Transcript:
A lot of people walked into 2026 feeling pretty good about their finances. The market had a solid year. Statements looked better. Balances were up. And I think that’s exactly why this year feels a little more dangerous than people realize. Because when things look good, we stop paying attention. I’ve had a lot of conversations lately that start with something like, “Well, last year was great, so I think we’re fine.” And that makes sense, but it also misses something really important.
What worked last year doesn’t automatically protect you this year. Your retirement risk isn’t just about how much money you have. It’s about what the world around that money is doing. And a few things shifted as we came in to 2026. Inflation hasn’t gone away. It’s slower than it was a couple of years ago, but prices didn’t come back down. That means your cost of living is still higher than it used to be. Interest rates are different. Bond yields are different. How safe money works is different. and taxes, especially for people with higher incomes or growing portfolios, are quietly becoming a bigger piece of the picture.
All of that changes how your retirement actually works, even if your account balance didn’t move much. And here’s what I mean. A lot of people think their biggest risk is the market going down. But for people who are close to retirement or already retired, one of the biggest risks is something called sequence of returns. That’s just a fancy way of saying that the timing of good and bad market years matters a lot more once you’re taking money out.
When you’re still working and adding money, a down year is annoying, but you’re buying shares cheaper. When you’re retired and pulling income, a down year early can do a lot of damage, even if markets recover later. And with how 2026 is shaping up, that risk matters again. We’re coming off strong market years. Prices are still elevated and a lot of people are counting on those gains to fund their future. That combination can create a false sense of safety.
People see a higher balance and think they can spend more, take more risk, or retire sooner without realizing that the environment around that money has changed. Another thing that’s shifting is taxes. More people are realizing that a bigger chunk of their retirement savings is sitting in accounts that haven’t been taxed yet. So, when they start pulling money out, they’re not just dealing with market risk, they’re dealing with tax risk, too. Higher income retirement can mean higher taxes on Social Security, higher Medicare premiums, and more money going to the IRS than they expected. That’s not something you see on a brokerage statement.
So, when I say your retirement risk changed in 2026, I don’t mean something dramatic happened overnight. I mean, the mix of inflation, interest rates, market levels, and taxes quietly moved the goalposts, and most people are still using last year’s picture to make this year’s decisions.
If you’re working toward retirement or already there, this is really important time to zoom out and ask a few simple questions. Not did my account go up, but how does this actually turn into income? How much of it do I really keep after taxes? And how exposed am I in the next few years if things look different?
Those are questions that tell you whether you’re actually secure or just optimistic. And optimism is great, but clarity is better. That’s what helps you make decisions that still work even when the environment changes. And in 2026, it definitely has. If this made you stop and think about your own situation, that’s usually a good sign. If you want to talk through what this means for you, there’s a link below where you can schedule a quick conversation with me.
