Even with continued chatter about inflation and economic slowdown, the latest May 2025 Sound Financial WealthShield Trend Report paints a clearer picture: the economy is proving more resilient than expected. For retirees, that means opportunity and caution need to walk hand in hand.
Here’s what’s unfolding—and how it may impact your retirement strategy.
The Federal Reserve has paused interest rate hikes, signaling that inflation is cooling—but not gone. In short, they believe the risks for higher inflation, increased unemployment, and slower economic growth have risen but not materialized. For retirees, this stability helps protect fixed-income investments, annuities continue to provide opportunities, and makes it a good time to review cash reserves and bond strategies to ensure they still support your income needs.
Employment remains strong, supporting consumer spending and the broader economy. This helps reduce near-term recession risk, which is encouraging for retirement portfolios relying on steady equity performance. Still, it's wise to be cautious with large withdrawals during periods of market uncertainty.
Corporate earnings—especially in tech and consumer sectors—are better than expected. That’s helping the market hold its ground and shows strength in sectors that many retirement portfolios rely on for growth and dividend income.
While the economic outlook is positive (well, maybe a strong “just ok”), economists haven’t ruled out a mild recession later in the year. US GDP was negative in the first quarter of 2025, so a second quarter in a row would meet the classic definition of a recession. The key for retirees is not to overreact, but to stay prepared. That means having a reliable income plan, keeping a tax-efficient withdrawal strategy in place, and avoiding emotional investment decisions.
At Sound Financial Strategies Group, we specialize in helping retirees live confidently. If you're wondering whether your plan is still on track, now is the perfect time for a review.
For more detailed information, feel free to read Clint’s full May Trend Report.
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The opinions expressed are those of Sound Financial Strategies Group, LLC (“Sound”). The opinions referenced are as of the date of publication and are subject to change without notice. This information is not a recommendation to buy or sell a particular security or to invest in any particular sector. Forward-looking statements are not guaranteed. Sound reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs, and there is no guarantee that its assessment of investments will be accurate. This information is not intended to be investment advice and does not take into account specific client investment objectives. Before investing, an investor should consider his or her investment goals and risk comfort levels and consult with his or her investment adviser and tax professional.
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