Default Risk on the Rise
The number of companies at the highest risk of defaulting has reached an 11-month high, driven by worsening credit conditions and global trade uncertainty.
Source: Moody’s Investors Service, July 2025
Why it matters:
We’re seeing clear stress in lower-rated corporate debt — especially companies with weak balance sheets. This reinforces the need to avoid chasing yield and blindly believing that bonds are the only portfolio stabilizer. Diversify from bond funds if you haven’t. When using bonds, focus on high-quality credit reduce the risk of defaults impacting your income strategy.
Electricity Demand Surges — Thanks to AI
From 2005 to 2020, U.S. electricity demand was flat. Since 2020, it's grown at 1.7% per year — largely driven by AI and data center usage.
Source: U.S. Energy Information Administration, July 2025
Why it matters:
This shift has direct investment implications. Utilities, infrastructure, and energy producers that support AI expansion are emerging opportunities. As part of your portfolio, we seek exposure to sectors benefiting from secular trends like this — not just market momentum.
Dollar Weakness Creates Winners & Losers
The U.S. dollar posted its worst first-half performance in 50 years.
Source: Bloomberg FX Data, June 2025
Why it matters:
A weaker dollar makes international travel more expensive — something to consider when planning vacations. But on the upside, it boosts profits for many U.S. multinationals that earn revenue overseas. This is a tailwind for some equity holdings.
Amazon Inflation Hits Essentials
The average price of 2,500 low-cost items on Amazon rose 5% in the first half of 2025.
Source: Marketplace Pulse, July 2025
Why it matters:
Even modest inflation on everyday items compounds over time — and can erode retirement purchasing power. Well-laid income plans aim not just to cover your basic needs, but to grow your cash flow in step with real-world inflation.
IPCG — The Review Meeting Question
A powerful question: "If something happened to you tomorrow, would your family know who to call, where everything is, and what to do?"
Source: Internal Planning and Communication Guide (IPCG)
Why it matters:
It's about more than money — it’s about making life easier for the people you care about.
U.S. Debt Interest Now $3.3 Billion Per Day
The U.S. government is now paying $3.3 billion in interest daily — nearly 25% of all federal tax revenue.
Source: Congressional Budget Office, July 2025
Why it matters:
High debt service crowds out government flexibility and increases the risk of future tax hikes. This is why we’re proactive about tax diversification — Roth conversions, asset location strategies, and managing future Required Minimum Distributions (RMDs) with intention.
Buy Now, Pay Later = Credit Red Flags
Lenders are now factoring in buy-now, pay-later (BNPL) usage when evaluating consumers for mortgages and credit cards.
Source: Consumer Financial Protection Bureau (CFPB), July 2025
Why it matters:
This trend can impact your children and grandchildren. Frequent BNPL use can inadvertently hurt credit scores — even if they’re making payments. This is a growing topic in our next-gen planning conversations to protect your legacy and help the next generation stay financially healthy.
Compliance Officers Worry Most About AI
57% of compliance officers rank AI use in financial services as their top concern.
Source: 2025 Investment Management Compliance Testing Survey
Why it matters:
AI is here — but not all firms are handling it responsibly. We use technology to enhance your planning experience, not replace the human judgment and relationship that’s core to trust.
$1.15 Trillion in Rollovers by 2030
Retail retirement plan rollovers are projected to reach $1.15 trillion by 2030.
Source: LIMRA Retirement Markets Forecast, 2025
Why it matters:
Rollovers are a pivotal moment — not just mechanically, but strategically. We use this opportunity to consolidate, tax-optimize, and align your retirement accounts with income and legacy goals. A rollover is not just a transfer — it’s a transformation point in your financial plan.
✅ Final Thought:
From dollar shifts and debt burdens to AI's effect on the power grid and portfolios, the world is changing fast. But your financial life doesn’t have to feel uncertain. With thoughtful planning and clear communication, we keep your retirement aligned, relevant, and resilient.