Bolster Your Nest Egg Now With These Tips…
When the facts change… I do something totally unexpected.
And, to paraphrase Bob Dylan: “The facts, they are a’changin.’”
So, El Jefe, what facts are a’changin’?
The fact that I am not convinced American retirees can adequately prepare their nest egg for the future.
When I first started down this path of financial and economic pontification and prognosticating way too many a year back, one fact was generally rock-solid: American stability.
Yes, America had its foibles, and yes there was the perennial worry about Social Security’s longevity. But by and large, people expected the America of tomorrow to be like the America of today.
Now…
American stability is in question.
The Trump administration has thrown so many monkey wrenches into the works since reclaiming 1600 Pennsylvania Avenue that monkey wrenches are darn near endangered now. Some of it’s good. Lots of it, not really.
But the overarching theme is that anything that once resembled the norm is now at risk.
And therein lie my concerns personally and for anyone, like me, who is close to retirement.
What I mean is that the Trump administration’s actions show that it wants to take a cleaver to much of what defines stability in America. That’s particularly worrisome in the nest egg arena.
I know some will disagree with my take and say that Turmp is simply shaking up the status quo. Possibly true. Either way, what’s taking shape is clearly impacting large segments of America—from small business owners to oil and gas companies to retirees lamenting the impacts they’re feeling in their retirement accounts from the roiling markets. Not to mention, growing concerns about a GOP Congress that looks set to slash $880 billion from Medicaid.
DOGE, meanwhile, has monkeyed around inside the Social Security Administration and wants to cut the workforce in half, a move that would play through the program in numerous negative ways.
And then there’s all the other stuff, particularly the stuff tied to the administration’s desire for a weaker dollar. That’s an inflationary policy, since it implies higher costs for all the finished goods and raw materials that America—out of necessity—must import from overseas.
All of which leads me to the “something totally unexpected:” My revised thinking on what a nest egg allocation should look like in 2025 and beyond.
That allocation, I will note right up front, now should include exposure to bitcoin.
Note: This isn’t going to suddenly morph into a bitcoin dispatch. I will only say that as part of a broader nest egg strategy, a 5% allocation to bitcoin is not going to destroy your retirement if bitcoin sinks into the depths of hell. But it does offer the likelihood of asymmetrical gains that will far more than offset the losses your portfolio has probably suffered amid the on-again/off-again tariff debacle of recent months.
Bitcoin won’t pay you any income, true… but the returns that bitcoin will chalk up for the patient investor will blow away the combined capital gains and income that other assets will chalk up over the remainder of this decade.
See? That’s all I will say about bitcoin.
To that prescription, I will add that you should also now be packing your nest egg with various forms of safety that are not US Treasury debt… which is what my upcoming Passive Income Workshop is all about.
One of the other very real risks that Americans of all ages face is the government purposefully reneging on US debt in some fashion as a way to haircut the IOUs that Uncle Sam owes to the world.
I guarantee the government’s spin-doctors won’t call it a “default.” They’ll gin up some catchy euphemism. But the result will still be the textbook definition of default…
And that, in turn, will see the value of US debt plunge.
Which will particularly eat away at the nest eggs of retirees living on a fixed income.
The income their bonds kick off will be far below the rate of inflation. Equally unsavory is that instead of capital gains to help offset that inflation, retirees who own a bunch of bonds are going see capital losses as the market value of existing bonds collapses.
You don’t want to be a part of that.
You do, however, want to be part of various types of alternative assets that spit out substantial dividends but with something similar to bond market stability.
You also want access to income assets that offer appreciation potential to counteract inflation. And you want income-based non-dollar assets to counter both inflation and a dollar in decline.
That, it turns out, is the nutshell for the Passive Income Workshop I am working on.
A lot has changed in the broader economy and in the new administration’s policies. All of that impacts a nest egg. So, as the times are a’changin’, so too is my approach to building a portfolio for a nest egg.
The portfolio I’ll be showing you in my Passive Income Workshop isn’t designed as a shoot-out-the-lights portfolio that aims to help you build quick wealth before retiring. Too much risk in that amid this kind of stock market, economy, and policy backdrop.
Instead, it’s designed to help you shape, recalibrate, and jigger an existing nest egg so that that your assets can better weather the changing times.
I’ll wrap this up by stealing a bit more from Bob Dylan:
As the present now will later be past
The order is rapidly fadin’
And the first one now will later be last
For the times, they are a-changin’
Seems about right.
