U.S. Economy Shows Resilience Amid Strong Retail Sales and Jobless Claims Decline, as Earnings Season Unfolds
Capital Investment Advisors
Helping Families Find Happiness in Retirement | Retirement Planning | Income-Oriented Investment Portfolios
There was a pair of economic data released last week that continued to show the resiliency of U.S. economy. Retail sales increased 0.4% on the month, up from the unrevised 0.1% gain in August and better than the 0.3% forecast. Additionally, jobless claims declined 19,000 to a seasonally adjusted 241,000, lower than expected estimates. Together, both reports illustrate that consumers, who power close to two-thirds of the economic activity in the U.S., are still spending money and the labor market continues remain intact.
This week is a little quieter on the economic data front, but earnings season remains in full swing with a couple of major companies reporting this week. We continue to watch in monitor these earnings reports as they come in as a way to help gauge the financial health and outlook of some of the biggest companies in the world. Quarterly earnings can serve as a barometer for the economy, and investors use this as an indicator for broader economic trends.
Bottom Line:
We are less than two weeks away from the U.S. presidential election. While the election is still close to a coin flip in terms of who wins, we remain steadfast in our belief that historically speaking, the market has performed well regardless of the balance of power in Washington D.C.
- Retire Sooner Team at Capital Investment Advisors
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???This week on Money Matters- Wes Moss discusses the dow high, new 401(k) limits, and private equity
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Our clients, the Croft's, just took their first trip to Yellowstone and Grand Tetons National Parks. They had a wonderful time and would recommend for everyone! Take a look at some of their amazing photos! Please note, the Croft's have given us permission to share their photos.
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5 Money Secrets Of The Happiest Retirees
Securing a happy retirement goes beyond just saving money. While having financial resources is crucial, living a fulfilling life requires more. Here are the Five Money Secrets of the Happiest Retirees to help guide your path:
Habit #1: Build a Minimum of $700,000 in Liquid Savings
Research shows that the happiest retirees have at least $700,000 in liquid savings—easily accessible in assets like stocks, bonds, mutual funds, and cash. While this figure may seem high, it’s important to remember that this is the median amount. The happiest retirees, on average, have $1.25 million. The world has changed, and inflation has significantly impacted the retirement savings landscape, making $700,000 the new benchmark for financial security in retirement.
That said, individual needs vary. Even if this number seems daunting, achieving it with steady savings over time is possible. Importantly, retirees experience a clear jump in happiness as savings grow to this threshold, though the benefits taper off beyond $700,000 due to the Plateau Effect.
Habit #2: Pay Off Your Mortgage According to research, retirees who have their mortgage paid off or within five years of payoff are four times more likely to be happy. Mortgage payments, while necessary for homeownership, often feel like a burden. Freeing yourself from this responsibility can bring a significant sense of relief and reduce monthly expenses, allowing retirees to focus their money on experiences, family, and enjoying life.
If you’re debating whether to pay off your mortgage or invest elsewhere, consider the One-Third Rule. If you can clear your mortgage with less than a third of your non-retirement savings, it’s often worth doing.
Habit #3: Establish Multiple Streams of Income Happiest retirees typically have three separate income streams, whereas less happy ones rely on fewer. Diversifying income—whether through Social Security, rental properties, pensions, or investment accounts—provides both financial security and peace of mind. It also offers flexibility for tax planning and protects against any one source drying up.
Habit #4: Invest with a Long-Term Mindset Happy retirees understand the importance of participating in the market, even during uncertain times. Perfect timing isn’t necessary; being in the market, even with poor timing, tends to outperform sitting in cash. For instance, a $10,000 investment in the S&P 500 over decades, even with imperfect timing, significantly outgrows conservative options like Treasury Bills.
This "tomorrow investor" mentality helps retirees stay engaged and confident during market fluctuations, keeping their portfolios on track for long-term growth.
Habit #5: Spend Wisely Using the 4 Percent Rule
The 4 Percent Rule, popularized by financial planner William Bengen, suggests that retirees can safely withdraw 4% of their savings each year (adjusted for inflation) without depleting their funds. This approach has proven reliable over the years, ensuring that savings last 30 to 50 years in most scenarios.
The key to success is maintaining flexibility—being willing to adjust withdrawals based on market performance can make your nest egg last longer.
Bottom Line Committing to these five habits can help ensure a happier, more secure retirement. While money alone doesn't guarantee happiness, following these strategies increases the odds that your retirement years will be as fulfilling as possible.
A Quick Reminder
This is provided as a resource for informational purposes and is not to be viewed as investment advice or recommendations. This information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. The mention of any company is provided to you for informational purposes and as an example only and is not to be considered investment advice or recommendation or an endorsement of any particular company. Past performance is not indicative of future results. Investing involves risk, including the possible loss of principal. There is no guarantee offered that investment return, yield, or performance will be achieved. The information provided is strictly an opinion and for informational purposes only and it is not known whether the strategies will be successful. There are many aspects and criteria that must be examined and considered before investing. This information is not intended to, and should not, form a primary basis for any investment decision that you may make. Always consult your own legal, tax, or investment adviser before making any investment/tax/estate/financial planning considerations or decisions. Investment decisions should not be made solely based on information contained herein. The S&P 500 Index is a market capitalization-weighted index based on the results of approximately 500 widely held common stocks. The Dow Jones Industrial Average is one of the oldest and most commonly followed equity indexes, it is a stock market index that tracks 30 large, publicly-owned blue-chip companies traded on stock exchanges in the United States. The Consumer Price Index (CPI) measures the overall change in average prices paid by consumers over time. Please note this index is unmanaged and an investor cannot invest directly in any index. Performance results are for informational purposes only, moreover, index performance does not reflect the deduction of advisory fees, transaction charges, and other expenses.