Amy: Can we just get one silent night in 2022? If you're looking for that, maybe don't turn to the Federal Reserve. You're listening to "Simply Money," presented by Allworth Financial. I'm Amy Wagner, along with Steve Sprovach. It has been a rollercoaster ride of a 2022. And I know that everyone's wishing for that volatility to come to the end this year, maybe start out 2023 in smooth waters. Will we? Joining us tonight is Allworth's Chief Investment Officer, Andy Stout. You know, he guides billions of dollars worth of investments from right here in Cincinnati. Andy, of course, what the Federal Reserve does is all about inflation. And where do we stand now?

Andy: Well, if we look at inflation, there's a few different ways that we look at it. The big report we got last week was consumer inflation or CPI. And it surprised economists by coming in better than expected. So, some good news there. We haven't had much good news when it comes to inflation lately. But what we saw is that on a year-over-year basis, total inflation has increased by 7.1% for, or through the month of November.

Steve: So, the Fed, to me, Andy, didn't really surprise anybody last week. And they raised rates 0.5% instead of 0.75%. Okay, we were expecting that. And, you know, in comments afterwards, they didn't seem really hawkish. They didn't seem, to me, like they were gonna really be kicking up, you know, interest rate increases for the next five years or anything like that. Yet, the markets, they've just nosedived. I think the S&P was down over 2% last week. Explain to me a little bit why the markets didn't like what the Fed said.

Andy: Well, the Fed actually did come off a little hawkish from the markets' interpretation. What that means is that it's more worried about inflation and the Fed will wanna keep interest rates higher for longer, regardless of the potential economic impacts. So when you look at what the Fed said last week and what the Fed released in terms of their... There was a quarterly meeting, so they had a release of their economic projections for the next few years, as well as what's called a dot plot. What the dot plot is, Steve, that is each Fed member gets a dot where they think the Fed funds rate will be at the end of upcoming calendar years. Then what the market looks at is the median dot. So, the middle dot of all of those. And what it showed was where rates are right now to where the Fed thinks they'll be at the end of next year, that means the Fed will hike another three-quarters of a point.

So right now, the Fed funds rate is the upper target's at 4.5%. So this will put it out 5.25% percent. Now, what the market thought, the market thought it might be a half point higher, not three quarters point higher. So that was a little bit more aggressive than what the market was hoping for. But here's the kicker. One thing that Fed Chair Powell said in his press conference was that not one Fed member had a rate cut for their projections for next year. And that is really where you saw the markets take that nosedive.

Steve: Yeah, that's a big deal. Yeah.

Amy: Yeah, I mean, it wasn't that long ago, maybe just a few weeks ago, where there was a lot of economists out there saying that, oh, they thought that maybe by the second half of 2023, they could even be cutting rates. And, you know, I wonder too how much stock the markets put in what the Federal Reserve is saying. Because keep in mind, there was the time when the Federal Reserve was predicting they were gonna have to hike interest rates three-quarters of a point in total in 2022. They ended up hiking four and three-quarters of a point, right, in this year.

Steve: It's a little bit of a miss.

Amy: Yeah, kind of a miss. What do you think? How much stock do you put in these predictions?

Andy: Well, I don't put too much stock into it because you said the Fed was pretty wrong. I mean, you had a four-and-a-quarter...

Amy: Yeah, way off.

Andy: ...point, is what you saw this year versus a three-quarters. And when we look ahead to next year, you just made a point there, Amy, how, you know economists thought there might be cuts in the second half of the year. That's what the market's still pricing. And what the market's pricing, the market is not buying what the Fed is selling. The market is expecting that the Fed will pivot, specifically what's priced into the market. And we can see this by how certain investment securities trades, they are called Fed fund futures. So, essentially, market participants can buy and sell these Fed fund futures, and that kind of determines where the market expects the Fed funds rate to be. What's being priced into the market right now is essentially a half point in rate hikes in the first half of the year, followed by half point in rate cuts in the second half of the year.

So, while the Fed thinks by the end of 2023 we'll be three-quarters of a point higher than where we are right now, the market thinks we're going to be at the same level we are now, and that's where we'll be at in the end of 2023. So there's a path there higher, and then the cuts. And when we think about how much stock to put into that or how much credibility, I'm with you, Amy, because at the end of last year, like you said, three-quarters of a point for the entire year of 2022. But here's the thing. That's what the market was also pricing in last year. So both the market and the Fed were way off. So, really, the only thing that I think is certain is uncertainty.

Steve: You're listening to "Simply Money" on 55KRC. I'm Steve Sprovach, along with Amy Wagner. And if it's Monday, we must be talking to Andy Stout, Chief Investment Officer of Allworth Financial. Andy, that's where you lose me. I shouldn't say you, but that's where the Fed and the markets lose me because the market is saying we think the Fed is gonna start turning around and reduce interest rates second half of next year. But the Fed is saying, "No, we're not." And the Fed is the one that decides whether or not they're gonna... So, I mean, doesn't it make sense if the Fed says, "We're not gonna drop rates next year," that they're not gonna drop rates? I mean, shouldn't we just take them for their word a little bit, you know, at this point?

Andy: No, I would never do that. I don't know if that was a loaded question.

Steve: No, it's not at all.

Andy: Definitely not.

Steve: No, it's not loaded at all.

Andy: It doesn't really matter, you know, what the Fed thinks, what the market thinks, because what will eventually matter and determine the Fed's ultimate path is the evolution of inflation. The Fed does not appear to really care about any sort of negative economic effects that their higher rates will cause. In other words, they seem to be comfortable with causing a recession if that means they can avoid a repeat of the 1980s. Because what happened to essentially lead to the high inflation in the early 1980s was that the Fed was fighting inflation in the '70s and then they took their foot off of the brake...

Amy: Too soon.

Andy: ...because the economy started to weaken. Right. And, essentially, that was a contributing factor through the...

Steve: Yeah, it was a blunder.

Andy: ...early 80s, you know, hyperinflationary environment in that time period. That's the Fed's greatest failure. They do not want a repeat of that. They seem to be comfortable causing a recession if that means the early '80s don't repeat. But if you look at the inflationary environment, there are certainly things suggesting that inflation will continue to move lower. That has a lot of people believing that the Fed is going to overdo it, and they might, indeed, incite a recession.

Amy: Well, and I don't mind Monday morning quarterbacking, right, for the Federal Reserve, right, what they should or could have done, but, at the same time, I gotta say, like, I would not wanna be in their position because as economic data comes in, week after week, there's no clear path forward. Everything isn't coming in saying, "Hey, inflation is coming down, and the job market is responding the way that we would think it would, and retail spending is responding the way that we think." It's kind of all over the place. So, it's kind of clear as mud, I'm sure, to the Fed, as to where you go from here.

Andy: Yeah, what the Fed's looking at really closely, Amy, is the job market. And, unfortunately, I mean...

Steve: It's strong.

Andy: ...that's for the Fed's benefit. Unfortunately, for the average person, it's good. But, unfortunately, for the Fed, it is good, right?

Amy: It's like a steel wall, right? Like, whatever the Federal Reserve does, it seems to be impenetrable to the job market.

Andy: Yeah, we still have the unemployment rate at 3.7%. We see jobless claims drop last week. So that's people filing for first-time unemployment benefits, that declined as well. And the Fed is worried about a strong labor market, because, in that situation, that's where you get wage inflation. And wage and inflation, they're really worried about that getting becoming entrenched in the economy because that can lead to higher inflation. When you look at the CPI numbers, specifically, on the service side, that's where you would really see wage and inflation have an impact. And they're worried about that taking hold.

So, when they're looking at the job market, they want it to start to weaken. But we're not seeing it. And then, unfortunately, we are seeing a little bit of weakness in other areas. You mentioned retail sales a second ago. Those declined in the month of November compared to October. And October was also revised lower, by the way. So that shows a little bit of weakness when we're looking at the strength of the consumer. So that's not a great combination where the Fed is still keeping monetary policy tight or high interest rates.

At the same time, that we're seeing weakness in other areas like consumer spending. Also, last week, by the way, we saw industrial production, which is a measure of manufacturing decline as well. So you're seeing some weakness in some areas, at the same time, the Fed is keeping monetary policy tight or interest rates high, then that's where you get the concern that if you have a higher for longer in terms of interest rates, that position by the Fed, you know, that leads to the uncertainty is out there as to how inflation will evolve next year and what that means for the Fed rate hikes.

Steve: So let's bring this back in. You know, you're not getting data here without me trying to pin you down on markets and where we stand right now. So, you know, we've seen a heck of a rally during October and November in stocks, and, you know, they're up quite a bit. But we saw that in June. And after the June rally when stocks were up about 16%, the Fed came out and said, "You guys are getting ahead of yourselves, and, no, we're gonna keep rates higher for longer." Bam, we lost that 16% and then some. And then in October, November, markets take off again, and the Fed, just last week, comes out and says, "No, you guys got this wrong. We're gonna have to keep rates higher for longer." I mean, when are we going to get through this? And do you think markets... You know, we actually saw bonds have a good week, last week, but stocks got crushed. You know, where are we at with the market? I mean, do you see more volatility, and do you see volatility increasing? Was this a bear trap and now are we gonna revisit lows? What are you looking at?

Andy: Well, if I'm thinking about whether it's a revisit of the bear market lows that we had, and I think that will really depend on whether or not a recession gets priced into the market probably in the second half of the year. If that comes to fruition, I wouldn't be surprised by it. But you never know. I mean, the market does a great job of frustrating the maximum number of people. It's almost kind of a job. So whatever everybody expects, it will do the other thing. So, it's really hard to say. So, I mean, if you're asking me about will there be additional volatility, I mean, I have a magic eight ball here, you ask it, it says it is decided to resell. So, there will be more...

Steve: Volatility is the easy one.

Andy: ...volatility. But that doesn't mean we're going to, you know, crash or anything like that. And if you think about it, using financial plans during tax loss, harvesting, your financial plan to guide you during these uncertain times, tax loss harvesting, having the right investment mix of stocks and bonds, those are the things that gets you through these times because these time periods happen. It's a regular occurrence, but we will get through it just like we have every other single time. It's just a matter of being patient. And then it might sound, you know, Cavalier like, oh, just set and forget it. I'm not saying set and forget it. You gotta make sure you can take advantage of certain environments, but market timing, that usually backfires. But taking the longer-term view, strong financial plan, tax loss, harvesting the right stock-bond mix, and taking advantage of opportunities a market presents itself, that's going to help you get through these times.

Amy: Great advice as always, Andy. Here's our Allworth advice, it could be an uncomfortable start to 2023. Keep in mind, though, this is all a marathon, not a sprint, if you're a long-term investor. Coming up, do you invest in crypto? What about if you have a pension? We're taking a closer look at pension systems investing in crypto. We've got that story next.

You're listening to "Simply Money" here on 55KRC, THE Talk Station.

You're listening to "Simply Money," presented by Allworth Financial. I'm Amy Wagner, along with Steve Sprovach. If you can't listen to our show every night, subscribe, you can get our daily podcast, just search "Simply Money" on the iHeart app or wherever you find your podcasts. Straight ahead, it's 6:43. Signs that show maybe you aren't so ready to retire, we'll tell you what those are. All right, another day, another Elon Musk headline. You know, sometimes it's like when someone is just so crazy and, like, nothing will surprise me, but I have to say, I was a little surprised by this one.

Steve: Yeah, I'm a fan of Elon Musk. I mean, you know, he lives by the golden rule. If he's got the gold, he gets to make the rules. You know, that's what he's doing...

Amy: It has been working for him thus far.

Steve: ...with Twitter. He's only been there 53 days, and I swear, every time I open up the paper or a website, there's gonna be something about what Elon is doing and how ticked off some people are. But yeah, he said, "Hey, if you don't like the job I'm doing, let's vote on it, and I'll abide by the rules." Well, you know, be careful what you ask for, Elon, because right now, 57% of Twitter users, they're saying, "Meh, we'd rather you go somewhere else."

Amy: Yeah. He literally posted on his Twitter account, "Hey, should I stay, or should I go? You guys vote and whatever you decide, I will respect it." Seventeen million people had voted the last time I checked, a few minutes ago, a lot of people are participating in this and, yeah, 57% of them said move on. Interestingly, the reaction from Tesla investors were like, "Yes, finally, because if he...

Steve: Maybe he'll come back here.

Amy: Yeah, if this dude loses his job at Twitter, maybe he'll remember this other company called Tesla. It has been an interesting time with Elon Musk.

Steve: Tesla, it's not even funny what's going on. If you're a Tesla investor, that stock over the last 52 weeks has been as low as 147 a share, as high as $474 a share. That's a big swing.

Amy: All over the place.

Steve: Guess which end it's at right now? It's down around the 147 part of the 52-week range. So, yeah, they're saying, "Hey, whatever you're doing over there, Elon, please stop it. We could use you over here to kind of shore up Tesla a little bit." If you're a Tesla stockholder, you don't care about Twitter, you care about the company you own stock in. We'll see what happens. We'll see if he keeps his word or not. I, personally, I kind of think, you know what? If the guy owns a company, he can do pretty much anything he wants. And if you don't like it, well, use a different company. You know, but it's crazy how upset people are getting over this.

Amy: Seventeen million people voting so far. I'm guessing that maybe like 16.9 million of them are Tesla investors. "Quit that and get back over here. We need you to refocus on us." So, if you or someone you know is banking on a pension from the state or local government, first of all, you know that that's like a rarity these days, but if you are a teacher, a state worker, you know, pensions are there. The interesting thing, though is, as you dig a little deeper, you might be surprised in how those pensions are invested, what they're invested in.

Steve: Yeah, you say interesting. I say disturbing, because...

Amy: Yes, that's a good point.

Steve: Yeah, we're finding out a lot of these pensions... And I'm talking about pensions like the Ohio State Teachers Retirement System, otherwise, known as STRS, that they had some money in FTX. And, you know, before you start panicking and say, "Wait, wait, well, yeah, I'm getting a pension from that? They were invested in that?" Yeah, they had $9.5 million that add STRS invested in FTX. And in the overall scheme of things, as a good crude buddy of mine would say, "That's just a pimple on an elephant's behind." I mean, they...

Amy: Gross.

Steve: They got... Yeah, here's a visual for you. No, STRS has $98 billion in assets. If that $9.5 million falls by the wayside, you won't notice it in your check. But, you know, it does point out that, you know, there's a lot of investments among public pensions that are going towards what you and I would consider, Amy, relatively risky investments.

Amy: When you think about it, these pensions, and I live in Kentucky, the Kentucky's pension has been just a mess, mess, mess for years now. But there's quite an obligation they're on the hook for. And the way that they do these calculations, they often are really optimistic about how much of a return they can expect on things. It makes the numbers work on that day, but then a year passes, and reality comes and goes, and they see it doesn't exactly work that way. Because I think pensions have sort of always kind of taken those really kind of optimistic look at things, many times, I'm not gonna say force, but I think they often look at riskier investments that could potentially possibly maybe pay off well, but also could fall flat. And so, if you're digging into these pensions right now, I don't think it's surprising. And, to your point, I think, yeah, it's very problematic, but not surprising that a lot of these pensions have gone the way of crypto.

Steve: Yeah, there are two big categories of pensions, corporate pensions, you work for a big company, and they pay you a pension. Okay. It's a corporate pension, you're protected by ERISA. It's an act of Congress, you're protected. You've got insurance, public pensions, which are mostly, you know, school systems, they've got a different set of rules. And the way public pensions work, and I think this needs to be fixed, is, oh, okay, well, we need to put $100 million into the pension this year to make it solvent and be 100% funded. No, we've only got $80 million. Well, okay, then we'll have to just assume, instead of getting 5% rate of return, let's assume we get 8%, and then $80 million is enough. That's what they do. They make the numbers work, whether they're realistic or not. And that's why...

Amy: And then it also makes you think whether the people who are running these pensions, right, were like, "Well, I was just on vacation with a buddy of mine from college, and he was talking about an 11% return from a crypto investment on Dogecoin, so let's jump in on..." I mean, it does kind of make you wonder sometimes, like, the rationale behind making these decisions when so many people's future rely on these things. The good thing, I think, at this point, is, yes, so pensions often go after riskier assets, but a smaller percentage of them are kind of part of that. Keep an eye on this. So if you're getting a public pension, it's fine to ask them questions about where the investments lie. Do your research, you might be surprised. Here's the Allworth advice.

Curious what your state has your pension invested in? You can find the breakdown of investments on your retirement systems website. Go there, look, you might be surprised. Coming up, it is the season for scams, and the target here, your dollars. We're gonna help you stay ahead of those scammers next. You're listening to "Simply Money" here on 55KRC, THE Talk Station.

You're listening to ''Simply Money,'' presented by Allworth Financial. I'm Amy Wagner, along with Steve Sprovach. You know, during this season, there's so much going on that it can be really kind of difficult to even focus on anything, which is what scammers are counting on. So, tonight, we have an expert in here just reminding you about little things you need to keep an eye on when it comes to scams. He's an Allworth advisor, Bill Shredder. Bill, you actually have kind of a designation. You have some extra education in this area. Tell us about that.

Bill: Yes, I do. And the reason is, is because, over the years, working with clients, hearing the terrible stories and the terrible experiences they had, I really got into doing a lot more research on this, because, ultimately, I do think it's important, you know, for everybody to really understand the scammers are out there, the thieves are out there, and how to protect themselves. And so I did get an additional credential. So from the Association of Certified Financial Crimes, I'm a Certified Financial Crime specialist. So, yeah. So, you know, and it's simply because, you know, this is something that, you know, all my clients, over the years, I've always wanted to make sure that they understand because you can spend a lifetime saving money and you can lose it so fast because of a single email, a single text, a single phone call. And, you know, it's just awful, the stories that are out there.

Amy: Well, and you know, we talk a lot on the show, Bill, about kind of that relationship with a financial advisor, but sounds like you're able to provide kind of another level of guidance to the people that you're working with, able to steer them clear of potential landmines when it comes to this kind of thing. But, you know, I was talking to you recently, and you said, "This is also happening to my family," one of the reasons why you're super passionate about this. Can you share that story with us?

Bill: Oh, yes. I mean, yeah, and we all have, you know, older members of our family, 60 and older, 70, 80 years old, and they're getting these scam phone calls, these scam texts, the scam websites. I mean, they're being picked on by these criminals.

Amy: Targetted.

Bill: Yes, absolutely. And it's just sad, because, in some cases, that romance scams, you know, and they're very much targeting people who just recently had a spouse die. You know, the fear that they project as far as, you know, these fake messages about your social security is gonna be disturbed, the IRS is coming after you because you owe taxes, there's invoices that are hitting your bank account, from, say, example, Norton, for, you know, $492. And you're like... And that's gonna be pulled from your account tomorrow unless you actually contact them right away. I mean, there's all kinds of these strategies to get these people to contact them, and to go into the website, and to go into the text or the email, and send back their personal data.

Amy: I like to think I'm kind of savvy, you know, about these scams or whatever, because we talk about them a lot, we've got a lot of experts on the show with warnings and things like that. But you told me about one that I had never heard of. And I wanna make sure that we mention it right now because during the holiday season, there's a lot of people online looking at recipes. You pointed out that that actually is the place where scammers are targeting people. I'd never heard of that before.

Bill: Oh, it is a big one right now, basically, through the holiday seasons, and, of course, Thanksgiving, Christmas, also Easter. And what happens is, you go onto Google and you're looking for a free recipe, and Google will do the search, you know, top 20 sites come up, you click on one, you're reading the free recipe, this is a wonderful recipe. And, all of a sudden, you know, there's a big pop-up with blaring sound, you know, all kinds of multicolor flashing at you, "Warning, you're about to be hacked, call this 800 number." And it's from the Microsoft defender systems. And people immediately go, ''Oh, my goodness, I'm being hacked,'' and they call the number. You know, and they'll tell you that, you know, your computer has now been infected with a virus.

The thing is, it's not a real site. It's a pop-up. The website that you went to generates this pop-up, causing you to call them. And, of course, they wanna charge you for their, you know, technical support, which is complete fraud, and, at the same time, they'll ask you your personal information. And what occurs then, of course, is you're giving it to them in the panic, you're paying them for this wonderful service that they're providing you, they deactivate this, you know, "We've protected you from this hack," but, meanwhile, you've given them potentially your social security number, your birthday, your bank account number, your credit card...

Amy: Your credit card number.

Bill: ...your PIN number, you know, all the information that they needed.

Amy: You used the word panic when you were talking about that. And I think that's such a good point to touch on, Bill, because a lot of times, scammers, however, they're coming at you, via email, text, calls, whatever it is, there's always this huge sense of urgency.

Bill: Absolutely.

Amy: And if there wasn't, you might calmly and rationally think through this and say, ''Well, is this really that? I'm gonna back out of this and I'm gonna double-check my computer system," or whatever it is.' But because there's such a sense of urgency, I think a lot of people tend to fall for these things.

Bill: Absolutely. And they also tend to really target people, 60 and over, because they're assuming that they're probably alone in the house. So they have no one at that point in time to talk to about it to basically, you know, kind of talk them off the ledge. You know, it's amazing, you get this text from Amazon claiming that there's a problem with your Christmas order, oh, let me go in there, oh, they need your account information. And very often, they're asking for banking account information.

That's funny. I've never given that to Amazon before, but they need it. And you give it. And all of a sudden, it's like, how about your PIN? How about your credit card number? The moment they get one piece of information from you, they keep trying to get the rest. And the sad thing about it is the fact that you even clicked on that link and went in there, they now know that your name, your email address, your text, your phone number is tied somehow to an Amazon account, you're gonna get more of them.

You know, they know that, okay, there's a relationship there that they can now use to kind of complete your profile. When you look at these con artists, the way they make money, they make money three ways. One is you send it to them. The second way is that they get your account data and they basically try to steal the money from your accounts, bank wires, credit card, ACH transactions, whatever they can do. And the third way that they get the money is by basically updating your profile with more and more valuable information.

Amy: I always talk about it, Bill, and I don't know if you would agree with this, kind of like a picture or a puzzle, and there's different pieces of yourself. And the more pieces that you give away to the scammers, be it one time they get your social security number, and then somehow they get credit card information and your date of birth, and now they've got your address, and your phone number, then they can put together this entire puzzle, your entire picture, and then that can be incredibly valuable for them to sell to someone else who can then take more advantage of you.

Bill: That's exactly right. And what's amazing about it is, you know, these organizations, I mean, they're part of organized crime. They're syndicates. You know, there's a bigger picture here associated with money laundering, you know, all types of criminal activities. This is worldwide, a $6 trillion industry. But what they do is they get that little profile from you, sometimes legal information, your name, your address, public information. And then by basically sending you these phishing emails, these spams, these texts, all these types of things, what happens is you start completing that puzzle for them.

And, eventually, for example, if I get from you your credit card and your PIN number, on the black market, your identity, that record, that profile, goes from being worth $5 to being worth $160. And, you know, people ask for driver's licenses, you know, you give your driver's license numbers, it means verification. And it's like, but you have no idea who you're really talking to. And it looks like a real legitimate site. Sometimes it looks like American Express site, Fifth Third, Bank site, a U.S. Bank, I mean, you know, they can fake these sites. And, all of a sudden, after the fact, you go, ''That's funny. They've never asked me for my pin number before. Should I be concerned?" Yes.

Amy: You don't think about it until after you've shared that information. So what can we do? You're talking about the three ways that these people make money, these scammers make money. How do we protect ourselves? How do we protect our family members?

Bill: Well, I always look at it as you basically wanna have like two tiers of your personal information. So, for example, for your major bank accounts where you're paying your bills out of, okay, that's one bank account that you would have, have a second one for all those magazine subscriptions, all the little things that you spend money on a regular basis that you might have a tendency to give out that debit card number more often. And that way, if that account is compromised, they're not taking your social security payment. They're not taking money for all your bills. It's a minor amount of discretionary.

Amy: Yeah, that's a good idea.

Bill: You know, so that's one thing. It's also having different levels of passwords. So really, on your bank accounts and major credit cards, you know, you really do wanna have a password that no one can guess that you know, from your history, but that no one can really try to guess the numbers. Because, for example, one popular thing to do is, okay, I tend to have the same password for all my accounts, but maybe I add a letter or I add a symbol or something like that. Well, the moment that, you know, they can get on the black market, the password that you've used, for example, say, for your social media account, now they can do number generators against your bank account and see, can I complete that password? Are you using something similar enough? Oh, look, I'm able to break it in a week. And now I can steal money from your bank account. I can log in.

Amy: Great advice, great insights tonight from Bill Shredder on ways that you need to be aware if scammers are trying to get to you and how you can protect yourself. Coming up next, key signs that signal you're not ready to say goodbye to the work world, at least not just yet. You're listening to ''Simply Money'' here on 55KRC, THE Talk Station.

You're listening to ''Simply Money,'' presented by Allworth Financial. I'm Amy Wagner, along with Steve Sprovach. Do you have a financial question you want us to talk about here on the show? Easy way to do it, there's a red button you can click on. While you're listening to us on the iHeard app, you can record that question, and it's coming straight to us. Coming up, they say timing is everything. Is this a good time to ask for a raise? We've got some advice for you. Half of American workers agree with the statement that, ''I don't have enough saved for retirement.'' Right? This is according to a big survey.

Steve: Only half?

Amy: Yeah. Well, that's what I was gonna say. And it's like, I can quote any survey, all of them kind of say the same thing, "I'm not ready. I haven't saved enough. I wish I had saved more," some variation of that. Tonight, we're talking about some ways that you can know, hey, as much as I want to tell that boss to take this job and shove it, I actually can't, because of this. One of them I would say you've got too much debt.

Steve: Yeah, well, if you retire with any debt, I would argue that that's too much debt. You know, fine, you build up a balance on your credit cards, I don't care if you rack up $10,000 a month on your credit card as long as you can pay it off every month. It's the revolving debt. It's the car loans. And the big one, obviously, is the mortgage. You wanna have some stress, you know, when people say, ''Well, you know, wait a second, I think it makes sense for me to carry my mortgage, because I got in at the low, I'm only paying 3%. I'm averaging 5%," or whatever you think you might be getting on your investments, "I'd be crazy to pay that off.'' Yeah, until the market goes down and you start taking money out of your account to pay your mortgage when your investments are down. You wanna have some stress? That would do it. Get out of debt before you retire, if at all possible.

Amy: Credit card debt, student loan debt, we see a higher and higher percentage of Americans in retirement carrying student loan debts. Either you've gone back to get more education, you've helped children or grandchildren cosign for loans, whatever it is, not a good way to enter into retirement with kind of carrying those on your back. Also, looking at your spending, right, it doesn't matter how much money you make. And we've seen this play out so many times. The paycheck could be a huge paycheck. But if your spending is more than that, it doesn't matter. You can't possibly retire because you'll never be able to live the way that you spend.

Steve: Amy, I had somebody a couple of years ago say, ''Hey, where's my $8 million?'' Obviously caught me a little bit off guard, I said, ''What $8 million are you talking about?'' 'You did a plan for me 20 years ago that said when I was 80, I'd have $8 million. Where's my $8 million?" He was obviously kidding. And I said, "You got the plan?" And he did. He brought it with him. And he had plugged in $2,500 a month of spending. Yeah, if you're only spending $2,500 a month and you got some money saved up, you're probably gonna have a really good financial plan. But he was spending a good $5,000 to $6,000 a month, guess what? He's not gonna have $8 million 20 years later.

Amy: Hey, guys, the plan only works if you stick to the plan.

Steve: Garbage in, garbage out. Exactly. Well, the scary thing is, you know, he's saying, ''I spend closer to $6,000 a month.'' But you know what? He was probably spending a little bit more than that. And, you know, if you consistently spend more money than you've been plugging into your plan, now, you're hoping that you know what? If I go past 80 or 85, I might be out of money. That's not a good place to be. I'm not saying don't spend money, the time to get a handle on how much you actually spend isn't retirement date, it's maybe 10 years beforehand so that you go into the decision knowing what the equation is likely to be.

Amy: You have to be realistic about it, right?

Steve: Yeah. Yeah.

Amy: I mean, it's one thing to put these numbers down, and be like, ''Gosh, well, this all works out really well on paper.'' But if you don't live by those numbers... And we're not saying every time that you go to the grocery store, you're checking it against your financial plan. That's no way to live. But if you're generally staying within kind of the goal that you would set yourself as far as spending, then usually you learn to live that way and then you carry that into retirement just fine, right?

Steve: I got one for you. You're big on emergency funds, as you should be, okay? But what if your emergency fund just... What if you just keep digging into your emergency fund, and it's starting to get low? That happens.

Amy: Then you work a little longer. I mean, as much as you wanna retire when you have set it in your head, right? I mean, I know, even if I'm just going on vacation in a couple of weeks, when I get, you know, to that day of vacation, I'm like, ''Oh, I can't work another day.'' And I imagine that it would be horrible to say I'm gonna retire in 2034, and then, all of a sudden, my emergency fund is down. But I'm telling you, the peace of mind that comes from that emergency fund, how many times you will need to turn to that. And I would also say if you're going into retirement in a year like 2022 where markets have been down, that emergency fund becomes critical. The less you can draw off of those assets when they're down, the better off you're gonna be.

Steve: Well, I'm gonna make a point. If your emergency fund is running low, the problem isn't your emergency fund. The problem is your budgeting. You're spending more than you think you're spending. That's the bottom line. If you go in... Well, yeah, it was a one-time item. You know, my car broke. Okay, well maybe you need to set aside some money on a monthly basis for a fund for car repairs. And that's part of your budget.

Amy: Yes. Part of that fund, right?

Steve: Yup.

Amy: Another idea, maybe, or another thought that you're not ready to retire is if you've got no idea how you're invested. It's called your portfolio, but essentially, it's all of those investments, what's in your 401(k)? Do you have any IRAs? Do you have that emergency fund? Do you have a health savings account? Whatever it is, how are you invested? What kind of risk are you taking on? Each of those pieces put together makes the puzzle, and the picture is your retirement. Do they fit together well? Do they make sense? You've gotta know these things. And I think, Steve, for a lot of people, because money tends to be confusing, right, it's not transparent. A lot of us, you know, grew up in families where money wasn't talked about. We know it's not necessarily taught in school. So if you're not clear on it and what you're invested in, "Well, I'm just... I don't know, I've got a 401(k)," make yourself aware. Educate yourself. You're gonna be so much better off in the long run.

Steve: We talk about financial plans. How about a social plan? I saw this with my dad. He wanted to just go to Florida. It was cold. It was the wintertime, and he said, ''You know what? I'm retiring. I'm going for the good life and the warm weather of Florida.'' Guess what? No friends, no doctors. That was his plan.

Amy: That was his plan. Just the weather, no friends.

Steve: Two years later, came back. You know, so think stuff like that through because it does have financial consequences if you decide that wasn't a good plan for you.

Amy: Yeah, it's not just about the money, right? There's so many aspects to retiring and retiring well. Here's your Allworth advice, qualified financial professional can help keep your financial goals on track so that when you are ready to retire, you can actually do it. Coming up, want more money? Is it the right time to ask for a raise? We've got some things for you to think about. Next, you're listening to ''Simply Money'' here on 55 KRC, THE Talk Station.

You're listening to ''Simply Money,'' presented by Allworth Financial. I'm Amy Wagner, along with Steve Sprovach. You know, everything cost more right now, right, because of inflation. And so, for a lot of you, I'm sure you're wondering, "can I ask for a raise? Is it a good time?" The markets are all over the place, inflation is high. So, is it a good time?

Steve: You know, you don't get anything unless you ask, and the worst maybe is no as an answer, but I'll tell you, if you're gonna ask for a raise, it's not a good thing to say, ''Well, you know, Mr. Boss, Mr. Supervisor, inflation is high, everything costs more. I need more money.''

Amy: I'm paying more for Cheerios right now.

Steve: Yeah, exactly.

Amy: So, cough it up, boss.

Steve: I need more money. Yeah. Not the right approach. But, you know, like anything else, it's merit-based. If you can put a good argument to why you deserve to get paid more, you know what? Maybe you should ask because that window is probably closing and closing quickly as profit margins are getting squeezed.

Amy: So much has changed, so much has been crazy and topsy-turvy about our economy this year, but the labor market seems to be strong. It seems to be impenetrable to everything else. And what your boss knows is that if you leave, it is expensive to replace you, which gives you a little bit of leverage, right? So if you can make a good case for why you deserve a raise, I say make it, but, to your point, Steve, you better make it now.

Steve: Yeah, it's not gonna last forever. I mean, two jobs for every unemployed person is so unusual that, at some point, it's gonna get back to normal. And that's when you don't have the leverage you have now. So if you think you deserve it, put your case together, present it, but don't wait forever.

Amy: And have a plan B. If they say, ''Hey, we've already budgeted for next year, there's no money for that," ask for additional days off. Is there another benefit that makes sense for you, right? At least you're having that conversation, opening their eyes to the fact that maybe you do deserve a little more.

Thanks for listening tonight. We'll hope you'll tune in tomorrow. We're talking about the signs that you're going to run out of money in retirement, what you need to know.

You've been listening to ''Simply Money,'' presented by Allworth Financial here on 55KRC, THE Talk Station.