As we move through early 2025, retirees and those nearing retirement are facing a stark new reality—one that traditional retirement advice may not be equipped to handle. Recent market volatility, driven by rising tariffs and unusual behavior in the bond market, is challenging long-held assumptions about how retirement portfolios should work. At Fiat Wealth Management, we believe it’s time for a serious retirement reality check.

The Markets Have Changed—Have You?

The financial environment we’re navigating today looks nothing like the one that shaped many current retirement strategies. The last time we saw tariff policies this aggressive, the 401(k) hadn’t even been created. Today, we’re witnessing a dangerous combination: extreme treasury volatility, equity instability, and bonds that no longer provide reliable downside protection.

For retirees actively withdrawing from their portfolios, these market dips aren’t just paper losses. They can create permanent financial damage—locking in losses that reduce lifetime income and erode peace of mind.

Three Key Vulnerabilities in Today’s Retirement Planning

1. The New Retirement Portfolio Reality
Traditional allocation models built for decades of bull markets are showing their age. Drawing income from a declining portfolio can quickly become a math problem with devastating consequences. Simply put, what worked yesterday may not work tomorrow.

2. The Diversification Illusion
Many investors believe they’re diversified, but holding the same underlying assets across multiple accounts isn’t true diversification. The recent market turbulence has exposed a hard truth: conventional diversification strategies didn’t prepare retirees for a world where both stocks and bonds drop simultaneously.

3. The Tax Efficiency Blindspot
Too often overlooked, tax efficiency becomes even more critical in volatile markets. When account values fall, inefficient tax withdrawals can amplify losses. Retirees need to consider how and when they access their accounts, especially when their tax-deferred savings are essentially co-owned by the IRS.

Why Timing Matters: Actionable Steps for Early 2025

The events of today may only be the beginning. Tariff-related economic shifts have the potential to ripple across markets for years to come. For anyone within five years of retirement, this is a pivotal moment. The choices you make now could shape the next two decades of your financial life.

This is not a call for panic—it’s a call for precision.
Ask yourself:

• Can your current withdrawal strategy withstand simultaneous drops in both stocks and bonds?
• Have you evaluated your plan under the stress of today’s economic climate?
• Is your tax plan adaptable to shifting market and income dynamics?

Waiting for perfect clarity could be the most costly decision of all. Once the full picture comes into focus, your window to act may have already closed.

Let’s Make Your Strategy Work for Today’s Reality

At Fiat Wealth Management, we help clients face today’s challenges with clarity and confidence. Whether it’s evaluating risk exposure, identifying smarter withdrawal strategies, or optimizing tax efficiency, our team is here to guide you through a changing landscape.

If the current environment has raised questions about your retirement plan, we encourage you to schedule a visit with our team. Proactive planning today can help safeguard your income tomorrow.

Your retirement shouldn't rely on outdated assumptions. Let's build a strategy that’s designed for today’s world.

hello@fiatwm.com | 952.426.9116