Amy: Tonight, fasten your seatbelt. This market volatility, well, it's not going anywhere anytime soon. You're listening to "Simply Money." I'm Amy Wagner, along with Steve Sprovach. Let's see... We've got mixed earnings, we've got inflation, that's not going away. The Federal Reserve expected to hike interest rates again this week. If you were looking for a calm period in the markets, it is not today. Certainly, not now. Allworth, Chief Investment Officer, Andy Stout, does join us on this day, every Monday, to just give us a little perspective on the markets. Andy, I wanna start with mixed earnings because for anyone who truly is checking their 401(k) and worried about that, really all comes down to this.

Andy: Yeah. When you look at the total earnings picture, Amy, it's actually not too bad. I mean, we're seeing stronger than expected growth, compared to the same time last year, total corporate profits are 8.7% higher. Heading into earnings season, Wall Street was expecting a growth rate of 5.2%. So, that's good, stronger growth. But we're also seeing about 81% of the large cap companies report better than expected profits. So, why is it a mixed bag? Well, it's because some of the biggest companies I'm talking about, the tech heavyweights, they have really underwhelmed. I mean, we saw last week with Amazon when they reported a surprise quarterly loss, or first loss since 2015. What was expected was billions of dollars in gains, and what happened was billions of dollars in losses, $3.8 billion loss. On a per-share basis, by the way, they were expecting a gain of $8.40 and it lost $7.56 cents. So, that stock, which is a big part of the S&P 500, which is a large cap index, that stock lost 14%.

So, when you have one stock that makes up a big part, lose that much, it's going to bring the whole thing down. But it wasn't just Amazon, Amy. Also, Google parent Alphabet, they underwhelmed, they missed both earnings, and sales forecast. While Apple did beat forecasts, the problem with Apple is their management said supply chain issues could affect future revenue, and Wall Street and stock markets, they don't like when you start putting future profits at risk.

Steve: And that all sounds great and earnings are off a little bit, but Andy, Friday, I mean, that was almost a thousand point drop. And, you know, Fridays seem to be bad days lately. We've had a couple of big drops. Why is there so much volatility? Why are we seeing, you know, some halfway decent days and then boom, lose it all in one single day?

Andy: Well, that's what you tend to see when you're looking at just choppy markets, in general. You're gonna see big moves up and big moves down. The thing is, you never know when the bottom is finally put in, and you don't wanna try to time that because what you might inevitably do is miss some of those big moves up, and all of a sudden, you're left there out of the market wondering when to get back in. And mentally, you're thinking, "Well, I'll wait until it goes back lower, before I get back in." Well, guess what happens? Maybe it does go back lower. And then you might say, "Well, I don't feel good about this right now, let's wait until it gets a little bit higher," and you're just out. I mean, it's better just to stay in the market in most instances, and not market time.

So, you have these big swings. And the point to answer your question is, volatility tends to happen in clusters or in bigger groups. That's why you're seeing a lot of these big ups move, and big down moves. And when you look at just the overall picture, and what else is wearing the markets, well, it's the Federal Reserve and I'm sure we'll talk about that in a little bit, as they look to respond to inflation.

Steve: Well, I think what a lot of people don't realize is the Standard and Poor's 500, yeah, it's Procter and Gamble, it's Exxon Mobil. It's big established companies like that. But it's pretty tech heavy, isn't it?

Andy: Yeah, it really is. I mean, technology companies make up almost about a quarter of the overall index. So, in these tech companies, also, when you look at volatility, in general, that's where you do tend to see higher volatility. And you look at valuations. These type of tech companies, they're not as attractive from a valuation standpoint compared to some other areas.

Amy: You're listening to "Simply Money" tonight here on 55KRC, we are joined, every Monday, by our Chief Investment Officer, Andy Stout, with always great insights into what's affecting your 401(k), what's affecting the economy. And speaking of the economy, some not so great news, at least from a headline perspective last week. Andy, when it comes to gross domestic product, which is kind of the overall health, the overall report card of our economy, showed that we were actually maybe moving backwards.

Andy: Yeah. So, GDP, gross domestic product, it measures our nation's total output. If you wanna maybe boil it down to more simple terms, you could say it's, you know, how big is our economy, if you wanna think about it that way. Now, when we looked at what the headline number or the total number is, it showed that the U.S. economy shrank by 1.4% on a quarter-over-quarter basis. So, the first quarter of this year, compared to the fourth quarter of last year, and then we annualize it. So, it shrank by 1.4%. What economists were looking for was a 1% gain.

So, not only did we miss on a negative side, it was actually a pretty sizable margin of a miss and heading into it, a 1% GDP gain isn't really that great, anyway, to begin with, when you think about how the fourth quarter of last year. You know, we saw gain of, I think it was about 6.7%. So, that's a pretty big difference here. And part of the reason for the lower expected growth of 1%, which didn't materialize obviously, was that Omicron really constrained spending in the early part of the quarter. Now, why did we drop? Well, I just mentioned spending. Well, consumer spending was actually pretty good. I mean, we saw some growth there and it was positive. Where we saw the drag though, that was on exports. Exports took away net exports, which is exports, minus imports. Collectively, that took away 3.2%. So, that doesn't really have much of a translation into the underlying health of the economy, because there was a few other areas that took away from growth. Government spending was down, that took away half a percentage point. Also inventories, meaning businesses weren't buying inventories, compared to where they were. So, they'd already kind of built that up in advance of any possible supply change disruptions from COVID, so that took away 0.8 percentage points.

So, when you look at what the market did that day, that it actually came out, when GDP was released, stocks actually had a really, really good day because economists looked past these one-off events that aren't really a true measure of the underlying health, and looked at some other indicators. Now, an alternative measure to just our normal GDP, I call this core GDP, which is personal spending plus business spending, essentially, plus exports, what we send out to other countries. So, this is a better measure, in my opinion, of overall demand, if you will. And that came in at a pretty decent clip of 2.4%.

Steve: Well, that's a big difference. But yeah, you know, so many analysts are calling for a recession. You're not one of them, you've been saying at least, you know, this year it looks pretty good, and very slim chance of a recession, yet we have a, you know, negative number on first quarter. How's second quarter look?

Andy: Well, when we look at just what the definition of a recession is, a lot of people use a rule of thumb of two consecutive, negative GDP quarters. That's not technically the definition. But regardless, when we look at GDP, and we look at where it might come in at in this second quarter, early estimates are for 3% positive growth rate. Now, some of that's going to be a give-back of the negative parts that we saw in the prior quarter, like, inventories should bounce back because they tend to have a negative relationship with their prior reading. So, if you saw a big move down, you might see a big move up next time. Conversely, big move up, might be followed by a big move down. So, there tends to be that type of relationship. So, we expect maybe a bounce-back there. Also, government spending looks like it should bounce back to just based on how everything is playing out.

Steve: Just playing the odds, government knows how to spend.

Andy: Yeah. They don't wanna push us into the rule of thumb definition of a recession. But early estimates, at least on government spending growth, is a increase of 1.6%. So, we're looking at actually growth kind of across the board in a lot of the different areas. And, you know, that's just where we're looking in the second quarter. Even looking at the remainder of the year, recession risk is still low. I mean, we'll have a recession eventually, it's normal, it will happen, but the leading economic indicators, which are data points that move before the broad economy, they're not yet signaling a broad slowdown.

Amy: Andy, you mentioned earlier the Federal Reserve, our nation's central bank, right, hiking interest rates this week, we're expecting a half point hike. I've heard even three-quarter, like, 75 basis point hike up next. We haven't seen that since 1994. Is there any concern from you that the Fed is being too aggressive?

Andy: I mean, there's always a chance the Fed could hike us into a recession. They've done it before. And if they feel that's the only way to stop inflation from spiraling out of control, then they might go down that path. But I would say if you look at the inflation data, there's a good chance that we will see lower year-over-year numbers going forward. So, the 8.5% CPI, that might have been peak inflation. Now, remember, the Fed wants inflation to be much, much lower. So, even if inflation does come down, it's still going to be elevated and still higher than what the Federal Reserve is comfortable with.

Amy: At 2%, right? We're way above 2%.

Andy: Yeah. Not even close to it. Now, when we think about the Fed rate hikes, 50...half a percent, also 50 basis points, that's probably gonna happen here on Wednesday. Then to your point, the next question is what happens in June? On June 15th, there's about a 50% chance, or a coin flip's chance that you see three-quarters of a percent rate hike. The other 50% by the way, is for half a percentage point. So, looking like it could be an aggressive Fed here. And I think a lot really will depend on how inflation evolves over the next few months. Now, May is probably pretty much done, but when we're listening to Federal chair, Jerome Powell, talk at his post-meeting press conference, I think he's gonna come off as hawkish, which means he's going to be saying things that are really designed to show that they're serious about fighting inflation.

Amy: You know what's interesting, Andy, too is you would expect the markets to have a strong reaction if he does take a super hawkish tone. However, I don't know that you can give any reason to the markets because then, as I think, "Oh, the markets are gonna respond really poorly to this," and they seem to shrug it off.

Andy: Yeah. I think it kind of depends if they believe the Federal Reserve is going to be able to somehow engineer a soft landing, or thread that proverbial needle to where they can stop inflation, but yet still keep the economy growing. That's essentially what's probably priced into the market to a degree because we're not seeing too many leading economic indicators point to a slowdown. If we saw a bigger swath of indicators suggesting that there was a recessionary environment ahead, you know, certainly, the ability for the Fed to get that soft landing.

Amy: Time in the market beats timing the market, straight ahead at 6:43. Is it safe to retire when the market is so volatile? We'll take a closer look. You're listening to "Simply Money" here on 55KRC, THE Talk Station. You're listening to "Simply Money." I'm Amy Wagner along with Steve Sprovach. Can't listen to "Simply Money" every night? Subscribe to our weekly podcast. It's the best of "Simply Money" on the iHeart app, or wherever you find your podcasts. Straight ahead at 6:43 if you think you are on the right track to retirement, we're gonna break down what you should be doing, and we hope you're doing if you're in your 40s, 50s, 60s.

Okay. So, if you listen to this show, you know that there's one thing about me that I am a huge fan of, a health savings account, an HSA, huge proponent of these, triple tax advantage. Steve, I just think there's nothing like it, it's a gift from the government. They don't give us many gifts. And now we've got some even better news along these lines. The IRS is going to allow you to put more into an HSA next year, if you are eligible to have one.

Steve: Yeah. The IRS doesn't always do many things to help us out, but this is one where they're allowing us to save more. And you are using an HSA perfectly. I mean, an HSA, I don't think was designed...

Amy: What are you thinking of?

Steve: I don't think it was designed to be an additional retirement savings account, but it can be used that way. First of all, the good news, you can save up to, if you're an individual $3,850, that's up $200 from $3,650, in your HSA, in 2023. With a family plan, it's gonna be up to $7,750, from $7,300. So, basically, you can put a lot more money away. And what I mean, Amy, by the way, you're using it the best way you can. You are paying every out-of-pocket expense, not with your HSA money, with your HSA savings, but you're paying that out of pocket, and allowing the HSA to grow.

Amy: Yes. My HSA money is invested. So, rather than it being like a checking account, it is investment accounts, right? So, it's gaining, it's growing, its compounding.

Steve: Tax-free.

Amy: Yeah. Yeah. Tax-free, right? And if I take it out for qualified expenses, I won't ever pay taxes on that money. There's no other way to do anything like this. So, love the HSA and again, if it makes sense for you and your family, right? If you have chronic health conditions, if someone's expecting a big surgery, that probably, you don't wanna high deductible healthcare plan. I mean, my family knows, "Hey, listen, if something happens unexpectedly, we have extra emergency savings set aside for that reason." Because for several years now, we've been using it, and it has been working well for us. And I love the fact that you can put aside a little more money, right? I mean, several hundred dollars. But hey, we see the IRS kind of changing these thresholds every year, maybe on IRAs, HSAs, 401(k)s. So, this is a move in the right direction, I think.

Steve: But you really tell your kids just suck it up and put a Band-Aid on it, don't you?

Andy: You know, it's so funny, it does change your mindset. And I have a good friend whose family, and they have four kids, and they have an HSA as well. And the mom was telling the story. The dad actually had this rare health situation. It was a genetic thing. It came from out of nowhere. And she said, he came to me and he said, "I feel like I can't breathe and I think I need to go to the hospital." And she said, "I knew he was serious because we have an HSA." And usually, he is like, you know, "If you cut an artery, that's the only way that we go." So, it does change the way that you think about medical procedures, right? You don't wanna use them if you don't have to. So, I just caution anyone, right? Think through all these things in determining whether this makes sense for you and your family.

When it comes time for you to retire, right, and the market is crazy, bonkers, like it is right now, what do you do? Do you hold off? Do you jump right in? Steve, I said when the pandemic started, if I had determined that I was going to retire in the spring of 2020, I don't know if I would've need Dramamine, anxiety medicine, I dunno. I probably would've needed something though.

Steve: Well, and that's a natural reaction. I mean, really what we're talking about is, do you feel comfortable about how your finances will be, and that you can afford to retire when you're seeing volatility? And, you know, I think that depends on how much preparation you did going into your retirement decision. Because I'm not sure you ever feel 100% comfortable retiring, but I know one person in particular who retired in August of 2008, literally right before the big drop. You talk about anxiety, markets are melting down, his 401(k), that was a very big number, was a much smaller number. And, you know, everything worked out for him. And I think the reason he wasn't standing on the ledge the whole time is because he went into it prepared. He went into it with financial plans being updated every year. And, you know, especially if you're dealing with a halfway competent financial planner, they're gonna do something called Monte Carlo analysis. They're gonna put your plan through a 2008 scenario, and see what happens to it. They're gonna stress test it. And if it works in the Monte Carlo analysis, and the stress testing environment, when you actually do go through that, you're not feeling as anxious as if nobody did any work for you.

Amy: You've seen these numbers before, right? You've looked at worst case scenario, you've processed worst case scenario before. And I think that's a huge thing. And I think maybe if you are so like cannot sleep at night because of all the market fluctuations, maybe it's because your investment mix isn't the right one for you. Maybe you have taken on too much risk, right? But that's a tight rub scenario as well, because you don't wanna take on too much risk. But at the same time, you also don't wanna be too cautious, especially right now when we have, yes, market volatility, but also really high inflation, right, that's going broke safely. So, I do understand anyone's anxiety right now because it's kind of just this sort of general recipe for, you know, a crazy start to retirement. And I think about Ed Finke, one of "Simply Money's" founders, and what he did when he got close to retirement, right? He retired right before the pandemic. And the reason why he was able to sleep at night was because he kept enough money on the sideline so that when the market was down, he didn't have to cash out. So, he wasn't taking a loss, the loss was only on paper.

Steve: Yeah, but here's the thing. I think if you're trying to wait until there aren't any concerns in the world, and there aren't any concerns in financial markets, you're gonna work the rest of your life.

Amy: It's like what they say about the baby, right? It's like, when do we start having a baby? And everyone's like, you know, if you wait until you're making X amount of money, you just get to this point in your career, you're never gonna get there. I think you're absolutely right, the same applies to retirement.

Steve: Yeah. Just acknowledge that that's the way it is. It's always been that way. It's always going to be that way. There's always gonna be something scary, always something to be concerned about, and that's why that emergency fund is so important. You know, before you retire, an emergency fund is really, you know, the hot water heater went, maintenance on the car you weren't expecting, but in retirement, that kind of becomes your slush fund. Because if markets go down, you can start drawing to pay the bills, and go on that trip from your emergency fund that's in the bank, and not draw from the investments that are down. And guess what you do when investments recover? Because they always recover, Amy, you replenish the emergency fund when the investments have gone back up

Amy: Here's the "Simply Money" point. A diversified portfolio now gives you a much better chance of retiring on your timeframe, right? Regardless of what's going on in the economy. And this is actually gonna be one of a number of topics we're gonna get to at our retirement risk workshops that are happening on May 19th and 21st. So, if this is something that you are stressed out about, you're gonna wanna check it out as a free one-hour in-person workshop. All the details are at allworthfinancial.com for you.

There are three big scams that are targeting people just like you, and your neighbors, and your family right now. We're gonna detail what they are and how you can actually check for scams. That's next. You're listening to "Simply Money" here on 55KRC, THE Talk Station. You're listening to "Simply Money," I'm Amy Wagner, along with Steve Sprovach. How good are you at keeping your guard up? Because I'm telling you, scammers are trying to hit you from every single angle, every step you take, which is why we have the CEO of the Cincinnati Better Business Bureau, on every month. Jocile Ehrlich joins us with just a warning about the kinds of scams that your neighbors have been falling for lately, so that you can protect yourself and not fall for them too. A puppy scam? Come on...

Jocile: Yes. You know, today I thought that I would look at our BBB Scam Tracker files, and see what our friends and neighbors, people in our area, might have been victimized by, or at least tempted to be victimized by. And the puppy scams was number one here. You know, if you're looking to get a puppy, be aware that there are a lot of scammers in this space, and you need to be so very cautious. One of our friends and neighbors reported being a victim to this scam. And in this case, they asked for an upfront payment for the dog through a money transfer app. You know, your Zelles, your Venmos, what have you. That is usually a big red flag that this whole transaction might not be on the up and up. Scammers don't accept...

Amy: You know, Jocile, so many people are buying pets online these days. We got a pandemic puppy, right? And it was from somewhere up in Columbus, and we saw all the pictures online, and we'd never done it before. So, I could easily think of someone, you know, we need some money up front, half the money up front, all the money up front, not necessarily thinking twice, but yeah, you're right, that's a major red flag.

Jocile: It is a huge red flag. This is a new way of buying a dog, so to speak. You've really gotta do your homework and make sure that the seller is legitimate, that they haven't stolen that puppy picture from a legitimate vendor, posted it on their site. Scammers, as I said, are generally looking for Venmo and Zelle type payments. They're not accepting credit cards because, you know, you can dispute those charges, and you're likely gonna get your money back. Scammers don't want you to get your money back. That's not what this is all about. And they want your money up front because you're never gonna get that dog, to pay after the fact.

Now, in this particular person's case, to add insult to injury, they tried to get an additional thousand dollars to cover puppy insurance, to assure the puppy's gonna be delivered to you. They promised that they would give 95% of this money back to the gentleman, once the puppy was delivered. But he was starting to get wise to this, when he balked about paying for this insurance. Then they threatened to hold the puppy in quarantine, and he would be charged a fine of thousands of dollars for abandoning this dog. Well, at this point, the man got wise and realized that this was a scam, and he stopped communicating with people. But some people...

Amy: So, let's talk about this, Jocile, because I think you're right, this is new, but a lot of people are jumping on board, buying animals, buying dogs, buying pets online. So, how do you protect yourself?

Jocile: Well, again, check out the seller. Go to bbb.org, get a report on the seller, check Google, pull up reviews from Google on that. You've got to do your homework. Do not go into this just trusting. You know, and it's really hard to do because you or your children see this cute little puppy, and they fall in love immediately. It's really hard to put on your suspicious hat. And at BBB, you know, we are trained to be suspicious of everything for better or worse.

Amy: Yeah. You're listening to "Simply Money" tonight here on 55KRC. Jocile Ehrlich, from the Cincinnati Better Business Bureau, joining us tonight with a warning about the scams that your friends and neighbors are falling for. One of them a work-from-home scam. Jocile, I've been working from home since this pandemic started. What are the details on this one?

Jocile: Yeah. Big buzzword work from home, remote work, you see that in an ad. If you're looking for a job, people are gonna click on that really, really quickly, and scammers know that. So, they're putting that type of information in their little blurbs, as they try to attract you into their web. In this particular case, there was also an interesting twist to it. And while it's not surprising to do a virtual interview, it's not usually done over WhatsApp, that was a new twist for me. That's not such a common way to interview people. So, what happened to this person is he applied for a job because they said it's work from home, remote work. Was interviewed on WhatsApp, of course, was hired immediately, no background check, no nothing. The company was going to put money in his bank account so that he could buy an Apple computer from them to do his job. Is that not strange? They wanted his bank account number, so they could reimburse him through direct deposit, for the money that he was spending on this computer. That didn't raise a red flag. It did raise a red flag when they ask him for his bank login and password. They don't need that to make direct deposit. When he refused to give him that login, well, they had an alternate way of doing this. He could buy an Apple gift card to pay for this computer that he had to buy from them. And once he bought that computer, they were going to reimburse him what he paid for the gift card into his PayPal account. Now, he's still waiting to get his money back, and he's still waiting on his computer.

Amy: Oh, boy. And I imagine these work-from-home scams are out there in so many shapes and forms. You said there's also a phone scam going on right now.

Jocile: Right. We had one of our local people call or report on Scam Tracker. That they got a call from an attorney from someplace called the Senior Disaster Agency. Never heard of that one. This guy claimed that he had a check for the victim for almost half of a million dollars, and he was 1 of only 250 people throughout the country who were chosen to get this government check. The last I checked, the government didn't choose who to give people money to.

Amy: No.

Jocile: He was told, this I loved, that the call was being recorded by the Senior Disaster Agency, the FBI, and the Better Business Bureau. I found that very interesting. All he had to do was pay 1% of the taxes on this half million dollars, and the rest of the taxes were gonna be paid by this Senior Disaster Center. I thought that was very generous of them to pay all that tax money.

Amy: Isn't it, now?

Jocile: Isn't it, now? When he told them he couldn't pay even 1%, and that 1% of that half a million is quite a bit of money, he said all he could afford was $200. And they said, oh, that's fine, just go out and buy something called a OneVanilla gift card. That was new to me.

Amy: Yeah. me too.

Jocile: For this $200, and someone would come by the next day, pick up the gift card, and leave the package. Well, they picked up the gift card, and didn't leave a package, so...

Amy: Go figure. You know, Jocile, as you're talking about these scams, and I love that you come on to warn us about these every month, you keep referring to the Better Business Bureau Scam Tracker. And I'm wondering if you can just tell us a little bit more about what that is, and how we can use it.

Jocile: This BBB Scam Tracker is a searchable online sheet map of all the scams or attempted scams that have been reported to BBB, going back to 2015, if I'm not mistaken. I pulled up the map for the last year, and there were almost 43,000 scams reported. Now, also, as I said, it's searchable. You can search by keyword, you can search by "puppy," you can search by "charity." There is a scam-type data field, where we list all of the various classes of scams. You can search by that. It will tell you exactly when the scam happened, what it involved, where it was located, if there was any money lost that the victim reported. And you can read what the scam is, from the victim's own words. It's very, very helpful. And you can scroll down as granular as your particular neighborhood. Right now, I'm looking at the map and for whatever reason, the Michigan-Ohio-Kentucky area, is a hotbed, the largest hotbed of scams in the country...

Amy: Oh, gosh.

Jocile: ...of reported scams, lemme clarify that. Of reported scams.

Amy: What a great tool.

Jocile: So, you can hone in on Cincinnati proper, you can hone in on Hyde Park and see what's your neighbors are reporting is happening to them.

Amy: Listen, we are hit up almost every day, right? Something just doesn't sound right, doesn't feel right. This is a great tool. I have been on the BBB Scam Tracker many times before. It is super easy to access, super easy to use. If something doesn't sound right, just get in there, start clicking around, start searching for things. Make sure that if it's something that you think that you're gonna give money to or take part in, that you have done your research first. This is a great tool. It is free and easy to use, the BBB Scam Tracker. Jocile Ehrlich from the Better Business Bureau here in Cincinnati, thank you as always for these warnings and it's great information. You've been listening to "Simply Money" here on 55KRC, THE Talk Station.

You're listening to "Simply Money." I'm Amy Wagner, along with Steve Sprovach. I don't know about you, but I love a good all-inclusive resort. Give me some kind of a drink, with some kind of a umbrella in it on the beach, and don't bother me again.

Steve: Everything else is secondary, isn't it?

Amy: Exactly. Exactly. Well, I haven't been though to an all-inclusive resort since the pandemic happened, and apparently, they have changed in some significant ways. We're gonna tell you how they've changed. That's coming up. Some things that you need to consider before booking. If you are on the road to retirement, and Steve, I would say that basically, from the time you graduate from college on, we are all on the road. From the first day you start the job, you are starting on the road to retirement. Most of us are counting down to how many more years am I going to be doing this in some way, shape, or form. Regardless of where you are on that road though, I think there are different steps, different considerations that you need to be taking into account.

Steve: Well, there are, and, you know, 20s and 30s, you're just scrambling. You're just trying to get your career going, make some money, start your family. But, you know, when you hit your 40s, and I hit that recently, well, maybe a couple years ago, but that's where you start getting, you know, hopefully, the halfway decent pay raises and jobs.

Amy: It's your prime years.

Steve: Exactly. And you know what? That's where once you start getting your head above water, if you can just keep your head about you and say, "You know what? I'm gonna take that raise and I'm gonna start putting that into a 529 plan, or I'm gonna start adding a little bit more into my 401(k)." That's your chance to start saving serious money so you can retire, hopefully, at an earlier age than maybe you even thought. Because if you just keep going and, "Hey, I got this much coming in, it goes out, I don't know where it goes," you're gonna fall behind the eight-ball really, really quick.

Amy: Here's the goal. I think if you are in your 40s and you can be saving 15% to 20%, I realize that's on the high side and many of you maybe nowhere close to that, but hey, at least gives you a benchmark to aim for. And maybe every year, you increase that by a percentage or two. The problem I think for so many people in your 40s, is something called lifestyle creep, right? You're earning more than you ever have before, you get on social media, or you go to your kids' soccer games, and the neighbors are going to fill in the blank fancy vacation, or they bought such and such a new car. And you're trying to think, "Well, gosh, I'm making more now. I should do that. I should have that. I should go there," right? And what you don't know is how much credit card debt that person has, right? What their credit score is? How much they have saved for it? So, it's really easy to compare yourself to other people and start to spend more. And we would say, this is where you have to really kind of buckle down, and start to prioritize saving for retirement. And I get it. I'm in my 40s and it is so easy to say, "Oh, the kids are so expensive, right? Trey's on that travel basketball team this year, you know, this is an expense, I'm gonna wait a couple more years." A raise in tuition, whatever it is, there's never going to be a good time to start saving, you just gotta make it a priority now.

Steve: Trust me, you run outta time. I mean, you really do. It goes pretty darn quick. And in my case, we started having kids in our mid-20s. So, college was when we were in our 40s. You know, just as I'm starting to make halfway decent money, it's like, ''Oh, that's right, Steven goes away this year. How much is that check gonna cost me?''

Amy: Yes. A lot.

Steve: Oh my goodness. Yeah. So, it is really hard to budget. And don't forget estate planning, because if you've got kids, make sure you get that will, and powers of attorney done. You probably put it off in your 30s, but by the time you hit your 40s, get your documents in line, and have them prepared.

Amy: You're listening to "Simply Money" tonight here on 55KRC. As we look at the road to retirement, no matter how old you are, where you are on this road, there are definitely things that you need to make sure that you're doing. And if you are, maybe you're in the beginning of your 50s, somewhere in your 50s, this is where retirement starts looking like this is not so far away now. Maybe you can even start to picture it, what it looks like. Are you gonna travel? Are you gonna spend time with maybe grandkids, right? And I think part of that has to be, if you aren't comfortable in planning for this on your own, this is where I would say you gotta prioritize working with someone, right?

Steve: You do.

Amy: Find a financial advisor, figure out if you are truly on the right path.

Steve: Yeah. I also hit my 50s relatively recently, but, you know, this is where you gotta get serious because if you haven't set aside enough money, you've got some catch-up provisions, you're allowed to put more, once you hit 50, into your 401(k), in your IRA. But I also want to add, this is when you have to get serious about what's your plan to be out of debt by the time you retire. Get that mortgage paid off, get credit cards under control, and not have debt by the time you're targeting retirement age.

Amy: Yeah. And what, you know, I've seen so many times is okay, finally the empty nest, right? And so now it's like some people think like, "Well, we should focus on us now. And it's time to do that Europe trip, and it's time to do this, or that thing that we always put off because now the kids..." Well, yeah, you can do that a little bit. But I have seen people totally just blow it out of the water and then all of a sudden it's like, wait a second, now, we're five years away from retirement and we are way behind the eight-ball.

Steve: Yeah. And then you hit 60, which I also did recently, so, time flies.

Amy: You're like Benjamin Button, like you're aging backwards somehow.

Steve: Oh, mentally maybe.

Amy: All these things, just a couple years ago.

Steve: Yeah. But you know, in all seriousness, once you hit 60, it's no longer a concept. Retirement is real. And that's where you say, "Oh, okay, can I get this done in the next three years, four years, five years?" Whatever that number happens to be, get outta debt. That is number one, period. Okay? Build up your retirement assets, get them to the point that you need them to be able to retire, get that emergency fund funded. I mean, these are the things, there's such a difference between conceptually retiring, and the hardcore reality of, "Hey, this is gonna happen. Where's the money coming from?"

Amy: Yeah. Late 50s or early 60s, set up your myssa.gov account, right? That's your Social Security account. Because then you can really start looking concretely at what your expected Social Security benefit can be, right? This helps you kind of have a better concrete picture of what retirement will look like, what that income will look like.

Steve: Yeah. And not a bad idea to get a financial plan drawn up, but you know, if you're procrastinating or you're a do-it-yourselfer, I mean, you can at least get a basic understanding of how you're gonna pay for stuff. Take your Social Security. If you're married, your spouse's Social Security benefit, maybe 4% of what you've saved up in retirement accounts. What's that add up to? And will that pay your bills after taxes? That'll give you a rough idea. If you're not there, you gotta scramble, and do something to save more so that you can afford to retire when you want to.

Amy: Here's the "Simply Money" point, having a financial plan for each stage of your life can keep you going well on the road to retirement. An all-inclusive resort, right? Is there one maybe coming up this summer for you? Some changes have occurred since the pandemic. We'll talk about those next. You're listening to "Simply Money" here on 55KRC, THE Talk Station.

You're listening to "Simply Money." I'm Amy Wagner, along with Steve Sprovach. Vacation. I'm ready to...

Steve: I'm ready.

Amy: I know. I am ready to get out there. I feel like we've just had this kind of never ending...

Steve: Is it the weekend yet?

Amy: ...winter. Like, spring, you know, all of a sudden we're getting closer to summer. Really haven't had many summer-like temperatures. So, if you're thinking about summer vacation, what to do, the all-inclusive resort is still a thing, a big thing, but it has changed a lot since the pandemic. Now, think about this. I mean, during the pandemic, it didn't sound great, all those people packed in around a swimming pool, a swim bar.

Steve: Petri dish comes to mind.

Amy: Yes. Exactly. So, I think a lot of all-inclusive resorts took that time to step back and say, "Hey, how do I wanna change things here for when people do start to come back?" So, for those of you who are going back to an all-inclusive resort this year, let's talk about what they can expect.

Steve: Yeah. And it's not like the 80s, like that song was that, you know, where it's just a bunch of singles and, you know, lots of alcohol, and all that. You got the big players, Marriott and Hyatt, they're moving into all inclusive. And what they're trying to do is just make five star experiences for, you know, older people also. And this is handy because if you can go on vacation and not worry about, you know, should I tip, should I not tip? And how much is that drink and everything else, I think they're right on the money, they're capturing a trend. A lot more people as they come out of the pandemic, want to go out, they want to enjoy themselves, and not worry about the details.

Amy: And they wanna be spoiled. One of the changes that you'll see, luxury suites, private beaches, some of these places have built water parks, even added butler service. And I think, you know, when you think all inclusive, you think all the food, right? All the drinks. And I've been to places where you just get up and the breakfast buffet, like there's so many choices, it's mind boggling. What many of these resorts have done is cut back on the quantity of the food, and upgraded the quality.

Steve: Well, that's a good thing because looking at most Americans on vacation, I don't think we need more quantity.

Amy: That is true. So ,if you're trying to figure out if all inclusive appeals to you, right? If you're someone who likes to, you know, go to a bunch of different places, probably not for you. But if you are someone who just likes to kick back on the beach, with an umbrella drink in your hands, could be a great thing for you, and maybe the food's gonna be even better. You've been listening to "Simply Money" here on 55KRC, THE Talk Station.