You Cannot Predict the Future. Your Financial Plan Should Not Require You To. Summer often gives us an opportunity to step away from the daily noise and look at life from a broader perspective. That perspective is particularly valuable when it comes to investing and retirement planning. Every day brings another prediction about artificial intelligence, inflation, interest rates, tariffs, consumer spending, corporate profits, geopolitical conflict, and where the markets may be headed next. Some predictions will prove correct. Many will not. The challenge is separating information that deserves our attention from noise that can lead to unnecessary or emotional decisions. THE MAIN PERSPECTIVE Everybody wants to know what will happen next. There is a reasonable case for continued economic and market growth. Artificial intelligence is helping companies improve efficiency and profitability, and many businesses have only begun to explore its potential. Consumers have also continued spending, supporting economic activity despite pressure on many household budgets. There is an equally reasonable case for greater uncertainty. Inflation, tariffs, higher interest rates, and geopolitical conflicts can pressure consumers and businesses while disrupting energy markets and supply chains. No one knows which forces will have the greatest influence over the next year or two. That is precisely the point. Whatever returns the markets ultimately provide, your retirement plan cannot depend on favorable conditions continuing uninterrupted. We do not need to predict the future to prepare for it. There are two broader realities we can reasonably expect. First, the markets will decline again, even if long-term economic growth continues. That does not mean a decline is imminent. We simply know that markets move through periods of growth, decline, recovery, and renewed growth. We do not know when the next decline will begin, how significant it will be, or how long it will last. Second, today's market leaders will not lead forever. Some of today's strongest companies may remain successful for decades, but leadership changes as industries mature, technology evolves, competitors emerge, and investor expectations shift. Artificial intelligence may continue creating significant value. Eventually, however, using AI will become an expectation rather than a differentiator. Investors will focus on which companies can convert it into sustainable profits. We do not need to identify the next winning company, sector, or investment theme. We need a strategy that does not place the success of your retirement in the hands of one prediction. WHY THIS MATTERS You have heard me say this many times: the objective is not to earn the highest return possible. The objective is to determine the return your financial plan requires and then take only the amount of risk reasonably necessary to pursue it. Consider two families preparing for retirement. One family's plan requires an average long-term return of approximately 4.5% to accomplish its goals. Another family's plan requires 7.25%. Those families should not automatically own the same investments or accept the same level of risk. The family requiring 4.5% has greater flexibility to protect more of what it has already accumulated. There is no reason for that family to accept the same amount of risk as someone whose plan requires a substantially higher return. The family requiring 7.25% faces a different set of decisions. Automatically taking more investment risk is not the answer. We must first evaluate the factors driving that required return, including retirement timing, spending, savings, Social Security, taxes, future income needs, and longevity. Adjusting one or more of those decisions can improve the plan without exposing the family to unnecessary risk. This is also why we use a bucket strategy to structure retirement income. Most of you already understand the role your buckets play. Money needed sooner is positioned differently from money that will not be needed for many years. This helps protect near-term income while allowing long-term assets the time needed to pursue growth and recover from periods of market weakness. The strategy helps keep monthly retirement income from depending on what the stock market happens to be doing at that moment. We are not eliminating investment risk. We are matching each dollar's risk to its purpose and timeframe. Risk becomes more manageable when each dollar has a purpose and a timeframe. | 
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July 28, 2026
