, “Hey, I need to go back to work or I need to do … I can’t now enjoy my retirement. I can’t go on vacation because now I’ve basically been funding my children, at this point.” I mean, there’s certain things you have to assist with, and we get that, but we’ve also seen scenarios where we’ve had some clients that just continue to assist kids pay just unsecured debt for running up the credit card bill, and that’s where it’s a situation where you’ve got to weigh out what you’re doing, but your kids can typically adapt, where, once you’re at a certain age, it’s hard to go back to work even if you have to. Just make sure take care of yourself first so you have the ability to help others.

 

Marc:

Well, you’re right. Yeah. It’s like the whole airplane thing, right? Make sure your mask is on before you try to help the others, kind of thing. I get it, right? As a parent, we all want to try to do something for them, but to your point, don’t overextend yourself. Don’t risk your own retirement, because you can’t finance that, right? You can’t finance retirement.

 

Nick:

Yeah, and not only that, but sometimes going to the well once is maybe one thing, and we can model it and show it, but we’ve also seen instances of, it’s the third time, fourth time. John mentioned revolving debt, credit card debt, “Oh, they learned their lesson this time,” et cetera, et cetera, and especially when that’s-

 

Marc:

“They helped me once. Maybe they’ll help me again.” Yeah.

 

Nick:

Yeah, exactly. There’s definitely some … Unfortunately, sometimes the kids will take advantage of that.

 

Marc:

For sure. Yeah, good point. All right. Number three, expensive toys that become expensive burdens. I think we’ve all probably been there as you get closer to retirement, too. You’re making more money, right, so you’ve got the boat, the RV, the classic car, something, right? At some point, maybe you don’t own things. Things own you, as the saying goes. Thoughts?

 

John:

I’ll say I feel like my house owns me right now so I can relate to some of this stuff. Yeah, here in Florida, we see this quite a bit with boats, where clients have boats, enjoy it. As they get into retirement, maybe early on, they’re enjoying it, maintenance, all this stuff. Then it kind of turns into, “I’m not really going on the boat as much.” What we normally do, even with our younger clients that still have it, we’ll model selling it and offloading those expenses. That’s a big one we see here, and then when COVID hit, kind of backtracking six years now, the whole RV craze, where we couldn’t travel too much, and all of a sudden everyone started buying RVs.

 

Marc:

Yeah, that’s a good point.

 

John:

I’ve seen a lot of RV sales lately, the last couple of years.

 

Marc:

Yeah, that’s a great point. Travel trailers and the whatnot. Yeah.

 

Nick:

Yeah, and I’ll say the thing with, especially with boats, tends to be all of the ancillary expenses related to it.

 

Marc:

Bust out another thousand, that’s what it stands for.

 

Nick:

Yeah, yeah, but-

 

John:

I like that one.

 

Nick:

Especially here now, I mean, we’ve seen where even on a boat that’s paid off, between fuel, dock fee, the power, regular annual maintenance, somebody might be running between 25 to 35,000 a year, and when they realize, when you factor in a safe withdrawal rate, hey, essentially you’ve got withdrawals from five to 600,000 dollars of your assets that are dedicated specifically to your boat. Do you love it that much? The reminder with people that it’s not always all or nothing, where maybe it’s like, “Hey, let’s just have an exit plan.” Say, “Hey, you’ve got five more years of this. Enjoy it, use it to its maximum, really look to have a great time with it, and if you end up after the third year just kind of really slowing down and not really using it as much, that’s a sign for you to shift. You can always join a boat club and try that and not have to deal with the other maintenance related.

 

Marc:

That’s a good point. Yeah, that’s a good point. Well, we’re talking about these things that they, again, this video is saying, “Hey, sell these things before you retire.” I want to get to the last two here, guys. Number four, and this is interesting, the second car. Without a commute, now, again, you’re thinking that the concept is you’re in retirement at this point, right? Two cars sitting in the garage may be costing more than they’re worth in insurance, maintenance, so on and so forth. Is it worth asking the question, John?

 

John:

Yeah, so in the video, I’ll go from my own experience and plan the last 20 years, but in the video he talked about, hey, it worked out for some of his clients. I’ll tell you, I see the reverse, where most, and I’d say most people, I think, like having the second car and the autonomy, doing their things.

 

Marc:

The freedom. Yeah.

 

John:

Yeah. We just had a meeting, Nick and I last week, where it said, “Hey, we have one car, but we want another one,” and we were like, “Let’s put it in the plan.” It worked, and maybe to kind of find an in between, it’s like, hey, you have your main car, and maybe you find kind of a used car that’s good quality, safe, everything like that, but it’s not as expensive as the other one. This one here, I would say more often than not, I think it’s okay having the second car if you can afford it, unless someone really just doesn’t drive. I’ll pick on my parents here. My mom hates driving, but I’ll tell you, she has her car, because if she wants to go to her sister’s house, she’s not waiting for my dad. I’ll tell you that.

 

Marc:

Yeah, exactly. No, the freedom thing comes … I mean, it’s a huge piece of it, for sure. Nick, any thoughts there?

 

Nick:

Yeah, there’s no way that I would tell somebody to sell a car and hang out. That’s one of those things that I wouldn’t touch. I mean, I’ve seen it where we’ve had some clients kind of make that decision maybe late 70s, early 80s, but really early on in retirement there’s already a sense of purpose and autonomy, changes that are happening by shifting out of work and all that.

 

John:

People are together all day now.

 

Nick:

Yeah, yeah.

 

Marc:

Yeah. That’s a good point. Yeah. “I’ve got to get in the car to get away from you.” Yeah.

 

Nick:

Yeah. Yeah. Needing to escape, and that’s not anything that’s-

 

Marc:

I think, maybe depending on where you live, too, right, guys? I mean, in some places, if you can walk to everything you want to do, then great, but again, depending on where you live, I mean, here in North Carolina, where I live, no, there’s no way. It’s miles to get to anything, right?

 

Nick:

The other thing I would say, too, is maybe the one thing, one conversation that we have had with people is, where maybe it’s a couple that’s used to getting a new car every three years, each of them, and maybe shifting to kind of having the one car that’s a little bit higher end, and then, second car, maybe just holding onto it longer or keeping the costs down over a longer period of time, something like that.

 

Marc:

That’s a good point. Yeah.

 

Nick:

Can make a whole lot of sense.

 

Marc:

Well, Nick, you touched on the identity piece, and that was the fifth piece of this. This one can’t be sold on eBay or gotten rid of, right? The argument is that clinging to that professional title or your sense of former self can hold you back from discovering what you want to do or be in retirement. I guess it just kind of, we’ll wind it out like that. How do you guys help? Because that’s probably the biggest challenge, right? How do you reframe and rebuild who you are, when you get to this new phase?

 

Nick:

Yeah, and I can kind of start with this one. We’re big believers in the fact that people need purpose, and oftentimes throughout their, in theory, working age years or raising a family years, whatever it is, there’s oftentimes the purpose needed, whether it’s raising kids, whether it’s being part of helping to raise grandkids, whether it’s work and only work, if you didn’t have kids. My wife and I, we don’t have kids, and from the standpoint of our work and the things that we do, other things like volunteering and stuff like that, people need purpose, and shifting that mindset of, the outward perception of people showing value or acknowledging your value through things that you do shifts to be more internal, where you don’t get sort of that automatic response that you might with a job or from your kids doing well in school, or different things like that. It can be a tough transition for people.

 

Marc:

Well, John, I guess I would ask you this final question. Maybe something for folks to ask themselves is, “Does this still serve my new life or my old one?” Right? When you get into retirement, when you’re thinking about the questions that you’ve got to deal with, would you say that’s a pretty good way of looking at that?

 

John:

Yeah, I do. I think it’s kind of starting with, going back to the plan, you start with, “Hey, what are my goals? What am I trying to accomplish?” You can look at that from a personal time standpoint. “What are my priorities? What do I enjoy doing now? What are some of the bucket list things?” All comes down to just identifying what you want to focus on to maximize your retirement and what you guys like to do.

 

Marc:

Yeah. At the end of the day, right, you’ve got to ask yourselves those tough questions, right? “Does this still serve the life I want or the old life?” With 3.7 million people watching this video, that was for a good reason. It touched on something real. Retirement isn’t just about what you’ve accumulated. Sometimes it’s also about what you’re willing to let go of. Right? We also kind of hit this phase now, and it’s become very trendy as well., to declutter, but I think as you get older, you do kind of want to do some of that. You’re kind of like, “I don’t need all this junk anymore,” and so you need to kind of think about some of those things when it comes to your financial life. Not just the monetary pieces, but also just the other factors and things that go into it. As always, if you’ve got questions, you need help on how to do that, because it’s our first retirement most of the time, right?

 

Most of us don’t retire more than once unless you’re Favre or Brady or somebody like that. You’ve got to get it right the first time, so reach out to a team that helps people all the time get to and through retirement. Reach out to John and Nick and the team at pfgprivatewealth.com, that’s pfgprivatewealth.com, and get started today with a consultation. Do a 15-minute chat by simply calling 813-286-7776, 813-286-7776, or go to pfgprivatewealth.com. That’s going to do it this week for Retirement Planning Redefined. Don’t forget to subscribe to us on Apple or Spotify or whatever podcasting app you enjoy. For John and Nick, I’m your host, Mark. We’ll see you next time.

 

 

 

She Didn’t Plan to Retire at 62. Here’s How It Happened.

On This Episode

Today we’re trying something a little different. We’re going to walk through a real retirement story in chapters — and as each new detail comes in, we’re going to react to it the way a financial advisor would. Fran is 62, she figured a lot of this out on her own, and she’s only now sitting down with a professional for the first time. Let’s see what we find and what we might do differently from here.

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Check out all the episodes by clicking here.

Disclaimer: PFG Private Wealth Management, LLC is an SEC Registered Investment Advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. The topics and information discussed during this podcast are not intended to provide tax or legal advice. Investments involve risk, and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed on this podcast. Past performance is not indicative of future performance. Insurance products and services are offered and sold through individually licensed and appointed insurance agents.

 

Marc:

Today we’re trying something a little different. We’re going to walk through a real retirement story in chapters. As each new detail comes in, we’re going to react to the way a financial advisor would for Fran. She didn’t plan to retire at 62, and here’s what happened. So let’s talk about Fran’s story.

 

Hey everybody, welcome into the podcast. This is another edition of Retirement Planning Redefined with John and Nick from PFG Private Wealth. And if you need some help, got some questions, want to reach out to the fellows, give them a jingle, or I guess not a jingle, but find them online at pfgprivatewealth.com. That’s pfgprivatewealth.com. Of course, you can call them at 813-286-7776. We’ll have details in the show description below if you’d like to get ahold of them. And we’re going to talk about this kind of a retirement story here today, guys. Kind of break this down a little bit, so we’ll get started in just a second. But Nick, how are you my friend? You doing all right?

 

Nick:

Yeah, doing pretty well. Thanks.

 

Marc:

Good, good. Good to have you here. Good to chat with you as always. And John, how are you, my friend?

 

John:

I’m doing okay. Summertime started for the kiddos, which means I get to sleep in an extra 30 minutes.

 

Marc:

Oh, there you go. Little extra sleep is always good. Exactly.

 

John:

So it’s good, yeah.

 

Marc:

Well, let’s dive in. Let’s start with this chapter breakdown. So guys, we’ve got this story again, kind of a real case study here. So who is Fran? Whoever wants to do the setup here. Tell us a little bit about the story here.

 

Nick:

Yeah, so I’ll go ahead and start. So Fran, 62 and single, spent 30 years teaching in public schools kind of up north and decided wanted a change. So about five years ago, she moved south, rented a home, picked up a full-time admin job at a local office, and kind of did it from the standpoint in the sense of it wasn’t something that she loved or had always wanted to do. It was just kind of stabilize, get a job, earn some income, and be able to cover bills and figure out what she wants to do.

 

Marc:

Gotcha. And that’s fairly normal, right? A lot of people are going down to Florida, doing this snow bird thing. And so for a first time situation, somebody walking in, like you’re reviewing this case for somebody who’s coming in saying, “Hey, I’d like to talk to you about getting some help.” What’s a couple of things from just the story setup that stands out to you?

 

Nick:

Yeah. As somebody who kind of helps people plan for a living, I start to twitch a little bit just from the standpoint of it seems like the decisions being made are a bit on a whim and there’s not necessarily kind of a broad based strategy put in place. So for example, seeing somebody that had retired as a public school teacher, most likely there’s a pension involved. And we’ll learn that she had waited on the pension a little bit, but was there an opportunity to take something sooner or not? Obviously with her being under the age of 65, then there’s going to be costs associated and probably substantial costs associated with healthcare. So that’s something that would factor into the job opportunity that she was looking for.

 

In this case, she had rented a home, which in situations like this oftentimes does make sense dependent upon where she’s coming from, but we don’t know if she had sold a previous house or had rented before and then came down to rent as well. So we’ve got kind of variability and costs associated with a home. And then just getting a better understanding of what other sort of assets are in play and/or what’s the game plan, maybe like post 65 are all things that would help us from a planning perspective.

 

Marc:

All right. So let me jump in and do the next piece for you. Kind of a turning point here in the story. A few months ago, guy’s, Fran’s office restructured. She was offered a new role, more training, longer hours, not much more pay as a single person whose paycheck covers everything, taking on more of roughly the same didn’t make a lot of sense so she walked away and unfortunately she got let go, not exactly by choice but not exactly against her will either. So I guess when somebody lands in Fran’s position, retired before they planned as well, Nick, as you mentioned, what’s the most important thing to get some clarity on? How do you proceed in a situation like that? Now you find yourself without a job.

 

Nick:

Yeah, this tends to be a tricky one and we’ve kind of run into this where, and it seems like it’s happening more. We’ve seen this more in the last 12 months where people in their early 60s with the expectation of working a few more years and are sub 65, so have to deal with cost of healthcare and that sort of thing have been downsized, and there’s substantial difficulty whether they’re like a quote unquote highly trained or more specialized position, or in like France position, somebody that had done that previously and had shifted into a role that was maybe not as dynamic as had been and the other way. And so again, kind of having to adjust to whatever’s going on and the situation being dictated to her versus maybe being in the driver’s seat and having more options on what to do as she moves forward.

 

Marc:

Yeah, that’s the risk I think, to your point about not planning, is you’re not in the driver’s seat, or the catbird seat, right? You’re kind of reacting to things on how they go. To that point, what she did next is started drawing Social Security right away at 62, right? So locked that in that early. So you’re taking that what, 30% haircut right off the bat there?

 

Nick:

I believe so.

 

Marc:

Yeah. So she also picked up a part-time job at a gym she goes to. Nothing too demanding, keeps a little extra money coming in. So her monthly picture is now looking like 1,450 in social security, about 800 from the gym job, but 1,600 going out in rent before anything else. So how do you react now?

 

Nick:

Yeah, see that’s kind of the tough thing at that point, what do we have? 2,250 in income coming in from the social security and the job and a huge percentage of that is just going out just to cover rent.

 

Marc:

Yeah, not utilities, just rent. Yeah.

 

Nick:

Right. Not utilities, not food, not car insurance, not gas, a lot of different things.

 

John:

No vacations.

 

Nick:

Yeah, no vacations, not doing the things that maybe she wanted to do. And so this makes us rewind a little bit even further back, and in retrospect kind of look at as an example. So a conversation with somebody like Fran that we would have probably had if we had met her early on, knowing how dynamically an extra few years of working at a job that has a pension related to it, like a teacher.

 

So we might have had discussions and kind of doing some projections on maybe even a couple extra years as a teacher and then spending summers in the south, what that could have done to kind of ease her way into it and maybe break up the monotony of what she had been doing over a period of time, making sure that she really understood the impact of taking Social Security at 62 would have.

 

It’s like in this scenario, she doesn’t really have a whole lot of other options unless she would have found another full-time job. And what we start to kind of see is that if at that point in life, if somebody’s kind of let go and after a few months they haven’t had an opportunity to find another position, the freak-out factor really starts to kick in and they want to have something coming in no matter what and … Go ahead.

 

Marc:

No, I was going to say to that point, you mentioned the Social Security, right, or excuse me, the pension earlier, she’s just basically getting by with what she has. What she hasn’t touched, and I guess that’s where it gets more interesting and I wanted to kind of tee that up since you mentioned that earlier. She hasn’t touched that teacher’s pension, which she hasn’t started yet. 1,100 a month is going to be available but at 65, so you still got a three-year window there, right? But also the 403B with about 210 grand in it that she hasn’t touched. So now you can kind of start to factor some of that stuff in. So I guess right now she’s basically living paycheck to paycheck. So now you get a bit more of the fuller picture. How does that start to shift some things?

 

Nick:

Yeah. And one of the things that we will see is that people, their normal reaction will oftentimes be to avoid using any sort of investments just because they like the idea, or there’s like a psychological aspect of not touching their money, where taking Social Security at 62 is still touching your money. It’s just kind of in a different way. So kind of laddering these things together and knowing that she had some money kind of set aside, we probably would have looked at potentially supplementing the income for a year, maybe two years with the money in the retirement account.

 

Letting the Social Security grow a little bit more, then kicking that in and then having the pension kick in where then that would give an opportunity to take a little pressure off the retirement funds, and stop withdrawals for a few years and let that grow back. Because not only does somebody lock in a lower amount when they take Social Security early, but now they just have less money for things like the cost of living adjustments to kind of compound on in the future and that sort of thing. The big takeaway of what we see here is the fact that there wasn’t necessarily a retirement plan put together from a financial aspect.

 

Marc:

Right. I mean, she’s 62. Even a little planning a couple of years ahead of time might have helped a lot, right?

 

Nick:

Yeah. Yeah. There definitely would have been an impact on what could have happened. And the thing that also happens when we have this sort of conversation, anytime anybody’s going to make a substantial career change, like somebody like a teacher, for example, they have some of the best job security there is, and kind of being in the private world and shifting from being a teacher to the private world, it can be a little bit of a culture shock.

 

And just understanding that you can be let go and/or the dynamics in play can be substantially different. And so just that predisposition to what sort of field she was in probably didn’t necessarily lock in the risk taking of uprooting, moving, and even how delaying that a couple of years could have had most likely a pretty substantial positive impact on the plan, and maybe freed her up to be able to not have to work part-time for longer or have all these other variables that she’s not in control of.

 

Marc:

Yeah. And I think ultimately for me, like what I see on stuff like this is she figured out a lot of parts on her own, and that counts for something sure, but the difference is always like instead of doing it, reacting at that moment is doing a little bit of planning just goes a long way, right? I mean, you could still build one even in this situation, but ideally the sooner you can, the better. We’re not talking necessarily 10 years out, although that’d be great too, but don’t just wait until the last minute and then just react to stuff.

 

Nick:

Yeah. And the reality too is that in the short term, even though there’s a lot of moving parts kind of in that range of losing the job and shifting to part-time and taking the Social Security, really where the pinch will be felt is 10 years down the road when inflation really starts to kick in, things are feeling more expensive.

 

Marc:

That’s a good point. It feels that way now, right?

 

Nick:

Yeah. Yeah, for sure. And so it’s like that thought process of like, well, hey, the increases I’m getting on my Social Security, and maybe for her a pension, aren’t really keeping up with where things are going, maybe she didn’t have the opportunity to work for very long at the gym even and can’t find any other job and she’s just now her lifestyle, her expenses, John mentioned the opportunity to be able to travel, do the things that she wants to do. Some of those things may have been taken away, and some extra more kind of detailed planning to … Because those are the sorts of things that we would show as situations that could happen for somebody and making sure that there’s contingency plans and plan B, plan C if, hey, if these things happen, where can we go? How can we adjust?

 

Marc:

Yeah. I mean, stress testing different scenarios is a huge part of going through the retirement planning process with an advisor so that you can … I mean, she probably wasn’t expecting to lose that administrative job and having to go to the gym job, right? So life always throws things at us, so you want to make sure you got a strategy and a plan in place before you pull the trigger and go moving, or retiring, or whatever the case is, especially if you’re getting close to it, especially again, 60, 62, that kind of thing.

 

So as always, if you got questions, need some help, reach out to the guys. If her story sounds anything like something like you’re facing or could be facing, make sure you take the action now and start talking with qualified professionals and see, just sit down, have a conversation. They’re complimentary often. Most places do that, just to kind of see if they can help you out and if it’s going to be a good fit. So reach out to the guys, have a 15-minute chat, pfgprivatewealth.com. That’s pfgprivatewealth.com or call 813-286-7776. And that’s going to do it this week for Retirement Planning Redefined for John and Nick. I’m your host, Mark. We’ll see you next time here on the podcast. Don’t forget to hit that subscribe button. We’ll catch you later.

Reflecting on the YTD Market Volatility & Recovery

Monthly Market Summary

  • The S&P 500 Index returned +6.3%, its strongest 1-month return since November 2023. Large Cap Growth stocks led the rally, with the Nasdaq 100 and Russell 1000 Growth gaining +9.2% and +8.9%, respectively.
  • Technology was the top-performing S&P 500 sector for a second consecutive month, with the Industrials and Consumer Discretionary sectors also gaining over +8%. Health Care was the only sector to trade lower, and defensive sectors were relative underperformers as the market traded higher.
  • Bonds ended the month with a slight loss, with the U.S. Bond Aggregate posting a -0.6% total return. Corporate bonds outperformed as credit spreads tightened, with investment-grade posting a +0.2% total return and high-yield returning +1.7%.
  • International stocks traded higher but underperformed the S&P 500. Developed Markets gained +4.8%, while Emerging Markets returned +4.0%.

Markets Back Near All-Time Highs, But Forward Visibility Remains Low

The defining story of 2025 has been changing trade policy. Markets have weathered two months of policy-driven volatility, only to end up roughly where they started. After a nearly 20% decline from late February to early April, the S&P 500 has rebounded and is within 4% of its all-time high. What remains is weakened business and consumer confidence, rising inflation expectations, and a Federal Reserve that has paused interest rate cuts. The threat of a full-scale trade war and global supply chain disruption has diminished, but the full impact of recent events may take months to become known. Early economic data suggests the tariffs have had a limited impact, but we will continue monitoring what happens to economic and earnings growth in the coming quarters.

To date, the administration has introduced multiple 90-day tariff pauses. The pauses are temporary and staggered: the pause for most countries runs through early July, while the agreement with China extends through mid-August. A recent court ruling adds a layer of uncertainty by challenging the administration’s authority to impose tariffs, although the decision is under appeal. The U.S. economy entered the year with solid momentum, and current market conditions suggest investors are pricing in only a modest impact from tariffs. With policy details still emerging, markets are likely to remain sensitive to new developments, which could mean continued volatility over the coming months.

Looking Ahead: Navigating Uncertainty with a Steady Plan

What is most notable about this period is how quickly sentiment can change. Markets are forward-looking, which means they price in not only current conditions but also future expectations. This helps explain why the market can rally when data is weak and selloff despite strong earnings and economic growth. The stock market’s sharp decline and quick rebound is a reminder of the importance of maintaining a long-term perspective. Periods like this reinforce several important investment principles. Staying invested can help avoid the costly mistakes of poorly timed exits and re-entries. Emotional discipline and a well-diversified portfolio are your best defenses against making reactive decisions during market volatility. With the potential for more volatility, it’s important to focus on what you can control—diversification, discipline, and sticking to your long-term plan.

Important Notices & Disclaimer

The information and opinions expressed herein are solely those of PFG Private Wealth Management, LLC (PFG), are provided for informational purposes only and are not intended as recommendations to buy or sell a security, nor as an offer to buy or sell a security. Recipients of the information provided herein should consult with their financial advisor before purchasing or selling a security.

The information and opinions provided herein are provided as general market commentary only, and do not consider the specific investment objectives, financial situation or particular needs of any one client. The information in this report is not intended to be used as the primary basis of investment decisions, and because of individual client objectives, should not be construed as advice designed to meet the particular investment needs of any investor.

The comments may not be relied upon as recommendations, investment advice or an indication of trading intent. PFG is not soliciting any action based on this document. Investors should consult with their financial adviser before making any investment decisions. There is no guarantee that any future event discussed herein will come to pass. The data used in this publication may have been obtained from a variety of sources including U.S. Federal Reserve, FactSet, Bloomberg, Bank of America Merrill Lynch, iShares, Vanguard and State Street, which we believe to be reliable, but PFG cannot be held responsible for the accuracy of data used herein. Any use of graphs, text or other material from this report by the recipient must acknowledge MarketDesk Research as the source. Past performance does not guarantee or indicate future results.   Investing   involves   risk,   including   the possible loss of principal and fluctuation of value. PFG disclaims responsibility for updating information. In addition, PFG disclaims responsibility for third-party content, including information accessed through hyperlinks.

No mention of a particular security, index, derivative or other instrument in the report constitutes a recommendation to buy, sell, or hold that or any other security, nor does it constitute an opinion on the suitability of any security, index, or derivative. The report is strictly an information publication and has been prepared without regard to the particular investments and circumstances of the recipient.

READERS   SHOULD   VERIFY   ALL   CLAIMS   AND   COMPLETE    THEIR    OWN RESEARCH AND CONSULT A REGISTERED FINANCIAL PROFESSIONAL BEFORE INVESTING IN ANY INVESTMENTS MENTIONED IN THE PUBLICATION. INVESTING IN SECURITIES AND DERIVATIVES IS SPECULATIVE AND CARRIES A HIGH DEGREE OF RISK, AND READERS MAY LOSE MONEY TRADING AND INVESTING IN SUCH INVESTMENTS.

PFG Private Wealth Management, LLC is a registered investment advisor.

Inside the Advisor’s Office: What People Are Actually Concerned About

On This Episode

 

Ever wonder what other people talk about with their financial advisors? A new survey of nearly 400 experienced advisors reveals the biggest concerns, challenges, and financial goals their clients are facing today. From retirement planning to healthcare costs to working longer than expected, we’re breaking down the key takeaways and how they compare to what we see in our own client conversations.

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Check out all the episodes by clicking here.

 

Disclaimer: PFG Private Wealth Management, LLC is an SEC Registered Investment Advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. The topics and information discussed during this podcast are not intended to provide tax or legal advice. Investments involve risk, and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed on this podcast. Past performance is not indicative of future performance. Insurance products and services are offered and sold through individually licensed and appointed insurance agents.

 

 

Marc:

Ever wonder what people are talking about with their financial advisors? Well this week on the show we’re going to discuss a new survey of nearly 400 experienced advisors revealing the biggest concerns, challenges, and financial goals that their clients are facing. We’ll see how that compares with what the guys see here on the show. Let’s get into it this week on Retirement Planning – Redefined.

 

Welcome to the podcast, everybody. Thanks for hanging out with John and Nick and myself as we talk investing, finance and retirement. And guys, we’re going to share this survey. We’ll put a link into the show descriptions as well for folks that want to check it out, but want to run some of this information past you guys and see does that correlate with what you’re seeing, do you think it’s accurate, not accurate, and just spitball and talk a little bit about some of the stuff out here.

 

The survey was done of nearly 400 experienced advisors all with around 20 years or more of a business, practicing business, so interesting. They didn’t really say exactly the age bracket of all the people they were talking to, so there could be some folks that are not necessarily retirement age. They could be younger as well as older, but I want to run down some of this stuff and just get your guys’ take on it.

 

How you doing this week, John?

 

John:

I’m doing well. Daylight savings is messing with me a little bit, but I’m adjusting pretty well. And one of my kids, actually both my kids, they’re testing for an honor belt in karate.

 

Marc:

Oh, nice.

 

John:

So they’re excited.

 

Marc:

They’re going to whoop on you. Be careful.

 

John:

It’s funny you say that. They’re running around the house kicking me now. It’s like I wanted to get them into some self-defense stuff, but now I’m getting kicked.

 

Marc:

So now you got to walk around with some pads on.

 

John:

Pretty much.

 

Marc:

Make sure you’re not getting beat up too much. Very cool. Well watch the shins, man. They’ll get you in the shins.

 

Nick, how you doing, buddy?

 

Nick:

Good. We’re staying busy.

 

Marc:

He’s like, “Good.” Well, let’s break this down a little bit, guys.

 

John:

That’s the sound of a guy that’s in the middle of planning a wedding.

 

Marc:

Right? That’s what I was just thinking. He’s like, “I got to make another decision. I don’t want to make a decision.” Let’s jump into this and we’ll see if we can make this easy for you this week, Nick.

 

So seeking out a financial advisor, the first part of this survey, advisors in the survey said 52% of their clients have sought out financial advisors to help with the retirement planning. About 34% surveyed were just looking for somebody to build wealth with. And in an era where everybody can call themselves a financial advisor, does that strike you as interesting? What do you guys think about that, 52% looking for retirement planning versus 34 just looking for some sort of wealth building, whoever wants to start?

 

John:

Yeah, those numbers seem accurate to me. Well, I guess I’m a little surprised it’s not more looking for help with retirement planning.

 

Marc:

Okay.

 

John:

I’d say the majority of our clients are retirement planning based, “Hey, I want to make sure my plan’s good. I want to make sure I don’t outlive my money.” As far as building wealth, that does come up quite a bit, and Nick will jump in as well, but I’d say most of our clients are looking for retirement planning and just making sure they’re on track and making sure that they’re making the right decisions.

 

Marc:

And it’s two different mindsets too, right, Nick? I mean, so you need to decide what it is that you’re looking for. I mean, not to say that you couldn’t work with a retirement planner who also can help you with some of the wealth building, but it is a different skillset as well. If you’re just looking for someone only to help you build the wealth, that’s a little bit easier, I would think.

 

Nick:

Yeah, and I would almost, if I were to say maybe put that in other words, we talk with people at the three phases of money as far as their life goes are accumulation or growth, distribution, taking their money in retirement and then transfer when they leave money. And so I would say from that initial, that wealth building, that’s most likely accumulation focused. And because so many people accumulate their money while working in their 401(k)s and that kind of thing, I think it tends to be a little bit of a different conversation and it’s those people that as you get closer to retirement. So without having ages, it does make it, the numbers are interesting, and I agree with John, I would’ve thought maybe it’d be a little bit higher from the standpoint of the retirement planning side, but-

 

Marc:

Well, I mean, if you’re just trying to grow the money, again the market’s been, obviously we haven’t had a prolonged downturn, and it’s been choppy here lately, but we haven’t had a prolonged downturn since ’08, ’09, so there’s a lot of information out there about saying it’s a little bit easier to build the wealth. But the preservation stage, which retirement is a little bit more complicated. There’s more things going on than just the portfolio.

 

But with that in mind, check this out. Over half of the survey of financial advisors said the average client asset minimum was 760,000. I found that to be good. I know different areas are going to be more or less depending on the economic state of the area, but when you often hear that people aren’t doing a very good job saving for their retirement future, three quarters of a million dollars is not bad.

 

Nick:

It’s definitely interesting to see the numbers and how they’ve changed over the last five to seven years where, and you mentioned it earlier where we’ve had a long prolonged period of time with the market going up, and so there’s quite a bit of people meeting with us or ending up with more money than they had thought that they would or that sort of thing. There’s a little bit of concern with that that only lasts for so long and that there’s some correction and all that kind of stuff to happen. But absolutely, definitely that puts most people in the wheelhouse of where they need to be to have a successful retirement.

 

Marc:

I mean, it’s not bad. John, do you guys have a minimum? I mean, I know different advisor firms do different things. You can’t service everybody. There’s only so many hours in a day. So you’ll hear something where somebody says, “Well, we work with people with 250,000 who have saved or more in assets,” or some or a million or whatever. Do you guys have a breakdown?

 

Nick:

We don’t have a set minimum that we advertise or market.

 

Marc:

Okay.

 

Nick:

I would say that the majority of the people that meet with us tend to have what many institutions have as their minimum. So in other words, a lot of places will tell people, like you referred to that, they’re looking to work with clients that have 250,000 or more just from an efficiency standpoint of trying to make sure that they can service their clients and that sort of thing, and so we end up above that with most clients. But the reality is, is that the conversations that we have with clients are really we don’t keep that rule set in stone because for us, it’s more of a relationship-based.

 

Marc:

Individually based kind of thing? Okay.

 

Nick:

Yeah, and really it’s something we’re looking for people that are serious about planning. I would say if you were to draw a line between what we were talking about earlier where a growth or retirement planning in a more broadly focused strategy, so they’re focused on that. They’re serious about it. We reference like, “Hey, we don’t want to convince you that you needed an advisor. We want you to know that you need one and we want to interview for the job,” kind of concept.

 

Marc:

No, that makes sense because I mean if you’re giving suggestions and someone’s not willing to take them, you’re just wasting each other’s time versus… Yeah.

 

Nick:

Exactly, and we found that that’ll waste more time than in theory working with somebody that maybe isn’t where they’re going to be yet. And also-

 

Marc:

It needs to be a reciprocal relationship.

 

Nick:

For sure. Communication’s super important for us because we’ve also found that we’ve had people come in that maybe are under that 250, but their parents are wealthy and they ended up being a teacher or something that maybe didn’t allow them to save as much money as some sorts of jobs, and they’re going to inherit money and they need assistance that way. So I’d say we’re pretty comfortable with our process and how we approach that sort of thing and really look for it on a relationship basis, communication basis, and how we all get along.

 

Marc:

That makes sense. And it’s got to be a two-way street. I mean, when we do the podcast, it’s not designed to turn every listener into a client if they’re not already a client, but it is designed to say, “Hey, if it’s the right relationship field going both ways, then we’re happy to help if we can.” That’s pretty cool. So that’s a good way of looking at that.

 

John, check out some of these top concerns. Let me know what you think here. So no surprise, number one, outliving their assets, 38% of the people surveyed. That’s pretty much always number one, right? Outliving your money.

 

John:

Yeah.

 

Marc:

31%, generating reliable income streams, a pretty high number as well.

 

John:

Yes.

 

Marc:

Okay. Then it drops off to a pretty stark, down to 12% for a future stock market crash. Now with some context here, this survey was completed at the end of last year, so it was December of ’24. Do you think that number’s gone up recently?

 

John:

I would willing to bet that number’s gone up. I think we were talking about the market, the last real big downturn was ’08, and I think in the last 10 years, we’ve only had two years of the market being down, the S&P 500. I think it was, what, ’22 and 2014, I believe.

 

Nick:

I’d almost say that’s a leading indicator that there’s going to be, it’s one of those things. Once people get that comfortable, that’s usually when it comes.

 

Marc:

I mean, it’s been a while, right? So because nobody’s worried about it whenever it’s riding high. We only seem to worry about it whenever we’re in the middle of it falling a little bit. But the one that really surprises me is all the way down to 8% for healthcare costs. Now if you guys are focused more on helping people with retirement planning and strategies, that to me, again depending on the ages of the people that answered this survey, healthcare costs at 8% seems awfully low because it’s pretty costly, and we need to be having those conversations when we’re, especially as we’re getting older.

 

John:

Yeah, for sure. This one, it is very important, and I think it’s same thing we’re talking about the stock market where it’s been doing well. And when you’re healthy-

 

Marc:

It’s great.

 

John:

…you think you’re going to be healthy for a long time.

 

Marc:

You don’t think about it. Right, exactly.

 

John:

You don’t think about it all. It’s back of your mind. I’ll tell you where we see a lot of people concerned about it is if they had to do some care for their parents. Then it becomes top of mind of like, “Hey, this was a lot that I just went through.” And taking care of them or seeing, whatever, if they have to go into a facility, and then in turn that’s where we see the most of our clients that are concerned about healthcare costs is if they had to take care of a loved one.

 

Marc:

Nick, according to the survey on that topic, advisors that were surveyed in this, were saying that clients should be more concerned about healthcare costs at around 54% unanticipated healthcare cost. Will you agree with that as well? Because I mean, obviously it comes out of the blue, it can totally derail the whole strategy.

 

Nick:

Yeah, I think part of that is, from an advisor perspective, the whole concept of long-term care, obviously I’d say many advisors have a good grasp on long-term care, but I think it’s become increasingly difficult for advisors to help clients plan for that with insurance or certain products that are out there. If we went back 10 years and from, let’s just call it 2015 back through maybe 2005, that was the golden era per se for clients to be able to secure a reasonably priced policy from a long-term care perspective. So I think maybe that ties into the concern that advisors have is that at the end of the day it’s a really expensive problem that clients can have, but it’s also an expensive solution that a lot of clients are reticent to spend on something that may not be an issue, especially in a state like Florida where all of the insurance, people have serious insurance fatigue here.

 

Marc:

Oh, I’m sure.

 

Nick:

So it’s a funny thing. The one time I actually answered a soliciting call earlier this morning was from State Farm calling me to, and they asked me if they could shop my car insurance for me, and I said, “Sure, let’s try it.” And sure enough, it was going to be $1,400 a year more than what I’m currently paying.

 

Marc:

Thanks for the help.

 

Nick:

And she laughed too, and she’s like, “Well, can I call you in six months?” I was like, “You can try.”

 

Marc:

You can try.

 

Nick:

I don’t think you guys are going to come down that much. And so it’s just crazy with what people are paying here. And so I think, long story short, I think that really ties into it as well for advisors.

 

Marc:

And I’ll hit you with this last one, John. I’ll let you start and then I’ll let Nick jump in if he wants to. And again, this survey was completed at the end of last year, so you can’t take the current market downturn into this conversation. But according to the survey, an average of 63% of clients age 55 or older intended to work to 65 and beyond. 63% of people wanted to continue working up to 65 or beyond, yet only 30% of those clients are actually still doing it. So I guess my question is, does this surprise you that people want to keep working longer? And if so, what are some of the main reasons why you guys are seeing people want to work into their older ages?

 

John:

It doesn’t surprise me. I think with the shift really since COVID of being able to work remote, I’ve seen a lot of people that sit there now thinking like, hey, I work from home. I can travel still and log in. And it’s given them a comfort of just saying, yeah, I’m making good money. I can continue to do this.

 

Marc:

Feather than nest some more, right?

 

John:

Yeah, so it’s just building up the nest egg and allows them maybe to feel comfortable doing some more travel that they otherwise maybe wouldn’t have felt so comfortable doing. We talked about the fears of outliving your assets, so I’ve seen a lot of that. And then there’s a lot of studies out there saying, just keeping sharp of mind. So I’ve seen that where people are like, “Hey, I don’t want to retire because I want to stay active. I want to have a purpose and continue to do things.” So I think I’m not surprised by that number.

 

Marc:

Interesting.

 

John:

Because we’re having more conversations of people wanting to work longer because they enjoy what they’re doing. And with Zoom, it’s become very easy to continue to work longer.

 

Marc:

Well Nick, I’ll give you this last piece here. 48% of those people feel like they don’t have enough saved to live on through retirement. I mean, you’re talking about half. So half of the people surveyed don’t think they have enough, so that sounds like it just comes back to just not truly having a plan or even really knowing what it is that you’ve got. They’ve probably never sat down and really pulled this stuff together so they don’t feel confident.

 

Nick:

Correct. I think you nailed it there. The uncertainty of not having a plan and not knowing and understanding what things look like really oftentimes causes procrastination, and then all of a sudden it’s 5, 7, 10 years later and there could have been a couple of small tweaks or a couple of small adjustments. I mean, in reality, there’s been so many times when within 30 minutes if John and I meeting with somebody the initial time, we can tell three to five things that they could do that wouldn’t have a significant impact on their life, but would have a significant impact from a positive perspective on their overall planning. And so whether it’s informing themselves and holding themselves accountable or working with an advisor, which we have found, and there’s been a ton of studies that have found that having that partner to help guide them through the decision-making process, that there’s significant value there and the average rates of return and all that kind of stuff show that because of the decision-making.

 

Marc:

Well, think about what you’re going through with the wedding planning stuff. So there was a thing a couple years ago we were talking about, some of the most stressful events we can do in life, one of them was planning for a wedding. One of them was planning for retirement, right?

 

Nick:

Yeah.

 

Marc:

There’s a lot of decisions to be made. And so having somebody to lean on I think goes a long way into removing some of that stress because it does get overwhelming. And at some points you’re just like, ah, screw it. I don’t even know what to do anymore. So being able to talk with guys like yourselves and say, “Okay, look. Here’s some thoughts we had,” or, “Here’s what we were afraid of,” or whatever the case is, it gives you that sounding board to bounce some ideas off of and maybe get some reassurance.

 

Nick:

Yep, fully agree.

 

Marc:

Yeah, and so are you having that same problem from the wedding standpoint?

 

Nick:

Right now we’re interviewing planners-

 

Marc:

There you go.

 

Nick:

…and the prices have gone up, so it’s-

 

Marc:

But you’re looking for help, right, because it’s a lot.

 

Nick:

Yeah, absolutely, absolutely.

 

Marc:

John, you don’t want to be the wedding planner?

 

John:

No, no. I did that 12 years ago-

 

Marc:

I got you.

 

John:

…and I want no part of that.

 

Marc:

I got you. Well, all right, guys, good conversation as always. Thanks so much for hanging out. So at the end of the day, I mean you find these surveys are pretty interesting. And I think a lot of this stuff comes back fairly similar each time, is that people are looking for some assurance. They’re looking for some clarity in some of these situations, so that’s the point of running through the planning process is finding out what do you got, where do you stand and how’s it working for you, and do you need to make some changes?

 

Often people feel like we’re going to have to do some major overhaul, and it scares them. But a lot of times when you run through the planning process, many people are in better shape than they realize. You just need some tweaks here and there. So if you want to have those conversations for yourself, reach out to John and Nick and get started today at pfgprivatewealth.com. That’s pfgprivatewealth.com. Get yourself onto the calendar for a consultation and a conversation.

 

And don’t forget to subscribe to us on Apple or Spotify, whatever podcasting app you like using. Retirement Planning – Redefined is the name of the show with John and Nick, and we’ll see you next time here on the program. Thanks, guys. Take care of yourself.

 

 

 

 

 

 

 

 

Understanding the Current Market Selloff

Recap of Year-to-Date Market Performance

Stocks started 2025 trading higher but have since pulled back. The S&P 500 has declined more than -8% from its all-time high on February 19th, lowering its year-to-date return to -5% (Figure 1). The Nasdaq 100, an index of technology and growth stocks, is down -7% year-to-date, while the small-cap-focused Russell 2000 has fallen -9%. The Magnificent 7, a group that includes Microsoft, Apple, Meta, Alphabet, Amazon, Nvidia, and Tesla, has declined nearly -15%. Given the recent volatility, our team wanted to discuss the current environment and provide a market update.

What’s Behind the Market Selloff?

Several factors are contributing to the current market selloff. First, momentum stocks that led the 2024 rally are now experiencing a sharp reversal. Figure 2 shows 2024’s top performers have become 2025’s underperformers. Technology stocks, the Magnificent 7, and Large Cap Growth powered last year’s gains, fueled by enthusiasm for the artificial intelligence industry. However, the concentrated rally led to stretched valuations and crowded positioning, particularly among the biggest companies. As those stocks lose momentum, it’s triggering a rapid unwind, with a large amount of capital rotating at once. Second, investor exposure to the stock market was high entering 2025. Households’ allocation to stocks reached a record high, and institutional investors, such as pension funds, endowments, and insurance companies, increased their leverage and equity exposure last year as stocks traded higher. Now, institutional investors and hedge funds are deleveraging, adding to the selling pressure. Third, optimism around the Trump administration’s pro-growth policies has given way to concern, with worries that spending cuts and the uncertainty created by tariffs will slow economic growth.

Market Volatility vs. Economic Reality

It’s important to remember that the stock market isn’t the economy, with some data points signaling a different economic reality. The Federal Reserve’s Weekly Economic Index (WEI), which tracks real-time activity using data such as unemployment claims, rail traffic, steel production, and tax withholdings, remains positive (Figure 3). Despite recent stock market volatility, the WEI suggests the broader economy hasn’t felt a significant impact. In the bond market, high-yield credit spreads, which measure the difference in yield between riskier corporate bonds and U.S. Treasuries, remain near all-time lows (Figure 4). The stability of credit spreads indicates that, so far, the selloff has been largely confined to the stock market. Together, these two data points suggest the recent volatility may be a market-specific adjustment rather than a systemic issue or sign of broader financial strain.

Is This Normal and Can the Market Selloff Continue?

Market volatility can be unsettling, but it’s a normal part of investing. Periods of enthusiasm often lead to recalibration. It’s natural to feel uncertain, but history shows that staying invested through volatility and maintaining a longer-term view is a prudent approach. Since 1928, the S&P 500 has experienced a decline of -5% or more in 91 of the past 98 years. Yet, markets have demonstrated an ability to recover and rewarded patience. By maintaining a diversified portfolio aligned with your long-term goals, we’re positioned to weather the market’s swings.

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