Steve S.: Tonight more evidence that a soft landing is possible. You're listening to "Simply Money," presented by Allworth Financial. I'm Steve Sprovach, along with Steve Hruby. All right, so the so-called experts, they've been calling for a recession in the first quarter of this year. When that didn't happen, they said, "Ah, second quarter's a definite." At one point, Fed staff members said, "Well, no, it's gonna happen in the fourth quarter." Now they're saying maybe next year, maybe not even.

Joining us tonight is Allworth Chief Investment Officer Andy Stout to make some sense of it all. And Andy, it surprises me, we haven't had anything even close to a recession, although I was concerned about the inflation numbers that came out about the middle of last week. You know, we've been seeing most of the inflation numbers come down considerably, yet there was a bump up last week and markets didn't... They kind of shrugged it off. I'm a little concerned. Tell us what came out, what the numbers look like, why they make sense, or don't make sense in "Simply Money" terms.

Andy: Well, looking at the inflation data, and we got a lot of data last week, Steve, on the inflation front, we got consumer inflation, which is commonly referred to as CPI. There's producer inflation, which is PPI, also got some inflation expectations. Now, CPI, that's gonna be the most important one, the most closely watched for a number of reasons. Now, when we look at it though, it's showing, I'll just kind of bottom line at first. It's showing that inflation momentum is slowing. So, that's a good thing.

Steve S.: That's good. [crosstalk 00:01:45.113].

Andy: We do because that means the Federal Reserve, our nation's central bank, which raises and lowers interest rates lately, has been raising them very, very aggressively. If they believe that inflation momentum is slowing and they think, you know, they've done their job, they'll stop rate hikes, right? I mean, we got the next meeting on September 20th, and the forecast is for no move. There's only like an 11% chance that the Fed would hike rates. But anyways, getting back to your question, Steve, on CPI and inflation, it increased 0.2% on a month-over-month basis. That was both the total...

Steve S.: That's a pretty big blow.

Andy: ... inflation number.

Steve S.: Yeah.

Andy: Point two percent? No. That's pretty, that's not bad. That's relatively small. So, we'll take the 0.2% increase, that was in line with expectations, and that's both headline and core inflation, core excludes food and energy. And we'd like to look at that because it tends to be pretty volatile and somewhat out of the control of the Federal Reserve. But on a year-over-year basis, what's high, core inflation is still at 4.7%. So that's the big number on a year-over-year basis. The headline number, headline inflation or total inflation is at 3.2%. It's brought down because of energy prices. And that's why the headline is lower than the core. But when we exclude food and energy, it's 4.7%. So that's not a great number

Steve S.: Producer price index, though, that's kind of wholesale prices. They were up even more, 0.3%. Again, it's not a massive increase, but to me, okay, if wholesale inflation is up a little bit, well, maybe that means down the road inflation is going in the wrong direction, which is something we obviously don't want. You're not concerned about that number either.

Andy: Well, I think that number from the producer inflation or PPI was less encouraging. It did increase a little bit more than what was expected. I don't know if it's gonna feed too much into CPI, you know, when you look at the broad picture on the slowing momentum, you know, just to give you an example, like on the consumer prices or CPI, when you look at the last three months of core CPI and we annualize it, it's at 3.1%. That's not bad. That's not bad at all. So, you know, that sort of number, when we can get an idea of how it's trending, you know, that's something that's definitely a good indicator and moving in the right direction.

And the last thing on the inflation front I like to think about and look at is consumer expectations. And we got the University of Michigan's consumer sentiment survey last week, and it showed that consumers' one-year inflation outlook fell from 3.4% to 3.3%, and the 5 to 10-year outlook fell from 3% to 2.9%. Now, this is really extremely, extremely important because it tells us that inflation expectations are anchored, meaning people don't expect high inflation to continue. That's really crucial because high inflation expectations can be a self-fulfilling prophecy. In other words, if people expect high inflation, then it often manifests. That's because consumers pull forward purchases to buy things before prices rise. And often businesses will raise prices sooner in anticipation of that and also to improve their margins if they think inflation is going to be a problem down the road. So, very good news last week from the perspective that inflation expectations appear to be anchored right now.

Steve H.: So, I was looking at an article, Andy, that talked about a no-landing scenario. We've been talking about soft landing, hard landing, but this no-landing scenario hypothesizes that inflation's gonna flare up early next year. What do you think about that? What's your reaction?

Andy: I think the economy is, you know, it's obviously been held up by the consumer and we've had, you know, strong growth from a GDP, which is our total economic output or gross domestic product. You know, this year, like, you know, you were saying at the very beginning that GDP was expected to contract by a lot of economists keeps getting pushed out. We ended up growing, you know, 2% in the first quarter, 2.4% in the second quarter, third quarter is currently tracking positive. And, you know, a lot of economists have certainly pushed back or out completely a recession this year into maybe next year, maybe not next year.

And if things kinda stay in this no-landing scenario, yeah, maybe inflation could flare up. That's not necessarily our base case scenario that we see that sort of situation happening. Because I don't see the Fed cutting rates anytime soon, right? I don't think it happens at all this year. Maybe not even the first half of next year. We'll have to see how the data comes in, but I don't think with interest rates as high as they are, that you're going to see a big inflationary spike.

I mean, anything's possible, but I think it's more likely that the interest rates where they're at right now will continue to weigh on consumers. And you might see the consumer momentum really start to wane a bit more. You're already seeing that a little bit in some of the data like retail sales, which we'll get tomorrow, where it's starting, the year-over-year number has been trending lower for the past couple of years. So just kind of showing things are starting to pinch.

And if you look at a release we got last week on consumer credit outstanding, there's non-revolving, which is like loans for cars. Then there's revolving, which is credit cards. The non-revolving came in really strong, but the revolving credit, which is people basically spending on their credit cards, decreased 600 million, which was the first decrease in two years, that signals that consumers might be tightening their belt. And that does not bode well for that no-landing scenario where you see an inflationary spike.

Steve S.: Well, that would be interesting. You're listening to "Simply Money" on 55KRC. I'm Steve Sprovach, along with Steve Hruby, and if it's Monday, we're talking to Andy Stout, Chief Investment Officer of Allworth Financial. Hey, Andy. We've been talking about rate increases and it looks pretty good that the Fed in September is gonna hold tight and not do any rate increases. How about rate cuts? I mean, you mentioned you don't see it happening in the immediate future, but I just read this morning, Goldman Sachs is expecting by June of '24 that the Fed may start one-quarter of a percent rate cuts. Do you buy into that?

Andy: I think a lot of that will depend on two things. One, where is inflation at? How has it evolved between now and basically the next 10 months? That's a lot of unknowns to take into consideration. So not just the inflation evolution, but the second thing is, does the economy fall into recession? I mean, if you look at leading economic indicators, they do suggest that risk is elevated. What leading economic indicators are, by the way, are data points that move before the broad economy moves. So when we have our own suite of leading indicators that we look at, and they do show that risk is elevated. So if you have a recession and inflation appears to be, you know, no longer an issue, that's when I think you'll see rate cuts.

Now, it's possible we could get to the point where inflation is no longer an issue and we're still growing, and you could still see rate cuts because the Federal Reserve believes at that point, possibly, that we don't need to have restrictive interest rates as they currently are. But if you look at just what the market's pricing in, you know, Goldman is basically saying what the market's expecting. Because if you look out to the middle of next year, the market's pricing in a one-quarter point rate hike by the May meeting, not the June meeting. So the market's a little bit in front of Goldman, but that's what's being priced in. But remember this, Steve, at the beginning of this year, there were rate cuts priced into the market in the second half of this year. That's [crosstalk 00:10:08.947]

Steve H.: I remember that. How things changed. Let's talk about earnings for a minute, Andy. So second quarter earnings came out, what have the numbers shown us?

Andy: Well, they've kind of been just like almost every other earnings season from the perspective that companies tend to lower their estimates and then Wall Street lowers their estimates, and then companies...

Steve H.: Funny how that works [crosstalk 00:10:32.959]

Andy: ...pick those lowered estimates, right? It's a game, right? And if you look back over the past five years, basically 75% of companies have beaten those estimates. So that's the game they play. And what we see this quarter is the game continuing where you have 80% of S&P 500 companies, which are your large-cap companies, reporting better-than-expected profits. So we're seeing more of the same from that perspective.

And if you look at the actual earnings growth rate, it's a similar story where you see the expected earnings growth rate compared to what actually happens. And you see a beat there. So heading into earning season, Wall Street was expecting a 9% decline on a year-over-year basis. Now, where we're actually at, because we're about 90% of the way through earning season, there's only another roughly, you know, 50 companies, large-cap companies still to report. And right now, earnings are 6.8% lower, so not nearly as bad as that 9% decline.

Now, if we take out energy companies, because really the drop in oil over the past year, I don't know if it's gone up here recently, but if you look at, you know, second quarter of '23 compared to the second quarter of '22, that really hurt energy companies. If we exclude energy companies from that equation, earnings are only 0.4% lower. So again, large-cap companies, excluding energy companies, their earnings are only 0.4% lower. That's basically flat on a year-over-year basis. So it's not as bad as the headline indicates once you actually dig into the weeds a little bit.

Steve S.: Oh, great advice from Andy Stout, Chief Investment Officer of Allworth Financial. Here's the Allworth advice. Don't waste too much time looking into all the headlines out there. We got you covered right here. Coming up next, we just got the dollar amount that retirees could lose if Social Securities Trust Fund runs out of money. We'll talk about that next. You're listening to "Simply Money" on 55KRC, THE Talk Station.

You're listening to "Simply Money," presented by Allworth Financial. I'm Steve Sprovach along with Steve Hruby. Hey, if you can't listen to "Simply Money" every night, just pick up our daily podcast the very next day. If you think your friends could use some financial advice, tell them too. Just search "Simply Money" on the iHeart app or wherever you get your podcasts. Straight ahead at 6:43, what could be the scariest part of retiring and how to overcome it? All right, Hruby. So, the Bengals, I mean, they've gone through their 30 years in the desert, and they're back with Joe Burrow. And financially, this is a whole new, I hate to say it, ball game.

Steve H.: Oh, I see what you did there, Steve. So, what you're talking about here is the news came out that they're actually worth $4 billion.

Steve S.: This is incredible. That's a big number.

Steve H.: Well, yeah, I mean, it depends on what you're comparing it to, because, you know, I will give credit where credit's due. Cincinnati tied for second with a 41% increase in value. This is along with the Las Vegas Raiders. Only Detroit actually had a higher percentage bump last year in 2022. So, this is the Burrow effect is what I would say.

Steve S.: Well, no question. But the Las Vegas Raiders, they're a brand new team, so they went for basically zero. Okay. So, all right, those numbers are a little bit skewed or spun. Detroit in the basement forever, you know, but what amazes me is that the value of the Bengals increased 41%, and that raised us to number...

Steve H.: Last place.

Steve S.: That's mindboggling, that tells you how bad and how low-value the Bengals have been for years and years. That jumping by almost half, again, in value still keeps them in last place.

Steve H.: Yeah. I mean, for now.

Steve S.: You're a Browns fan.

Steve H.: I'm converting, you know.

Steve S.: Are you?

Steve H.: Yeah, I think I am. You know, it's a good time to hop on the bandwagon. Living in town. I've lived here since 2007. It's nice to be able to go to the games and Burrow is a lot of fun.

Steve S.: Honestly, he really is. And everybody knows even other parts of the country. I was out on the East Coast this past week, they were asking me about Burrow. Is he done for the season? I mean, which obviously he's not, but you know, everybody knows Burrow, which means everybody knows the Bengals, and it's kind of fun.

Steve H.: Yeah.

Steve S.: There's no question about it. But with that said, the Bengals are still the least valuable NFL team, although $4 billion is a good number. All right. So it's a huge issue. Congress needs to figure this out. What are they gonna do about the Social Security Trust fund? That's the fund that pays out money to those that are eligible and interesting research. We now have a dollar amount of what retirees collecting Social Security would lose in dollars and cents if Congress doesn't address this.

Steve H.: Yeah, so I wanna shine light on the fact that this is, if Congress doesn't address it, and it is scary. This analysis was done for, it was done by the committee for a responsible federal budget.

Steve S.: Great name.

Steve H.: Yeah, I know, right? And they actually calculated that hit that it would take. So, a newly retired dual-income couple on average would see a drop, a drop of $17,400 per year.

Steve S.: That's a big number. It's huge. It's 1,450 bucks a month. I mean that's a lot of money that otherwise could be going into the economy, could be going towards a vacation home, could be just for gas and food. I mean, that's a lot of money and that's a big drop. This is serious.

Steve H.: Yeah, it is. And, you know, for those that have earned more money over the span of their careers, they could drop $23,000 in benefits. Those that are depending mostly on social security, haven't been particularly high earners over the span of their earnings $10,600 less per year.

Steve S.: Well, and the trust fund is the excess money that is really not there, which is the scary part. But it's all demographics. The reason for the problem is when Social Security was formed in the 1930s, there were about 40 workers paying in for every retiree. And the average age of death was 65. Which happened to be the age you would collect your benefits. Now it's two-and-a-half workers for every retiree, and the average age of death is well into the 80s. So the numbers obviously have changed over the years. So, you know, you've gotta do something. There have been a lot of proposals. I mean, there's been 172 proposals brought in front of Congress since 1993. Not one single one of them has been brought up for a vote, but there are some things that can be done that can fix this, or at least partially fix it.

Steve H.: Yeah. I guess the issue there is that Americans don't trust Congress.

Steve S.: Well, and give us a reason to. Right?

Steve H.: I know. Rightfully so. That's the reason why Fitches brought down the ratings last week for our debt, is because there's fighting within Congress every time we hit that ceiling. So, you mentioned it, 172 proposals. None have come to fruition.

Steve S.: But you know what to me, the quickest fix is, most people have not heard of this because most people don't make this kind of money. There's a cap on how much money you can make that you're gonna pay social security tax on. Anything in excess of that number, which is $160,000, you don't pay into social security.

Steve H.: Yeah. So if you look at your pay stub, you'll see the OASDI. That's Old Age Survivors and Disability Insurance. You pay 6.2% into that, your employer pays 6.2% into that. That's what fund Social Security. Smash the cap means if you're making more than $160,200, you have to continue to pay that benefit. Right now, we don't.

Steve S.: I know.

Steve H.: During a time when we're running out of funding.

Steve S.: I never really got that. Why is there even a cap on it? But you...

Steve H.: Because there's a cap on the benefit that you can receive from Social Security. That's...

Steve S.: But politically, this is a gimme. I mean, okay. We need to do something about Social Security. Remove the cap. I'm not a big fan of increasing taxes by any stretch of the imagination, but if we're talking about a $17,000-a-year cut in benefits and how to fix it, this keeps it solvent for another 13 years.

Steve H.: Yeah. Medicare has its own tax that's not capped and actually goes up at a certain income threshold. Alternatively, for not raising taxes, then it has to be raising the retirement age. Look what just happened in France though.

Steve S.: Yeah, that'll go over real well.

Steve H.: Yeah. Bump it up to 70. Or there's means testing, which, obviously, isn't gonna be popular by any stretch.

Steve S.: I don't want that to happen at all. Here's the Allworth advice. Social Security is not meant to be your primary source of income in retirement. I hope you've got a financial plan that includes Social Security for just some of that income. Coming up next we analyze the financial pitfalls that could be on the horizon for millions of teens heading off to college. You're listening to "Simply Money" on 55KRC, THE Talk Station.

You're listening to "Simply Money" presented by Allworth Financial. I'm Steve Sprovach, along with Steve Hruby. It's that time of year. Teens are heading back to college, and with that, yeah comes a danger of... Wait, college kids making financial mistakes? Unheard of. Let's take a look at some of the traps that you might wanna talk to your kids about not falling into.

Steve H.: Yeah. I'm not sure how many college kids are listening to our show right now, but for the parents that have kids going back to school, these are some important topics to sit down and have a chat with them about.

Steve S.: They're not gonna listen to you.

Steve H.: Well, it's worth a try anyways.

Steve S.: I mean, parents might, but kids aren't gonna listen to their parents.

Steve H.: Yeah, I mean...

Steve S.: They're thinking about parties and going to college and having a good time.

Steve H.: Ain't that the truth? But unfortunately, the reality of it is that many of us, you know, we've borrowed, a lot of our children have to borrow for college, so understanding the true cost of college goes way beyond just tuition, room and board. There's monthly budgets that can spiral out of control if you're not careful. Clothing purchases, food deliveries, you know, there's apps that just make it so easy to get whatever you want right now.

Steve S.: Yeah, if money is not a question, but, you know, for most college kids, money's a big question.

Steve H.: Yeah, it sure is. And these costs, they can run to several extra thousand dollars a year that maybe weren't accounted for if you didn't have this conversation with them.

Steve S.: So, I'm reading an article in "The Wall Street Journal." My favorite paper by far, and their first bit of advice is, yeah, kids you're going to college, you should set a budget. I'm just thinking back to when I was in college, nobody had a budget. Nobody had a budget. You're just out there. You're winging everything, even if you're one of the smarter kids and scrimping and saving and, you know, paying your own way, a budget for going out, a budget for, you know, food, and it doesn't happen.

Steve H.: Yeah. Well, I'll find a way to make it work. It's kind of the attitude.

Steve S.: Well, yeah, exactly. Exactly. And along with that, point number two is let's track your spending. That's pretty tough to do in college when you're out till maybe 2:00 in the morning on a Thursday night. And how much did I spend? I think I had a $20 bill, you know.

Steve H.: Yeah. There's a website, best colleges.com, it's owned by Red Ventures, and they have a sample budget that you can sit down and look at with, you know, children that are heading off to college to help them track it. Funny enough, though, they don't actually have a line item for beer money.

Steve S.: Imagine that.

Steve H.: I know.

Steve S.: Well, in my case, I worked, I mean, I worked at a restaurant. I was a waiter and did that all four years, average 20 to 30 hours a week on top of a full course load.

Steve H.: Yeah, me too.

Steve S.: But yeah, you worked your way through college too. I'm aware of that. And if it weren't for that, I wouldn't have been able to go out or do anything because every dime was, you know, either borrowed or worked for, or whatever. And tuition, and books, and room, and board takes a big chunk of money.

Steve H.: Well, that was one of the benefits of working at a restaurant in college is that you get to eat. I worked at a liquor store in college.

Steve S.: I won't ask what you did with the excess inventory then. All right. So, one of the things that did strike me though, and this is legitimate. The credit card companies are waiting for you when you show up on campus. Hey, grab our credit card. We'll give you this bucket hat, or we'll give you, you know, something worth about $2...

Steve H.: Something really stupid.

Steve S.: ...and now you're hooked for life. That can get you in a lot of trouble.

Steve H.: I had a friend that came up to me while I was eating in a food court in college, and she's like, "Oh, you should enroll for this credit card, and then you can just cancel it. And I'll get paid and nothing will happen to you." Oh, thanks, Lucy. I appreciate that. Because ultimately if you do that, if you use it, first of all, you can get yourself in big trouble if you don't have the cash flow to support paying off the credit card. If you don't, then that's a ding on your credit. Opening the credit card and not using it. So that is something to be mindful of and it will happen.

Steve S.: And you're gonna miss a payment in college. I mean, you just don't pay as much attention to that kind of stuff as you do later in life. So, you know, if the whole idea is build your credit, I'm not sure that's the best way of doing it. If you do sign up for a credit card, pay attention to it. Pay it off every month, and be very aware of what you're charging to that credit card, because it gets away from you quickly. You're listening to "Simply Money" on 55KRC, I'm Steve Sprovach, along with Steve Hruby, and we're talking about maybe some things you want to talk to your kids about before they go to college. Overdraft fees. These can add up if you've got an account that does not protect you, that's a big deal.

Steve H.: Yeah. I mean, there's some banks out there now that have specifically marketed to younger individuals, to college students that help with protecting you against overdrafts, because those transactions, they don't need to happen. There's a lot of banks out there that nickel and dime you, you can shop around and find some that maybe won't, they give you a little bit of grace in case something like that does happen, which...

Steve S.: It can add up a lot and real quick, you just forgot to log in maybe $100 or $200 check or expense, and, you know, if you only had $5 and you did, you know, a couple of the... You could write checks for next to nothing or use your debit card for next to nothing. And it might be a $25, $35 overdraft fee on each one.

Steve H.: Yeah. I don't know how many college students have checkbooks these days.

Steve S.: I know. I just gave away my age.

Steve H.: Yeah, I think it did. I don't even think I wrote a check in college.

Steve S.: All right. So, let's talk about lodging. I mean, not everybody lives on campus. There's a lot of off-campus housing. My first bit of advice would be okay, if you're doing an off-campus apartment, try not to have your name on the lease if you're gonna have roommates that are friends of yours that are also college age, because stuff happens.

Steve H.: Yeah. I mean, that's a good point. And living there over the summer as well, 12-month leases, are you even going to be there? Is there an opportunity to take a less term for where you're living? Because you may end up paying for something that you're not gonna be using.

Steve S.: Yeah. Okay, car transportation, I think every parent needs to set these rules up, these guidelines of what they're willing to pay for and what they're not. I know in my case, and I think yours might've been similar. I didn't get a car from my parents. They didn't give a gas credit card. They didn't pay my insurance. That was on me. And that's a rare instance these days.

Steve H.: I had a real piece of junk, real junky car that I got from the east side of Cleveland. And that was my transportation to and from college, which by the way was 99 and a half miles away from where I lived, where my folks lived, where I went to college. And I paid for AAA, which was a great idea because they would tow up to 100 miles.

Steve S.: Perfect.

Steve H.: And on more than one occasion, I used that tow truck service to get a ride home with my dumpy car to fix it.

Steve S.: The first car I had in college was so bad that I went over a speed bump, and I wasn't going fast. I went over a speed bump and the entire exhaust system fell. It just fell. And I tried to bill the college for their speed bump causing this damage to my car. Didn't go real far.

Steve H.: Now something else to talk about outside of the budget, if you're fortunate enough to get through to your children with some of these conversations and they are earning money, talk to them about a Roth IRA.

Steve S.: Good idea.

Steve H.: Yeah, please. Because with compounding interest on their side, there's a major opportunity for that snowball effect to grow that account, even if it's small contributions. If they have earned income and you're coaching them to live below their means, then this is an opportunity for a wonderful headstart in their future.

Steve S.: Great idea. Yeah. And maybe tell them, "Hey, I'll match it. You put $200 in, I'll match it with another 200." Give them some sort of incentive. Yeah. No question. That's great. Because boy, you put money away in your early years during your college years, maybe when you're 20, 21, that money grows significantly over the next 40 years or so. Here's the All Worth advice. For the parents out there, there is never a bad time to create good habits when it comes to your money. Coming up next, what many say is the scariest part of retirement and how we have helped them deal with it. You're listening to "Simply Money" on 55KRC THE Talk Station.

You're listening to "Simply Money," presented by Allworth Financial. I'm Steve Sprovach, along with Steve Hruby. Hey, if you've got a financial question you'd like for us to answer, just hit that red button while you're listening on the show on the iHeart app. Record your question. It comes right to us. And we would love to hear from you. Straight ahead, the danger of taking what is known as a hush trip. All right. So you've spent all your life saving for retirement. You've worked hard, you've gotten money set aside, you've already done some sort of plan, and there's just one problem. Even though your plan says you're in great shape, you're afraid of actually retiring. We deal with this all the time. You've got the money, your plan works, and you just can't imagine yourself not going into work.

Steve H.: Oh, it's more frequent than you might realize. I certainly do see it all the time. And many of the folks I work with, they can retire, but they just haven't. No matter how hard I stress test the financial plan, there's this software that we use as certified financial planners where we can project, you know, what happens if you get below market returns? What happens if you live too long? What happens if you spend too much? I spend a lot of time trying to blow up the plan to show people what kind of worst-case scenarios would have to [crosstalk 00:29:27.600].

Steve S.: Even if this happens, you're still okay.

Steve H.: Yeah. In order for things not to work. And sometimes we still see lots of money left over at the end of a plan. And we're planning to 110 years old.

Steve S.: I think there are two types of people that are afraid, or that don't retire even though they can afford to. One is a person that's, I don't know what I would do. I have no idea what I'm gonna do with my day. And the other is just the anxious person of, yeah, but I'm still worried about running out of money. And I've seen this, I was on vacation last week and two of my good friends, both doing very well for themselves, mid-60s, certainly can afford to retire. One has no plans. He just doesn't know what he would do with his day. And the other has lots of hobbies, but he enjoys work so much because part of his job is playing golf with clients. I would rather have somebody else pay for my golfing. I get the second one. The first one, though, that's concerning. And that's somebody who can afford it, but they just don't know what they would do.

Steve H.: Yeah. You know, I wanna add to that too. There's some people that I work with, that they came from very little, they're not used to spending, they built their own wealth.

Steve S.: You don't turn a saver into a spender, at least not overnight.

Steve H.: Yeah, exactly. That's what I'm getting to here. Because they live below their means and they're afraid of not having a paycheck. There's all kinds of noise out there that you hear too, depending on what headlines you're looking at. Inflation, economic downturns, economic catastrophe.

Steve S.: They're scared.

Steve H.: Yeah. So there's people that are scared across the board, but, you know, you bring up your friend that just doesn't know what he would do without working.

Steve S.: At least he acknowledges it. Because if you retire and you don't know what you're gonna do, it can be miserable.

Steve H.: That is true. So the feedback that I've given folks in that situation are maybe test the waters by working part-time. Continue to work. And this advice goes across the board, no matter what your reason is for not retiring, even if you can afford it, consider slowing down. You're still gonna get a paycheck, you're still gonna be keeping busy. You're gonna still have some kind of a schedule. I think that's some of the fear.

Steve S.: I think that's great advice because cold turkey doesn't work. I saw my dad, he went cold turkey at 62, didn't have the money, but he was just sick of working. And for a few years, the kids, myself included, we were worried about him because he went cold turkey, didn't have any hobbies. And there was no plan B, you know. So it's something that you really want to think about before you make that final decision.

And you mentioned slow down a little bit. I've seen people accept an early retirement offer where the company really didn't think that person was gonna take it. And they figured, you know what, I'm going to, but I'll go back as a consultant, and for those people, they kind of enjoyed their job. They just didn't want to do it 9:00 to 5:00. And on their own terms, they enjoyed their job way more than they were when they were required to be there. If it's available to you, that's not a bad idea.

Steve H.: That's a great place to fall. Especially depending on your role with the company and the type of work that you can provide as a consultant, you can charge a lot of money to offer those services.

Steve S.: Well, yeah. Not always willing to pay it, but you can try.

Steve H.: You can certainly try. Yeah. So, you know, plan to explore new things. So keep your schedule busy. On the flip side, you know, I explain to people that can retire, that don't want to retire, there's a lot of people that I work with that they claim that they're even busier in retirement because they're social, because they're open to trying new things. Volunteering, for example, is a way to provide purpose. If you feel like work is your purpose, you can volunteer without the stress of work and deliver something that people appreciate. Exploring new activities, learning to paint, pickleball. How about that?

Steve S.: No. No. I will not play pickleball.

Steve H.: How about racquetball?

Steve S.: Maybe. When I was younger. I don't know about now. You're listening to "Simply Money" on 55KRC. I'm Steve Sprovach along with Steve Hruby. And we're talking about what considerations you should have as you go into retirement. There's a lot of anxiety with it. And I think you mentioned something important. Hobbies. I mean, if you have no hobbies, don't retire, but maybe start picking up some hobbies way before your planned last day.

Steve H.: Yeah, absolutely. And, you know, just that planning to explore new things is a way to ease some of that anxiety because keeping your schedule full, keeping yourself busy, you're not exactly quitting cold turkey. Like you had given the example with your dad. You know, if you have activities to keep yourself busy, keep your mind sharp, keep your body somewhat in shape, then obviously that's gonna be beneficial. Now, we've talked about this in previous shows in the past, trying before you buy so...

Steve S.: Well, especially if you're thinking of moving.

Steve H.: Yes.

Steve S.: Yeah, that's important. Because if you move, and, again, I hate to use my dad as an example, but he taught me what not to do in retirement. And sometimes what not to do is as good a lesson, maybe even better, than what to do. He moved to Florida and realized he didn't have any friends. He had a couple of relatives, but no friends, no support network. Didn't have his doctors down there. Failed experiment. Two years later, moved back to where he was from.

Steve H.: Well, he was kind of trying before he bought, I guess.

Steve S.: Yeah. But I mean, do this while you're still working. I mean, take a two-week, maybe three-week vacation if you have the time and really scope out the area before you decide to buy. Here's the Allworth advice. If you are someone who does not like to dive head-first into something, a phased-in retirement approach might be your best bet. Coming up next, how to navigate taking time off so you don't end up keeping your travel a secret. You're listening to "Simply Money" on 55KRC THE Talk Station.

You're listening to "Simply Money," presented by Allworth Financial. I'm Steve Sprovach, along with Steve Hruby. All right, there's a term out there that came from the pandemic and remote workers started doing, we're talking about hush trips. I've never heard this, but apparently, it's a thing. This is people who go on a trip but don't tell their employer. And they're working remotely. They're doing everything by Zoom, but their boss thinks they're sitting in the office or sitting in their house here in Cincinnati.

Steve H.: What an interesting thing to happen in...

Steve S.: I can't imagine.

Steve H.: ...a post-COVID world where...

Steve S.: I can't imagine on Zoom, somebody is doing something they shouldn't be doing.

Steve H.: Yeah, I know. Right? So there's always a survey, this was done for members of Generation Z, which again, those that are born between 1996 and early to mid-2000s. The survey was done by resumebuilder.com, and they found that one in six Gen Z workers reported using a virtual background to fool their employers while taking a hush trip.

Steve S.: So they're somewhere on vacation and participate in a Zoom call and they get rid of the palm trees and put that fake office background in there.

Steve H.: Yeah. And that's amazing.

Steve S.: Shocking. Shocking. I mean, we always had the joke about, you know, hey, you know, the Zoom call, he's probably wearing shorts with a sports jacket over the top. I mean, we're talking about guys and women wearing swimsuits maybe during a Zoom call. Because they're at someplace other than, you know, here in Cincinnati.

Steve H.: Yeah. I mean, this is really something interesting to me that the survey found that 4 in 10 Gen Z's said that they've taken vacation...

Steve S.: 4 in 10.

Steve H.: ...without their employer's permission. 40%. Two in 10 saying...

Steve S.: To go on vacation and you never got it approved?

Steve H.: Yeah.

Steve S.: That's 40%.

Steve H.: So I wonder...

Steve S.: That's crazy.

Steve H.: What it doesn't talk about is, is the work still getting done?

Steve S.: Yeah. No. No.

Steve H.: Because...

Steve S.: Come on.

Steve H.: You don't think so?

Steve S.: No way. There's not a chance. Yeah, I'll get right back on that. Yeah.

Steve H.: So, you know, I just did a trip with friends, you know, it was something I'd been planning for years. My wife, daughter and I, we met up with friends in Europe and we did this trip together. He is a remote employee. He was doing this the whole time.

Steve S.: No way. He was on the clock to speak.

Steve H.: Yes.

Steve S.: How about... Yeah. You know, I've got a nephew that did it, but it was known by his employer. He writes for a travel company.

Steve H.: Oh, that works.

Steve S.: And so, yeah. He's allowed to be remote and he lives full-time in the Cayman Islands.

Steve H.: Geez.

Steve S.: That's a win.

Steve H.: Yeah. Well, the reasons behind why these Gen Zers did it, a little over half of those that took these undisclosed trips reported that they did so because their PTO request was not approved.

Steve S.: It's not approved. So you do it anyway.

Steve H.: Yeah. 3 in 10, because they didn't have PTO and another 20% because, get this one, they didn't want to use PTO.

Steve S.: Love it. I love it. Well, that's what youngsters tend to do. And my advice is cut it out because you're gonna get busted. They always find out sooner or later. Maybe talk to your employer about I need more PTO. See how that goes. Hey, thanks for listening. Tune in tomorrow we're gonna talk about ways to boost your savings as you near retirement. You've been listening to "Simply Money," presented by Allworth Financial on 55KRC THE Talk Station.