MrFireStation posted: " We've had a new round of bad economic news, but I can't get too excited about it, even though it seems like a pretty severe storm. I think I've fallen victim to "bad news fatigue" after two years of the pandemic, rising inflation & interest rates" MrFireStation
We've had a new round of bad economic news, but I can't get too excited about it, even though it seems like a pretty severe storm. I think I've fallen victim to "bad news fatigue" after two years of the pandemic, rising inflation & interest rates, and declining investments.
Just in the last couple weeks …
⁃ The stock market erased all the gains since Biden took office
⁃ The Fed hiked interest rates another 75 bps (and threatened more)
⁃ Inflation stayed higher (8.7%) than experts predicted in August
⁃ Housing prices fell in 98 markets around the country
⁃ Corporate earnings have been coming in soft across industries
It seems like every day has some awful economic headline, yet I haven't spent any time figuring out what they have all added up to in terms of negative impact on our retirement portfolio. We have a meeting with our financial planner next month, so I guess I will be forced to reckon with how much we've lost (on paper) at that point.
It's times like these that I am glad that I have a big cash cushion. We typically carry about 2.5-3.0 years of spending in cash. This year we have even more, since about 40% of our annual spending is now covered with MegaCorp pension checks. I started taking those this past spring. This should be a cause for cheer, but my pension doesn't have a cost-of-living-adjustment, so I'm already thinking that high inflation has already shortened the pension's value by 2-3 extra years.
At some point, this recession will lift and maybe my financial enthusiasm will return. For now, I'm just weathering the storm and will try not to get to frustrated with our paper losses. Instead, I'm just enjoying the early autumn weather, football games, and outdoor activities before it gets too cold.
How closely are you watching the headlines? How much of a cushion do you carry in retirement?
Image Credit: AI-developed image using Midjourney Bot
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