The 3 Factors That Can Destroy A Peaceful Retirement.

By David Katz

Katz Capital Management

It’s your first day of retirement, the sun is shining, the birds are chirping and all is well. You begin to day dream about all the wonderful adventures you have planned for your retirement. The places you always wanted to visit, family you haven’t seen in years, and hobbies you can’t wait to start doing. Then you turn on the news, quickly your smile turns into a frown when you hear all the negative, disturbing news about the possible road blocks to a happy and successful retirement.

While there are many road blocks to prevent you from enjoying a wonderful retirement, lets focus on just 3 that can destroy a peaceful retirement.


Inflation is a measure of how far your dollar will stretch. How much bang you can get for your money. For example, a dollar today would be worth only 25 to 35 cents, twenty-five years from now. Put another way, you will need 2 to 3 times your current income on your last day of retirement than on your first day of retirement. Historically, inflation has averaged about 3-4 percent over the last hundred years.

Most experts agree that if your financial accounts can maintain an interest rate over the historical inflation threshold of 3-4 percent, you should have a fighting chance to be in good shape. Of course, every once in a while, the economy gets thrown for a loop and inflation can rise into double digits. Planning for these occurrences is very important.

One way to curb inflation is to raise interest rates, which is what the Fed has been doing for the last couple of years. Now this is good for your money market accounts or your CD’s, but it hurts the housing markets, creates unemployment and really hurts the stock market. Just last year the stock market as a whole was down 20 percent.

You may be thinking I’m retired, how does that affect me? We if you still own 401k’s or 403b’s or IRA’s then your accounts are suffering. Also if your living off of dividend paying stocks and the company cuts the dividend, that could possibly have a big impact on your income. Be very careful not to let this silent killer destroy your retirement.


Our country is 31 trillion dollars in debt. Put another way each American taxpayer owes $247,882 dollars. Now if that isn’t bad enough, we have another 172 trillion dollars of unfunded obligations, which includes Social Security and Medicare just to name a few. So how do we bring this down? We could cut programs, but that most likely won’t happen, the only way I see our country getting a grip on our debt problem is by raising taxes.

In 2017 President Trump created the Jobs and Tax Act. What this did was to lower taxes across the board. This was good for workers, because they were getting more money in their pay checks. The problem was it lowered taxes, which meant the government was taking in less money, but the governments expenses continued to climb. Now on 12/31/2025 that bill is set to expire. What do you think will happen? You guessed it, taxes are most certainly going to go up. It’s not a republican thing or democratic thing it’s simply a math problem. Taxes just have to go up.

So if that’s true, and believe me it’s true, and you have money in 401k’s or 403b’s or IRA’s, which have never been taxed before, how will that affect your planning? So if your plan is to take withdrawals from theses accounts to live off of, and taxes go higher, you might need to withdrawal more money to compensate for the higher taxes. The result is that your account could deplete quicker than you anticipated. Are there options available to help curb the expected higher tax rates? Yes, but it takes proper planning. Please don’t wait until 1/1/2026 to start planning, do it now and stay ahead of the game.

Health Care

One area of planning that most people neglect is health care planning or long- term care planning. It’s the one factor that can wipe out a nest egg faster than anything else. According to every government statistic or survey done, there’s a 70 percent chance that at lease one spouse age 65 or older will need long term care. The average long term care event is 3 years, for Alzheimer’s it’s 8 years for Parkinson’s it’s 10 years and for stroke it’s 12 years. Right now, the average one year cost for care in San Diego is $85,000 dollars.

One consideration that most people don’t factor into their budget when calculating for a long-term care event is the well spouse. If there is a well spouse living at home, that well spouse still has to eat, pay property taxes, gas and electricity, cable, gas for the car etc etc. this all adds up and fast. Most people think that Medicare pays for long term care, this is not true. Medicare will pay for just the first 20 days, if you own a medigap policy that will pick up the next 80 days, but after that it all stops and your now responsible for 100 percent of the costs.

Every state has their own programs called Medicaid, in California it’s called Medical. These programs are meant for poor people who need government assistance. There are many requirements you need to meet before you can qualify for these programs. The big one is the spouse receiving the care needs to spend down their assets to $2,000 dollars. Before you go this route do a lot of research and ask a lot of questions to make sure you are eligible. With proper planning, you can have peace of mind for the unexpected health issues that may arise.


Let me share a story about a client of mine name Rita. She gave me her permission to share this story to you (Thank you Rita) Rita is a 74-year-old widow. Her husband and her spent 46 years building their nest egg together. Rita’s husband passed away a few years ago, leaving Rita with the task of managing the nest egg. Herself. This was a big responsibility and Rita was scared to death that she would lose all the money her and her husband spent growing it. When I met with Rita I gently held her hand and reassured her that everything will be ok.

Together we formulated a plan of action that gave her the peace of mind knowing she will never run out of money, which seniors age 65 or older is there greatest fear. What is the silver lining in all of this? Our plan protected Rita against inflation, taxes, long term care and other factors that could have an impact on her remaining retirement years. Now with this plan in place, Rita can take vacations, visit her children and grandchildren, who live out of state, and just enjoy everyday of life without worry or fear. She told me she’s finally happy and even took up yoga and meditation classes and is planning a long cruise with some of her friends this summer. This is what a peaceful retirement should look and feel like, and I wish that for everybody who reads this article.