Total Financial Solutions President/CEO Arif Halaby is talking about the current state of the economy, and what he believes it means for your future retirement.

The first aspect of the economy Halaby examined during the latest “Total Financial Solutions Safer Money Hour” was the social security system, which he noted has had to tap into its reserves for yet another year to cover the 2018 benefits.  

“We were hoping that the strength of the economy in 2017 would put more money back into the social security system, not less, and it did,” explained Halaby, a Certified Estate Planner. “However, there’s just an automatic thing that’s happening, that’s about 10,000 of you every single day are turning age 62.”

Related: Total Financial Solutions: Why Choose A Roth IRA, Roth 401(k)?

Because individuals become eligible for social security benefits at this age, many people from this 10,000-per-day group are starting to collect their benefits, whether they’re still working or not.

In addition, less and less people are choosing to wait an extra few years to collect their benefits — which would earn them a higher benefit than if they collected closer to age 62 — because of the widespread notion that the social security system may be bankrupt in the coming years.

“People (are) starting to take it early because they think it’s not going to be there,” said Jeff Girard, Halaby’s co-host on “Total Financial Solutions Safer Money Hour.” “The buzz is that social security is going to wash up by 2033, something like that.”

In contrast to the precarious social security system, Halaby noted that the nation’s GDP, gross domestic product, is up significantly under the Trump administration, compared to Obama’s.

“What does (GDP) mean? The amount of goods and services produced in a country,” he explained. “So I buy a laptop computer for $1,000, that’s $1,000. If you are paid $50,000 for your job, that’s $50,000… So all the goods and services (are) added up, and it says, ‘Are we doing more of it, or are people doing less?’”

Halaby continued that the GDP rate hovered between 1.1 and 1.8 percent under the Obama administration, but never over 2 percent, while the current estimate is between 3.8 and 4.2 percent.

“That means the economy is growing at twice the amount, so if there was one computer being sold for $1,000, people can now afford to have two computers in the system being sold,” Halaby explained. “Now two people are hired at $50,000… This is a huge change.”

However, at the same time, the Southern California housing market seems to be sending up some red flags, causing concern by realtors in Santa Clarita and beyond, according to Halaby.

“One of the top realtors in Santa Clarita … says (to me), ‘Take a look at the listings that are being reduced,’” Halaby said. “There was a list that was enormous where price reductions were happening this week. People are panicking just like they did with the social security… We’re starting to see now (in the media) that Southern California home sales are slowing down, and is it a warning sign that there’s a crash ahead?”

When it comes to the stock market, record highs are currently being seen, but Girard noted this may not mean what most people think for their at-risk money in retirement accounts like IRAs or 401(k)s.

“When we really break it down and we take a look at it, I don’t think everyone’s doing as well in these accounts as the markets report,” he said.

Halaby added that the average person’s retirement account typically isn’t doing much better than 3 to 5 percent, despite paying continuing fees.

“They look at their account and they say, ‘Gosh, it seems like the only thing that’s happening is my brokers are charging fees and they’re doing well. Why are they always winning regardless of if the market goes up? What did I buy?’” Halaby said.

Taking all of these different aspects of the economy into consideration, Halaby has one piece of advice he believes everyone with at-risk retirements funds should consider:

“I think you ought to start looking at safety in your retirement accounts,” he said.

Halaby and his team at Total Financial Solutions pride themselves in helping their clients design a higher income strategy, protect their principal and lock in their gains, all while securing reliable income for retirement.

“I think you have to take a look at the steps in which your retirement account goes up, when does it go up, when do I make money, and when does it go down,” Halaby said, referring to individuals whose retirement funds are in at-risk accounts. “If you’re okay with the risk and paying the fees that you do in order to get that risk, then great. Then pay attention and ride it up and down. If you want safety, that’s what we do.”

For a free consultation at Total Financial Solutions, contact them by calling 888-99-RETIRE or by visiting their website www.TFSwealth.com.

Total Financial Solutions offers assistance with preparing for retirement in Santa Clarita and the surrounding valleys. Santa Clarita financial professional Arif Halaby, a Certified Estate Planner, and Total Financial Solutions staff work with people of all ages, helping them protect, grow and preserve their assets through an individualized approach. As a well-known financial professional, Arif Halaby is also the host of “Total Financial Solutions Safer Money Hour” on KHTS AM-1220. Launched in 2004, the show offers listeners retirement planning tips and guidance for dealing with today’s ever-changing financial needs.  

Total Financial Solutions, Inc.

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Newhall, CA 91321

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Arif Halaby, Total Financial Solutions, Financial Planning, Planning for Retirement, Retirement Planning