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Twin Risks in Retirement

By Steve Gaito

McDowell Countysteve gaito Mcdowell county retirement resource management


For many people retirement, today is filled with challenges. Two of these take the forefront. Inflation and Market Volatility. Some believe that it is what it is, a temporary obstacle in their retirement path. But for most, it can be the most challenging time in their life. There is a quote credited to philosopher George Santayana that is very familiar to most. “Those who do not learn history are doomed to repeat it” There have been many similar quotes from presidents to Winston Churchill, but it is wise advice.

What have we learned about inflation? For most retirees today they must go back to the 70s to see real inflation. I know I remember gas lines and my parents complaining about the price of groceries. That combined with high-interest rates made living within a budget difficult.  There was also a period of great market decline. It was not as significant as the market correction in the early 2000s, but it did give us some perspective. How did these people survive these difficult times? The reality is that they lived in very different times. Household debt was almost zero and for most, the defined contribution plans (401(k)s) were just being introduced and retirees had corporate pensions and Social Security to provide their income. That alone was a significant difference. Because their income was consistent, they only had to worry about one of these risks, and part of that was addressed with cost-of-living increases with Social Security.

The next period to look at was the early 2000’s and that was market volatility. This period is known as the lost decade because the stock market return for that decade is the only period where there was a negative return for the entire decade. The good news is that inflation was between 1-3% instead of the 6-15% it was in the ’70s. I worked with many clients through this time and saw firsthand the stress that relying on the market for income caused. Honestly, there were few good options for income. With low-interest rates, you could not go to the bank and put your money in and get a decent return. If you had to rely on the market that is what you had to do. Many people had to choose to go back to work or significantly reduce their standard of living. It was nothing like they had planned.

So, what can be learned so we do not repeat these scenarios? The first takeaway is that you must create income like what pensions are provided. It would be best to have this income that can increase with inflation. This can be accomplished with several options depending on your circumstances. This income is what will get you through the down markets and with the potential for increases in income an option to deal with inflation. This is not a difficult thing to accomplish. First, you must figure out your living expenses and create an income stream coordinated with Social Security. This will put you in a great position to reduce the stress of the market and inflation.

To see how I can create these income plans for you contact my office at (828) 559-0299 or email to schedule your free initial consultation. Let me help you avoid repeating history.


Steve is the owner of Faith-Based Health Care and Retirement Resource Management. He is a National Speaker on the topic of Social Security optimization, quoted in national publications like Money Magazine, US News and World Reports, and Fox Business. Steve loves to educate and teach on financial topics like taxation of retirement accounts, long term care, healthcare, and efficient savings plans for small businesses. He has provided financial planning for missionaries through the International Mission Board. You can find Steve at 68 South Main St. in Marion, NC by calling 828-559-0299, email or visit his website at

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