We're sunsetting PodQuest on 2025-07-28. Thank you for your support!
Export Podcast Subscriptions
cover of episode Your Money Map Replay: The 2025 Economy and Your Retirement with Betsey Stevenson

Your Money Map Replay: The 2025 Economy and Your Retirement with Betsey Stevenson

2025/1/31
logo of podcast HerMoney with Jean Chatzky

HerMoney with Jean Chatzky

AI Deep Dive AI Chapters Transcript
People
B
Betsey Stevenson
J
Jean Chatzky
Topics
Jean Chatzky: 我关注的是如何确保在退休后有足够的收入来维持生活,即使活到100岁。养老金和反向抵押贷款可以作为长寿保险,在超过特定时间后确保收入。在60多岁或70岁出头时,大多数人不需要养老金,养老金是应对长寿风险的保险。 此外,我担心的是许多65岁及以上的人担心退休储蓄不足以维持一生,三分之一的人担心每月开支。我们需要关注的是如何帮助他们更好地规划退休生活,确保他们有足够的收入来源。 最后,我建议人们提前规划应对各种可能性,例如配偶过世或丧失行动能力。提前规划可以帮助人们做出更明智的财务决策,例如决定是否应该提前搬到离子女更近的地方,以便在需要时获得照顾。 Betsey Stevenson: 2024年美国经济强劲增长,就业参与率上升,企业创办率高,这主要得益于移民的增加。然而,2025年经济已接近峰值,未来可能趋于平稳或下滑。通货膨胀率虽然下降,但物价并未回落,这给许多人带来了经济压力。 通货紧缩意味着平均工资下降,大多数美国人都不希望出现通货紧缩。将物价降回原先水平非常困难,经济学家更关注的是稳定物价。尽管通货膨胀令人沮丧,但许多美国人即使在通货膨胀调整后也比疫情前境况更好。 美联储需要在经济放缓和通货膨胀之间取得平衡,决定利率水平。理想的通货膨胀率约为每年2%。零通货膨胀会给经济带来困难。 对于退休人员来说,最大的担忧是储蓄是否足以维持一生。许多退休人员的资产主要在房产中,他们需要探索新的金融产品来利用房产资产,例如反向抵押贷款或出售抵押贷款。 保证社会保障金在未来10到15年内不会减少至关重要。私人养老金在应对社会保障金潜在削减方面至关重要。养老金可以作为长寿保险,确保老年人有足够的收入。养老金或反向抵押贷款应在超过平均预期寿命后生效,以应对长寿风险。 人们不应该将65岁作为退休的唯一标准,而应考虑自身健康状况和预期寿命。保持身体健康对财务健康至关重要,因为健康问题会增加医疗支出。老年人应关注生活中的快乐,并提前规划如何保持这种快乐。理想的退休规划是“死时身无分文”。

Deep Dive

Chapters
The year 2025 started with a surprisingly strong economy, exceeding expectations. This growth has been attributed to various factors, including increased labor force participation and a high rate of business startups. However, this strong economy might be at its peak, posing the risk of stagnation or decline in the coming year.
  • The economy in 2025 is exceptionally strong, exceeding projections.
  • Increased labor force participation and high business startup rates contributed to the economic growth.
  • The economy might be operating at its peak, risking stagnation or decline.

Shownotes Transcript

Translations:
中文

So what you want to be thinking about with your annuity or your reverse mortgages is I want to pay to ensure that I have income if I live past a certain amount of time. You don't need an annuity for most people to be thinking about in your 60s or even your early 70s. Your annuities are going to be your insurance against

winning the lifetime lottery and living to be 100.

Oh, it's such a clutch off-season pickup, Dave. I was worried we'd bring back the same team. I meant those blackout motorized shades. Blinds.com made it crazy affordable to replace our old blinds. Hard to install? No, it's easy. I installed these and then got some from my mom. She talked to a design consultant for free and scheduled a professional measure and install. Hall of Fame son. They're the number one online retailer of custom window coverings in the world. Blinds.com is the GOAT. Shop Blinds.com right now and get up to 45% off select styles, plus a professional measure. Rules and restrictions may apply.

You know what's smart? Enjoying a fresh gourmet meal at home that you didn't have to cook. Meet Factor, your loophole in the laws of mealtime. Chef-crafted meals delivered with a tap, ready in just two minutes. You know what's even smarter? Treating yourself without cheating your goals. Factor is dietician-approved, chef-prepared, and you-plated. Pretty smart, huh? Refresh your routine and eat smart with Factor. Learn more at factormeals.com.

Hi everyone, this is Jean Chatzky, host of the Her Money podcast. It's 2025 and we officially have a new administration at the helm in Washington. How will its economic policies impact your wallet and more specifically your retirement?

Before we turn the calendar to 2025, I got together with Betsy Stevenson, a University of Michigan public policy and economics professor and former chief economist at the U.S. Department of Labor to ask that question. She recently joined me on Your Money Map, a show I host that is sponsored by the Alliance for Lifetime Income. From inflation trends to the impact of tariffs, we covered a lot of ground and Betsy shared her top tips.

on how to prepare for changes that could be coming down the pike, especially with the administration we now have in place. It's an episode packed with important information you won't want to miss. So keep listening and be sure to check out the rest of the amazing work being done by our friends at the Alliance for Lifetime Income at protectedincome.org.

Betsy, thank you so much for joining me today. Welcome to the program. It's great to talk to you. So it is 2025. As I said, what are your predictions for the economy in the coming year?

Well, we have had really just a miraculously strong economy for the last two years. Growth has exceeded the projections. So we've just seen more people are participating in the labor force. We've had businesses start at a really high, unusually high rate that honestly has left a lot of people perplexed. What happened?

propelled so many new people to start businesses and hire people. One of the things we know is when one

kept the momentum going in 2024 was that we had a lot of immigration. Not, you know, you hear a lot about undocumented at the southern border, but it's really the whole pool of immigrants that are coming through documented and undocumented. We had had such a decline in the immigration during the pandemic that, you know, there was one point where

where, you know, I think that was a big concern that that would really slow the U.S. economy down, that people flooded back into the U.S. So when we look at 2025, what I see is a very strong economy, but one which has been really operating at its peak.

And so no matter who had come into office in January, you know, my concern is like when you're when you're operating at your peak, you're doing the best you possibly can do. There's kind of only one direction to go. And that's, you know, we can stay the same or we could go down. And I think that it'll be interesting to.

to see how the incoming administration reacts. Because this is very different from when President Trump came in and took the oath of office in 2017. We were on an economy that had a very strong upward trajectory. And we can now look at that data in hindsight, and we can see that that sort of upward trajectory started around 2015. So we had this pivot. The economy started growing much stronger. Labor force participation started growing much stronger.

2015, 2016. And that momentum continued all the way through the start of the pandemic. And that's a very different economy to be coming into one that's on the upswing with still actually a lot of room to hit what people think of as potential. Right now, we're really at a place that is as good as it can get. So why don't I stop there? And then we can sort of talk about what those those risks are and what that may mean for different people.

Yeah, it's interesting because it's as good as it can get. The data that came out around the election showed that a lot of people don't necessarily feel that it's as good as it can get. And one big reason for that has been inflation, which although the inflation rate has come down significantly,

Prices themselves have not, we haven't had deflation, right? Prices have not gone back except maybe in the case of gas to where they were. So let's take apart some of these individual factors. Let's talk about inflation and interest rates and unemployment and where we see those things falling. Right. So inflation is very tricky because inflation

It's really hard to have deflation. In fact, you pretty much most Americans wouldn't want deflation because what deflation would be would be basically people getting pay cuts on average, right? Because inflation is a generalized increase in the price level, which includes the wages and the incomes, right? Everything we spend is somebody's income. And so when prices are coming down, that means somebody's incomes are going to have to go down.

One of the things that made inflation so painful was it happened so rapidly. We had inflation peaked at 9%. In other words, prices jumped up 9% in a one-year period. And that's a lot. We're not used to that. And a lot of people would like to see the prices go back down, but they're

Bringing them back down is really, really tricky. And so what economists tend to focus on is just stabilizing at this new price level where we're earning what we earn and we're not having prices go up any higher.

And what we have seen is for most Americans, adjusting their wages for inflation or their portfolio for retirees or their house prices, people are better off even in inflation adjusted terms than they were prior to the pandemic. I think one of the things that feels really bad for people is you're like,

Finally, I got a break and my portfolio went up, my house price went up, my income went up, but now, darn it, the prices went up so I can't really buy much more than I could before. And that's frustrating because you'd really like only one end of that to have happened. Unfortunately, these things are somewhat unbearable.

you know, very intricately tied and you don't get to divorce them in quite the way I think people would really like to. So I think it's very hard to get used to this idea that we had inflation that was something we're not used to. And when you think about it, prices go up a little bit every year and we sort of don't pay that much attention. You know, I had this experience this weekend. I went and bought a dozen bagels from Brugger's Bagels

And I was like, what? $19? I know. It was just like $12. I know. When did it start costing $2 a bagel? No, I've had the same bagel, same exact bagel experience. And then when I thought about it, I realized part of the problem is that I'm old enough to remember when it was like $12 and you got a baker's dozen.

And what happened was every year it crept up 15 cents, 25 cents, 40 cents. And I just didn't really pay that much attention. So it, you know, creeps its way up to 15 and I'm not paying that much attention, but then it jumps up $3 and I'm like,

wait, now you've got my attention. But there's also part of my brain that's remembering where it was 15 years ago instead of remembering where it was five years ago. So I'm not... It's very mathematically hard for me to say...

oh, if we just had normal inflation, it would be $17.50 instead of, you know, 19. And I think that's just very hard for people to do that kind of math. You know, I have in my Principles of Economics textbook, I have an entire section on why you really don't want inflation to be zero. Inflation at zero is very, very tough.

It's tough because it means that anytime a business slows down, they really need to lay people off rather than just saying, you know what?

We're going to hold off on raises this year, which is effectively a pay cut. But we know that people do a lot better not getting a nominal raise than being told we're going to cut your pay. And so what we see is when inflation is very, very low, lots of things get clunky in the economy and businesses are...

slower to create jobs and faster to cut jobs. There's been studies of this all over the world.

You kind of want inflation around 2% a year. It just makes everything work better. That's why the Fed aims for an inflation of 2%, not zero. There's also actually some evidence that 2% inflation is sort of overstating things because we forget when we get new goods, like we got a smartphone and it had a camera and it has the internet.

and it replaces a whole bunch of things, we don't actually put that into inflation and then say everything got cheaper because we got smartphones.

So we tend to under adjust for quality in lots of different ways, right? We under adjust for improvements in medical care. We just look at the prices. We don't look at the price for outcome. So that's another reason we like to have a little bit of it, of inflation. So we don't want it to go to zero. We definitely don't want it to go negative, but we would like it to be around 2%. It's not at 2% yet. It is...

You know, it's a little bit higher than that. It's sort of bouncing between two and three. The reason I point this out is, you know, it's the Fed is going to have to make some pretty serious decisions about where to keep interest rates. We've got a slowing economy and we have inflation that is still running a tiny bit hotter than what they'd like.

How are they going to balance those trade-offs? Are they going to cut interest rates more to try to make sure that the economy stays robust? And there's a reason we want an independent central bank, because we don't want a president who is...

is trying to cause inflation in order to keep rates low today. That is a real temptation. So actually how we ended up with the messy, messy inflation situation we had in the 70s was that there was pressure on the Fed to lower rates before inflation had been beat.

And that political pressure, the Fed caved into it. And then we saw this whole period of stagflation result from that. So I think hopefully everybody will keep that in mind as Trump's trying to put some pressure on the Fed that the Fed should make these decisions independently. You know, we have another challenge, which, you know, there's always a little bit of a gap between what President Trump says he's going to do and what he does because, you

What he says he's going to do isn't necessarily going to have the outcomes he wants. And I do think at the end of the day, he looks at what the outcomes are and he'll reverse course or change course to get the outcomes. He's coming in as president in a at a time when the economy is sort of operating at potential. So it's going to be hard to get the economy to be any stronger.

He's already done the tax cut and jobs act. His problem now is that parts of it are expiring. So what he's going to be trying to do is fight for the thing he had in the past, rather than doing some new tax cut to try to stimulate corporate businesses. He's going to be trying to prevent a tax increase that is going to happen automatically by law, unless he succeeds in preventing that. So,

I want to get specific about it, about the retirees that we talk to on this show. This show focuses a lot on what the Alliance for Lifetime Income has called the peak 65 generation, peak 65 zone. This is a time when we've got 4.1 million Americans turning 65 every year through 2027.

Research from the ALI shows that nearly half of them don't think that their retirement savings and their sources of income will last their lifetime. A third of them are worried about monthly expenses. And so all of this talk about tariffs, right, and raising prices is particularly scary.

yes, social security has a cost of living adjustment, but social security is not the sort of be all and end all for this entire generation. When you look at people who are either in retirement or heading to retirement, what are you concerned about for them? And what sort of moves do you think they should be making? I,

I think that there is just such a wide range of people, financial circumstances and that age. Obviously, the concern is, do you have enough set aside in savings? And are you ready to retire? When we look at what's happened recently,

for the price of houses. We often hear the big rise in housing costs as a story that is bad for Americans, but the reality is a large fraction of Americans own their own home, and this is great. For a lot of middle-class retirees, most of their assets are in their home. And

And I think a lot of them are going to have to figure out how they tap into that. You know, looking at products, I think we're going to have to be looking at much more financial innovation products to help people take advantage of that, whether it's reverse mortgages or whether it is being able to sell your mortgage along with your house so that you can get into that retirement community you want to get into, but you can have

Take advantage of the fact that you locked in at a 3% mortgage rate and you want to be able to sell your house to someone who is going to pay to not just get your house, but to get your 3% mortgage. That product does exist. I think a lot of people aren't aware of it. So I think it's trying to figure out how to get the most out of your house because that's going to be pretty much the biggest asset a lot of these people have. And for, again, all the sadness of the inflation over the last four years is

For a lot of older Americans, that inflation ended up being a net good because they were homeowners, not renters. And so even though in the data it shows that they are paying more in implied rent to live in their house,

What they really have also is their house is worth more, and that's going to be really useful for them as they retire. And we've also seen the stock market really go up and it's strong economy and the fact that nominal prices are higher. So the stock market keeps up with inflation. So it also depends on where your assets are and what you've saved. I

I think one of the big concerns will be, you know, if you're turning 65, I hope you got 25 years in front of you. And that's why you're worried that your savings are going to run out. And I think the biggest thing there is we are going to have to make sure Social Security doesn't experience cuts in the next 10 to 15 years. And so we're going to have to be really careful that we don't prioritize cuts.

Social Security in 2025, 2026 at the expense of it in 2035, 2036. Because...

If you even think of some of the proposals like let's not make Social Security income taxable, we do that. What we know is we're going to see benefit cuts earlier unless there's some major reform passed. And what we also know is what you really need is your Social Security benefits after the age of 75 because...

Because it's that living, living, living, which is fantastic. And I hope everybody gets that. But it's when you start to run out of money. And so I do hope people are looking at annuities because I think private annuities is going to be really important given the uncertainty with potential cuts to Social Security payments in 10 to 20 years. When you say that you hope people are looking at private annuities, what kind of

kind of annuities, how would you suggest they use these products, right? We know that people also need market growth. That has shown to be incredibly important. But we tuned into one of the recent podcasts that you did with Justin, and you were talking about this.

phenomenon where people save and save and save for retirement and then they turn around and they don't spend their money, right? They're not spending down out of fear. They're not spending down because they're afraid that the money is going to evaporate before they run out of time. And also because there's this crazy perception that we should never spend our principal.

So annuities go a long way to solving that problem. But I think a lot of people, as with the reverse mortgages you were talking about, are really not sure how and when to use them. Well, I think the thing to think about is what you want is insurance against living a long time. That sounds so weird, right? It's insurance against a good thing. But the problem is that when you live a long time, then you need a lot of money. Right.

Because each year you want to be able to spend more. So what you want to be thinking about with your annuity or your reverse mortgages is I want to pay to ensure that I have income if I live past a certain amount of time. You don't need an annuity forever.

For most people to be thinking about in your 60s or even your early 70s, your annuities are going to be your insurance against winning the lifetime lottery and living to be 100. And so what you want is to make sure that you have a portfolio where your insurance in the form of annuities or reverse mortgages is kicking in once you sort of passed that

median life expectancy. And then you should be thinking, you know, then you can think about, okay, if my annuities are going to take care of me when I live a long time, I can actually spend more of what's left in the years when I'm going to be most active, perhaps in my 70s. I think the other thing people really have to be asking themselves is when you said like, you know, 4 million people turned 65, 70 is the new 65. Yeah.

So you don't necessarily want to be thinking, I'm 65, what's gone wrong with my life if I'm not retired? You actually do want to think about your health. I want to think about how do I transition and what do I think my longevity will be and how do I want to spend those years and how much money do I have to spread across it?

I know a lot of times people say, well, the thing about leaving my principal is that I know that I'm leaving something for the people I care about that I'm leaving behind. But at the same time, I do think a lot of people end up underspending. I always say in hindsight, if I could go back and give money to my grandparents, I would.

Because they had a much lower standard of living than I've had at any point in my life. But yet at the same time, they died with a lot of their principal intact and left inheritance for their children and their grandchildren. And not a big inheritance, but it really was left their principal behind. They were trying to live off of the earnings of

And I wish they had structured it in a way that, you know, to me, the ideal thing is to go with nothing.

The die broke, as the famous book said, right? Yeah, the goal should be to die broke. And you know, God bless the bank that told my mom, my mom and dad refinanced their mortgage in their late 60s to take a low interest and to lower their payments. And they refinanced for 30 years. And my mom said to the bank,

I'm not going to live long enough to pay off this loan. I feel really bad taking it out. And the woman said, Tony, you can't take the house with you. We'll get it when you go, if it doesn't get paid off. Oh my goodness.

But it gave them a much better standard of living throughout the rest of their life. Yes, exactly. And so it's difficult to do right now because mortgage rates are high. But if mortgage rates go low again, and you can get a rate as low as what you currently have,

If you're a few years away from paying off your mortgage, just refinance that thing. Take the equity out of your house, give yourself a lowish payment, and then put the rest of that nest egg somewhere. You can do your own reverse mortgage as long as you're not gambling with it and lose your house. But I mean, this is the big mistake I see people make is they die with...

100% paid off house that is worth a half a million dollars or more

And they should have been eating that house all along. As we sort of head into the tail end of this conversation, Betsy, what are the things, if you were to give a list of just a few things that you think people in this age group should be thinking about or doing in the next couple of years to set themselves up?

for that solid retirement? I mean, I'll tell you what I tell my parents. It's exercise. If you can stay physically active and you don't fall, then we spend less money on caretakers. So it's a really important thing to realize that investing in that physical health is also investing in your financial health.

Because a lot of the money you're going to spend in your later years reflects the health needs that you have. If you don't take care of yourself...

Physically, it's not like you're going to keel over at 75. You're still going to be alive. You're just going to be less mobile and you're going to need a lot more care. You're going to potentially need to live in a retirement community that can care for people who are weaker, who are more fragile, who use a walker. And that's really expensive. So even though it seemed like I was being facetious when I said exercise, I just think these things are really, really connected. Yeah.

No, I totally agree with you. I wrote a book called Age Proof with a doctor and the subtitle was living longer without running out of money or breaking a hip. And you need to be able to get yourself up off the floor if you fall. My mom died in her 80s, but before she died, she was seeing a trainer twice a week.

Right. So, I mean, investing in a trainer today can mean you might say, well, gosh, should I spend a hundred bucks a week on going to a trainer? But it might mean that you save a hundred bucks a week later down the road and not having in-home care. And you're also healthier and happier. So even if you broke, even if it came out even, you might be ahead when you put the whole thing into perspective. So I think

that that is actually really important. And then I think the other thing is you have to really think about all the different possibilities. What would you want to happen if you lost your spouse early? If...

you went first if you do become immobile? Do you want to live near your kids if you need care? Thinking through these things can be so painful and hard, but it can allow you to make decisions early on. You know, if you live a thousand miles away from any of the family that would look after you as you age and need more assistance, you might want to move closer when you still have time to

to build friends and community in this new place you're going to live because it's pretty miserable to move and then be reliant on family with no peer friends or no real access to the community. So trying to think in advance of what you need to do. And then that can also help you figure out things like how much should I be spending today?

How much do I need to be putting into an annuity that will insure me against living a long time? How long should I stay in my house? Should I downsize? All of these are questions that you need to be able to answer.

ask yourself and really make a plan. And so I think the biggest mistake people make is these things are hard to think about and things that are hard to think about people often procrastinate. But unfortunately, every morning when we wake up, we are a day older.

and a day behind on something we probably should have done the day before. It is all about thinking about probabilities, which I know is not natural for everybody. And then what would you want to happen in that particular state of the world? And what would you need for that? And then you can start to back out a real plan. I'll tell you some advice the veterinarian gave me.

We're thinking about my dog towards the end of his life. She's like, before...

My dog is now a large breed, 14-year-old dog. So he's pretty old. And she said, before he really starts to age, think about what brings him joy in life and then figure out how you're going to continue to be able to provide that. And I think there's something that's very similar for people. Think about what brings you joy in life is...

If you're social, you're going to need to figure out how do you stay social? If you like to read, how are you going to be able to continue to do that? Particularly if you're losing your eyesight, do you switch to audio books? The earlier you make the change, the easier it's going to be to adjust. So try to make your changes early by anticipating where you need to go to keep the joy in your life.

Fantastic. Happy 2025, Betsy. Thank you so much for doing this with us today. Well, happy 2025 to you and your listeners.

And everyone should go check out Betsy's podcast. It is called Think Like an Economist, something we should all try to do on a regular basis. If you love this episode, please give us a five-star review on Apple Podcasts. We always value your feedback. And if you want to keep the financial conversations going, join me for a deeper dive.

Her Money has two incredible programs, Finance Fix, which is designed to give you the ultimate money makeover, and Investing Fix, which is our investing club for women that meets biweekly on Zoom. With both programs, we are leveling the playing fields for women's financial confidence and power. I would love to see you there.

Her Money is produced by Haley Pascalides. Our music is provided by Video Helper and our show comes to you through Megaphone. Thanks for joining us and we'll talk soon.