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As we help people prepare for retirement, one big question comes up all the time: “How much will I need to retire?” Unfortunately, the exact amount needed is different for everyone. However, there are steps you can take to determine on your own how much you need to retire comfortably.
Why it’s important to understand how much you will need
Understanding how much you’ll need to retire comes with many benefits. Primarily, when you know how much you need, you can take steps to reach your retirement goals. By taking these steps, you can improve your ability to:
Retire on time
Having enough money to provide for your retirement can help you retire once you hit retirement age. This way, you get to decide for yourself how you spend your later years.
Generate enough retirement income
One of the most important aspects of preparing for retirement is ensuring you can generate enough income to sustain yourself. If you’ve figured out how much you’ll need, you can make sure you can afford your bills, your healthcare, and other important life expenses.
How to determine how much you need
Choose your desired retirement age
Once you figure out how much you need, you can compare that to how much you have. This can help you determine how much more you need to save. Using your own timeline for when you plan to retire, you can then plan out your best course for hitting your retirement goals.
Account for your needs
Again, every person—and their needs—are different. There are still some steps you can take to figure out how much you’ll need to retire on your own terms. The process requires deciding how you want to retire and calculating how much that might cost. These steps include:
Some retirement strategies suggest a specific amount you might need for retirement. The fault in this method is that it’s simply a guess. There’s no one magic amount that works for everyone. By calculating how much you’ll need for retirement, you take your own personal needs into account.
Depending on your birth year, your retirement age is somewhere between 66 and 67 years old. While that could change in the future, it sets a good benchmark. Some people retire early; some continue working for several years before they retire. The age you retire is an entirely personal decision. It’s important to keep in mind that your desired retirement age can affect how much you have to save and how long you have to do it—which is why it’s an important first step.
Determine your desired lifestyle
Once you retire, what do you want to do? You might want to travel. You could start a small business or invest your time in a favorite hobby. Maybe you’d like to stay at home, move to a new city, or enter a retirement community. What you do when you retire is up to you—and there are no wrong answers. No matter your planned retirement lifestyle, it comes with its own specific costs. Once you’ve decided your potential life after retirement, you can begin to calculate how much you’ll need to achieve it.
Create a retirement budget
Your living expenses, healthcare needs, and lifestyle costs all require income. With some research, you can determine what your chosen lifestyle might cost you. Using this, you can determine how much money you’ll need each month to sustain you. It’s helpful to create detailed, organized lists of expected expenses and their costs. The more specific your budget, the more accurately you can calculate your retirement savings needs.
Factor in inflation, debts, life expectancy, etc.
The unfortunate part of saving for retirement is that it asks you to become something of a fortune teller. Things like inflation, life expectancy, and your personal debt can seem impossible to predict. The good news is, there’s extensive research available to help you estimate these numbers. Internet searches can help you find the current life expectancy for your gender and location. Economists often release data on expected future inflation.
Calculating your personal debts might take more work. For instance, you might try to figure out whether you plan on moving to a new home or purchasing a new car close to retirement. When all else fails, financial advisors can help you more accurately calculate how economic changes might affect your retirement savings needs.
Alternate calculation methods
There are some other methods of calculating your retirement savings needs. While these methods might offer help creating an estimate, keep in mind that these methods don’t take your personal needs into account.
The 4% rule
The 4% rule is simple: take your desired annual retirement income and divide it by 4%. The result is how much you’d need in savings to receive that yearly income. Specifically, the 4% rule helps you understand how much money you’d need to save to sustain yourself for 30 years.
Retirement calculators
With a quick internet search, you can find several retirement calculators. These calculators ask you to put in information about your age, income, and needs. They then use this information to calculate how much you’ll need for retirement. Retirement calculators can also help you figure out how much you need to save each month in order to reach your savings goals.
Age method
The age method is less of a calculation and more of a guideline. Instead of taking your needs into account, it suggests generic retirement savings benchmarks based on your age. It frames these suggestions as multiples of your annual income. Different sources may suggest different amounts, but a typical age method chart might look something like this:
Salary x1 by age 30
Salary x2 by age 35
Salary x3 by age 40
Salary x4 by age 45
Salary x6 by age 50
Salary x7 by age 55
Salary x8 by age 60
Salary x10 by age 67
Again, these are generic benchmarks. Your actual needs might require a higher or lower amount of income saved for retirement.
How to build retirement savings
The great news is, with saving for retirement, you have many options. We’ll discuss some of the most popular options, but a financial advisor might have additional suggestions based on your income, goals, and capabilities.
Savings accounts
Savings accounts are simply accounts you hold at the bank. The amount you deposit into the account is entirely under your control. It’s important to note that savings accounts don’t grow over time unless you deposit more money into them. Though some accounts generate interest, it’s often a low amount that falls below inflation rates. This means that the longer your money stays in a savings account, the less it might actually be worth.
401(k) accounts
401(k) accounts are one of the most popular long-term retirement plans available. In fact, your employer likely offers a 401(k) option. With this type of account, the money you contribute gets invested in a way designed to grow slowly over time. The more you contribute, the more investments you can make, and the more your account can grow. 401(k)s have maximum annual contribution limits. In 2022, 401(k) accounts have an annual contribution limit of $20,500.
401(k) plans are tax deferred, meaning you don’t pay tax on your contributions. Effectively, this works as a tax deduction—lowering your taxable income by your contribution amount and potentially lowering your tax rates. Instead, you pay regular income taxes on 401(k) distributions when you receive them during retirement.
As an added bonus, many employers offer employer match options for your 401(k). An employer match option literally offers you free money. With an employer match, your employer matches a portion of your 401(k) contributions. This option might be opt-in, so consider researching whether your employer offers this to help maximize your 401(k) plan growth.
IRAs
Individual retirement accounts are another option for long-term retirement savings. Much like a 401(k), your contributions get invested so your account can grow over time. There are several types of IRAs you can choose from. Traditional IRA contributions are pre-tax, only getting taxed once you receive them as income distributions. Roth IRA contributions are after tax. With after-tax contributions, you pay taxes upfront. However, you get to receive your distributions as tax-free income. Which type of IRA you choose can depend on whether you’d rather pay income taxes based on your current income or retirement income.
Social security
Social security is, essentially, a tax you pay. You automatically contribute a portion of your income into social security. The basic idea is that the current worker base pays a tax that helps fund the retirement of current retirees. This can make social security potentially unstable and risky. If there are more retirees than workers, there might not be enough funds to go around. Still, when combined with other retirement accounts, social security can be an invaluable source of retirement income.
Traditional investments
If you’d like, you have the option of investing your money directly into the stock market or other investments. Investing in the stock market can come with high risks. Because of the intricacies of the market, success can require knowledge, experience, and patience. If you decide to invest your money this way, it’s highly recommended you hire a financial advisor. An advisor can help you develop an individualized investment strategy based on your risk tolerance level and money personality. They can also give you up-to-date investment advice based on current market trends.
What to do if you don’t have enough to retire
So, what happens if you’re approaching retirement and realize you don’t have enough saved up? If this is your situation, you have some options available to you.
Catch-up contributions
Many retirement accounts give you options for saving more the closer you get to retirement. These catch-up contributions raise the annual contribution limits to your accounts, allowing you to save even more each year before you retire. This way, you can supercharge your retirement accounts’ growth just before you’re ready to retire.
See Also: Later in Life Investing: What You Should Know
Continue working
If you don’t have enough money for retirement, you might choose to continue working. Though this option is less than ideal, it can help you continue to make contributions to retirement accounts before taking required minimum distributions (RMD). This can also help you take further advantage of your retirement accounts’ catch-up contributions.
Hire a financial advisor
When saving for retirement, a financial advisor is almost always a wise choice. If you’ve found you haven’t saved enough for retirement, a financial advisor can help you develop a plan to retire on your terms.

When they were first introduced in 1935, Social Security retirement benefits were a game changer. It ensured that retirees aged 65 and older could receive an income even after leaving the workforce.
Over the years, retirement options have expanded. New account options, new retirement protection laws, and new investment opportunities help workers supplement their Social Security benefits and create their dream retirement.
Regardless of these expanded options, Social Security remains the cornerstone of retirement for many Americans. Over the last few years, a lot of them have "unretired"—that is, they've returned to work after already receiving their benefits.
This begs the question: Does returning to work impact their Social Security?
The "Unretiring" trend
When the COVID-19 pandemic hit, it brought with it an uptick in retirement. In 2020 alone, 3.2 million more boomers retired than in 2019. It was the most boomers ever to retire in one year.
There were several reasons for this. Many boomers were laid off or forced into retirement. Others left the workforce because of safety concerns when facing an unknown virus. Those without a degree found it difficult to gain safer employment, such as positions that let them work from home.
In the years since our economy inched closer to a recession. Whether we're in one now (or soon will be) remains up for debate. Either way, inflation is on the rise and prices are going up. The stock market's current rollercoaster trend has affected many 401(k)s and other retirement accounts. The current worker shortage means there are many open jobs that need filling.
These conditions have helped many retirees decide to rejoin the workforce. In the last year and a half, 1.5 million retirees have gone back to work—many of whom had already begun receiving Social Security benefits.
How Social Security works
In some ways, Social Security works like a savings account: you put money in and, eventually, you take money back out.
But it's actually a little more complicated than that.
When you pay your income taxes, a percentage of your earnings goes into Social Security. But it doesn't go into a personal "account" or another fund that continues to build until you retire. Instead, the money you pay in gets used almost immediately—as income for current retirees and other social security recipients.
Then, when you retire, those working during your retirement pay for your Social Security payments.
Ideally, Social Security earns more tax money over time, as average incomes go up. This helps immensely, as they adjust retirement payments to reflect the cost of living.
It works like this: the Social Security Administration (SSA) considers up to 35 years of your highest annual earnings—that is, those years you paid the most into Social Security. They then index those earnings to reflect modern wage amounts. These calculations help them determine your monthly benefit.
Depending on your full retirement age (FRA), Social Security payments could replace around 35% of your pre-retirement income.
Does retiring early affect social security benefits?
You can start collecting Social Security payments five years before you reach your full retirement age. For those born after 1960, the FRA is 67 years old. This means you can apply for Social Security once you turn 62.
The idea of early retirement appeals to many of us. However, it comes with a downside.
When you receive Social Security before you reach 67, you actually receive lower payments. The payments become lower for each month you receive benefits before reaching your FRA. The SSA offers this handy chart to help you figure out how much retiring early could affect your benefit checks.
If you wait until 67 (or whatever your FRA is), you're entitled to your full retirement benefit payments.
Another reason to delay retirement
If you wait to receive benefits until after your FRA, your payments can actually go up. For every year beyond FRA that you delay retirement, you earn an 8% bonus to your Social Security payments. This bonus accrues each year until you reach age 70.
If your FRA is 67 and you wait to receive benefits until you turn 70, your payments could go up 24%!
Are you allowed to work/receive income during retirement?
The simple answer is "yes." It's perfectly legal for you to return to work and earn an income even after you've retired. However, the SSA sets income limits. These limits change every year and depend on whether you've reached your FRA. It's a system referred to as the "retirement earnings test."
If you retire before you reach FRA, the annual limit for 2022 is $19,560.
If you retire once you've hit FRA (or after), the annual limit for 2022 is $51,960. If you retire the same year you reach FRA, only the income you earn before retiring counts toward your limit.
As long as you stay below these amounts, you can receive your full benefits.
What happens when you earn above the limit?
Once you've earned above the annual limit, it affects your Social Security payments. If you've retired early, the SSA withholds $1 from your benefits for every $2 you've earned over the limit. If you've reached FRA, they withhold $1 for every $3 you earn over the limit.
To earn $19,560 in a year, you'd need to earn about $9.40 an hour and work full time (40 hrs/wk, 52 wks/yr).
If you live in a state with a $15 minimum wage (like California), working full-time would earn you $31,200. That's $11,640 over the limit and could cost you $5,820 in benefits.
Can my benefits go up by unretiring?
Actually, your benefits can go up by unretiring—on one condition.
If your annual income from work is one of the highest in your career, the SSA recalculates your benefits. This is because you're paying a lot more into Social Security. Depending on how much more you made (and contributed), your benefits might actually go up.
Creating a full retirement plan
As we've seen over the past few years, the economy can be fickle and unpredictable. That's why I always recommend that Social Security should only be one leg of a full retirement plan. Many retirement plans exist, such as 401(k)s and IRAs.
You can calculate how much you might need for retirement on your own or hire a financial advisor. Taking steps to ensure your dream retirement now can reduce your need to "unretire" in the future—and ensure you receive your full benefits!
#realestate #investing #stockmarket #bearmarket #recession #inflation #retirement #vacation #fun #information #bonds #interest

Find out what happened and what we predicted in 2022 for stocks, bonds and commodities in this highlight reel of all the Quiver Financial quarterly events where we provided outlooks for The Dollar, Metals, Oil, Interest Rates and Stock Markets throughout 2022.  So much happened in 2022 it was hard for us to trim our videos down to this 20 min. reel.  We didn't even get a chance to cover some of the asset classes we focus on like real estate.  Make sure you subscribe so you can stay up to date on what we see for 2023.
You'll get to see first hand how Quiver Financial called out the bear market in stocks before anyone else in the business. This is a must see if you are looking for actionable forward looking viewpoints on the five (5) investment categories that have the greatest amount of influence on your investments and retirement savings.
Advisory services offered through Quiver Financial Holdings, LLC a CA state registered advisory firm. Not intended to be investment advice. www.quiverfinancial.com 949-492-6900.

When creating your retirement savings plan, it's helpful to have specific goals. One such goal is when you plan to retire. Some of you might even have a specific date when you hope to retire. Target date funds are a popular retirement investment strategy that, as their name suggests, target a specific retirement date.
They're a popular option for 401k plans—and their popularity increases each year. According to a recent study by the Investment Company Institute, participants in their twenties had over 50% of their 401k funds allocated to target date funds. 65% of those hired within the past two years had investments in target date funds.
They're so ubiquitous that it's possible your employer signed you up for one as a default 401k option.
I believe that, when it comes to your retirement, you should make informed investment choices. So, let's look more closely at target date funds so you can figure out whether they're right for you—and what to do if they aren't.
The problem with target date funds
While target date funds offer some benefits, they come with some important drawbacks. These drawbacks can have serious effects on your retirement plans, including falling short of your goals. Since most retirees survive on a fixed income, not meeting those goals can have serious consequences, such as continuing to work beyond retirement age.
Here are six major drawbacks to target date funds you should consider when planning for your retirement.
One plan for all investors
Target date funds are designed to build toward a specific retirement date. That is literally their only goal. They don't account for your individual needs and goals. Your dream retirement is of no concern to the fund, making building toward it difficult, if not impossible.
It's a one-size-fits-all scenario. Unfortunately, retirement goals come in all shapes and sizes, making it unlikely that a target date fund would actually fit your needs. In those instances, there's a good chance that the fund will fall short of how much you need to retire, forcing you to make major adjustments to your plans very late in the game.
Extremely variable
If you search for specific holdings of individual target date funds, you might become surprised or confused that each target date fund has its own mix of investments, asset allocation, and growth rates. The variation between each fund is so great, if you don't choose a specific fund, it's impossible to predict what you're getting and what your retirement income might be.
Once you include other variables, such as management options and fees, it might feel even more difficult to decide which one might be best. This makes the possibility of your employer picking a plan best suited to your individual needs a little like finding a specific needle within a box of similar-looking needles all designed for a different use—without knowing which one you need to find!
All investments owned by one company
To be fair, target date funds do their best to offer a diverse portfolio. They usually include a variety of asset classes, including a mix of mutual funds, index funds, and both domestic and international stocks and bonds.
On the surface, this seems to meet the requirements for diversification. But here's a secret: each individual fund included in your target date fund is owned by the same company. Typically, this is the company providing the fund to you. So, in reality, your diversification options are severely limited. This can make finding the correct mix of investments to meet your goals more difficult than it needs to be.
No active management
One of the primary goals of target date funds is simplicity. This includes a simple management system. Most target date funds managers make minimal adjustments to your investments. Usually, these are timed maneuvers: as you get closer to retirement, the manager might move your money into safer investments.
Compare this to a financial advisor or other investment managers who can offer a more active, personalized service. They can watch the market and make in-the-moment adjustments to help you build toward your specific retirement goals.
Playing it safe
As I mentioned above, as you get closer to retirement, your fund manager gradually shifts your money into safer investments, even if you don't ask for it. However, this can have a significant impact on your retirement.
The last few years of your working life is a perfect time to catch up on your savings and make sure you reach your retirement income goals. In fact, many retirement plans increase your contribution limits once you hit 50 years of age. This ability to make adjustments to your retirement plans and maximize your earnings as you prepare to leave the workforce is an important part of later-in-life investing.
Unfortunately, the only plan target date fund managers have during this important period is to become more conservative. That's understandable, since it helps ensure you don't lose money right before retirement. But it also limits your ability to grow, which is something many of us need just before we retire.
Hidden fees
A big selling point of target date funds is that they come with a low expense ratio. And while this is true, it's only half of the story. A target date fund is usually a fund of funds: it's an overarching fund comprised of many mutual funds and investments. They also come with two layers of fees: the overall management fee and the fund-of-funds fee.
Here's another secret: target date funds are allowed to only show you the fund-of-funds fee. This gives them the opportunity to set a low fund-of-funds fee while keeping their larger overall management fee hidden from you until it's too late.
How a 401k rollover can help
Do you know how to perform a 401k rollover? It's the process of taking the money from your current 401k and reinvesting it into a new one. It's a simple process that you can accomplish in three easy steps!
If you currently have a target date fund set as your 401k plan and would like to change it, performing a rollover can help. First, you need to find your options. It might take a bit of research, but the payoff could be a better retirement. Some ways to discover your 401k options include:
Asking your employer
Looking them up on an employee portal
Logging into your account on the provider's website
Calling the provider directly
Once you find out whether you have 401k options beyond a target date fund, you can select the one that best suits your retirement goals and initiate a rollover.
Typically, you can only contribute to a 401k if your employer sponsors one. If you're self-employed, you might find a solo provider who offers the plan and account management you prefer.

Good afternoon and welcome to Quiver Financial news and this week’s episode of our Market Recap.  Today is Friday Dec. 2nd and these are the top stories for the week of Nov. 28th.  Welcome back everyone.  We hope you all had a good Thanksgiving.  This week was a busy week for news that could affect the stock market.  However only one thing really had an impact.  That was Powell’s speech.
Markets rallied during his speech as stated that they will be slowing how fast they raise rates.  This was expected but markets seemed to have taken it as they were done raising rates.  He still announced that the next rate hike in December will be 50 basis points.  These types of rallies are very indicative of bear markets rally.  Never in history has the economy done well during a time period of Fed tightening so we continue to be cautious going into year end.  2023 is still looking to be ugly.
Other noteworthy data that came out this week that had no effect on markets was a weak pending home sales that fell by 4.6%.  Oil inventories fell by over 12 million barrels.  Private payroll lower than expected, PMI came in at 49% and GDP was 2.9% however, corporate profits fell by 1.1%.  None of these negative reports seemed to phase the markets.  The only other data that did have an effect on markets was the Jobs report released today.
Jobs came in stronger than expected and the markets reacted negatively.  Maybe because investor have started to realize these numbers are becoming more and more skewed when you look at the raw data.  Large number of these new jobs came from people taking on a second job.
Price action this week, means the year-end rally may have happened in one day and we could see a little more volatility going into year end.  Bears need to be cautious here as well and Bulls.
Something to watch for next week is the price cap on brent crude and if OPEC cuts production.
And those are the top stories from this week that investors should be paying attention to.  Thank you for listening and stay tuned for next week’s Market recap.

Good afternoon and welcome to Quiver Financial news and this weeks episode of our Market Recap.  Today is Friday Nov. 18st and these are the top stories for the week of Nov. 14th. 
It was a slow week for the stock market.  Stocks seem to be taking a breather as they decide if they will continue the climb or start a pull back. 
No a lot of headlines this week that would have an impact on what the markets do.  We did get a better than expected Whole sale price.  It rose by 2 basis points as compared to 3.  However, we still sit at 40 year highs.
We are also seeing mixed results in the earnings sector of the retail space.  Target had a huge hit to its bottom line while lowes and home depot out shine.  Layoffs also continue in the tech sector as amazon announced 10,000 employees being released from its headquarters.
And those are the top stories from this week that investors should be paying attention to.  Thank you for listening we are off next Friday for Thanksgiving but will be back the week after.  Enjoy your friends and family everyone.

Colby and Patrick sit down and talk the good and bad about annuities.  
Ultimately, the most important outcome is that you reach your retirement goals. On the surface, annuities may seem like a safe bet, especially during times of market volatility.  However, they often have significant drawbacks that aren’t readily apparent to the average investor.  Before committing yourself to an annuity, be sure you ask all the right questions and understand all the details.
Welcome to quiver financial news, today we want to cover annuities.  We will talk about the good the bad and what things you should watch out for.  We are focusing on annuities right now because if you haven’t already.  You will start to see a major push from individuals that only sell annuities because of the volatility in the markets and the rise in interest rates.  This instrument will start to look more attractive.  So, we wanted to draw your attention to this topic so that you can watch out for the tricks that are used to entice you.  I am joined today with Colby Mcfadden, CEO of quiver financial and a man that has sold a few annuities in his day.  Welcome Colby.
First lets quickly define an annuity.  An annuity is a contract between you and an insurance company in which you make a lump-sum payment or series of payments and, in return, receive regular disbursements, beginning either immediately or at some point in the future.
Colby what does this general definition mean for an investor.
            Types of annuities: Fixed, indexed, variable.
What is a premium bonus and how does it work or not work?
Why do annuities become more advantages in a rising interest rate environment?
What is a renewal rate? And why should investors pay close attention to this?
So Clients will also start to see a lot of MYGA in ads. Or Multi year guarantee annuities right?
What should people do that have an old annuity, say 7 or 10 years old?
Annuities have evolved considerably and they offer more and more flexibility but that flexibility comes at a cost in the form of a rider.
What are some ways I can take payments from my annuity?
What type of expenses do annuities have?
What is a surrender charge. Am I able to take any money out of my annuity early without hitting this fee?
Let's talk about performance. These are sold because investors are told you cant lose money but what are the pitfalls to this if any and what are they upside risks?
What impact can inflation have on an annuity?
Advisory services offered through Quiver Financial Holdings, LLC.
Registered with the state of CA | Insurance License # 0L92424
501 N El Camino Real Ste 200 San Clemente CA 92672
949-492-6900 | quiverfinancial.com

Recession vs. Depression: Definitions and Differences
 
October 24, 1929 was a Thursday.
The decade leading up to that day was one of carefree affluence. Thanks to a combination of more jobs, higher wages, and expanded access to credit, the middle class had more buying power than ever before.
As luck would have it, there was an abundance of things to buy. Henry Ford's assembly line meant companies could now mass produce goods quickly and cheaply. Consumerism took its spot at the forefront of the American economy. Between 1920 and 1929, the U.S. economy had more than doubled.
This was great news for the stock market. It trended upward for a decade. Buying stock on the speculation it would continue rising (seemingly forever) became a common occurrence.
In the mid-2000s, moneylenders found ways of helping unqualified borrowers get approved for mortgages. They then figured out how to sell that debt to other entities, who could repackage it into a new kind of investment: private-label mortgage-backed security. As housing prices continued to rise, everyone made money—a lot of money.
But, eventually, the housing market began to crash (something people worry might happen again in the near future).
When people could no longer afford their mortgages, the money began to disappear. Banks, other money lenders, and investors started losing money. And, because their success (or failure) influenced the economy, things turn a turn for the worse.
In December 2007, the United States' economic downturn officially became a recession. It would subsequently be dubbed "The Great Recession." It took years to recover.
On October 24, 1929, the stock market crashed. It initiated an economic downturn we now call "The Great Depression." It lasted a decade.
So, what's the difference between a recession and a depression? While it's unfortunate that these two events happened, they give us a reference point we can use to illustrate the differences between these two types of economic contractions.
But why is learning the difference important?
Why should I know the difference?
Believe it or not, recessions happen frequently. The exact number may vary depending on who you ask, but some estimate that America has faced around 34 major recessions since the founding of the country. Around a third of these happened after 1948.
While experts have a hard time creating a definition of a "depression" that everyone can agree on, most agree on one thing: America has really only faced one major depression.
So, why should you know the difference between recessions and depressions? Here are what I think are the two primary reasons:
To help you prepare for the more common recessions.
To help alleviate your worries about extraordinarily rare depressions.
Recessions are going to happen. We've averaged one every six years or so in the last 7 decades. In fact, many worry we might be experiencing a recession at this very moment. As investors, we can use that knowledge to recognize the signs of a looming recession, create a plan of action to sustain us throughout the downturn (like learning how to invest during a bear market), and give us the patience to wait it out—we know it won't last forever.
On the other hand, depressions almost never happen. Yes, a depression has the potential to spell disaster for many of us. If you're concerned about one, I say draft up your plan and put it in a drawer for safekeeping. The odds are you'll never need it. But on the off chance that you do, you'll have it. Either way, you don't have to worry.
Now, onto some basics.
Defining economic downturns
Before we discuss their differences, it might be helpful to put on paper exactly what these two terms mean. So, let's talk definitions.
What is a recession?
A recession is a significant decline in economic activity that lasts at least a few months. The National Bureau of Economic Research (NBER) defines a recession as occurring when there have been two consecutive quarters of economic decline.
Several events and situations can trigger a recession. Whatever the trigger, the result is usually a widespread reduction in spending that affects businesses, the stock market, and other economic factors.
What is a depression?
Again, there's no definition of an economic depression that all economists agree upon. This is likely due to their rarity—with few things to compare it to, it's hard to determine the common characteristics.
What most can agree on is that a depression is a much, much bigger version of a recession. This is usually characterized by a sharp, extended economic downturn that lasts several years. Depressions feature severe declines with harsh effects spread across the economy.
What is the difference between a recession and a depression?
If a depression is just "a recession—but bigger!", does that mean the only differences are based on size?
The short answer: yes.
The more complicated answer: yes, but the differences are of such an enormous size that they're worth discussion.
That said, here are the key differences between a recession and a depression:
Duration
Though recessions can last up to a few years, they often peter out much more quickly. On average, they last about ten months before things even out and begin trending back up. Because of their frequency and compressed timeline, they're considered part of the business cycle—a cycle of alternating economic expansion and recession.
Business cycles can fluctuate in length, but they average about 4 years. Recessions are simply a natural part of the ebb and flow within that time.
Because they're more rare, depressions are harder to nail down. According to most economists, a depression lasts for at least three years—that is, longer than a recession, at minimum. Experts have a hard time deciding when the Great Depression ended, as well. Most consider the end to be 1939, though some think it didn't end until 1941 when WWII helped boost manufacturing in the U.S.
Let's look at the durations of our examples:
The Great Recession: December 2007 to June 2009 (19 months)
The Great Depression: October 1929 to ~1939 (~10 years)
Effects on Unemployment
Because a hallmark of a recession is a large decline in spending, businesses can have a hard time keeping their revenues up. This usually means cutting labor. As a result, unemployment rates go up. When the economy is doing well, unemployment in the US usually hovers at or below 5%. During a recession, unemployment can climb to 8% or higher.
It's no surprise that, during a depression, unemployment is much worse than during a recession. While this is a big problem today, it was even bigger during the Great Depression—federal social safety nets didn't exist until FDR introduced legislation for Social Security and Unemployment Insurance as part of his New Deal.
Great Recession unemployment: 10%
Great Depression unemployment: 25% (!)
Wage rates
When markets and businesses aren't doing well, they scramble to cover their losses. You might think this would affect wages during a recession—and, in a way, it can.
Wages don't typically go up or down during a recession. Instead, wages usually stagnate. This is because companies would prefer to let employees go rather than lower wages, hence the rising unemployment. Ironically, the Great Recession came at a time when citizens had been calling for wage increases—which actually occurred during the recession!
Because there was no minimum wage during the Great Depression, it's harder to determine how wages changed. But from what we can tell, wages went down during the Great Depression—for some, at least. This is likely because jobs were so hard to come by, and workers eventually decided lower pay was better than no pay at all. If you're interested in more specifics, I recommend this study by economist Curtis J. Simon.
Wage change during the Great Recession: $5.15—$7.25 (+$2.15)
Wage change during the Great Depression: ?
Effects on GDP and the stock market
The Gross Domestic Product (GDP) is the total market value of all final products (finished products ready for immediate use) produced and sold within a given time period. Because of their effects on business and production, economic downturns usually also have an effect on the GDP and the stock market.
During a recession, the GDP might fall around 2%. During a rather rough recession, it could fall as much as 5%. The stock markets also fall. As an example, we can look at the S&P 500. During most of the recessions we've experienced since the end of WWII, the S&P has fallen an average of 29%, with a median of about 24%.
For depressions, it gets much worse. Again, we look to the Great Depression. At its worst point in 1933, the GDP fell about 30%.
As for the stock market, 1932 saw the Dow Jones fall a whopping 89% below its highest point. Having lived through the Great Recession, it's hard to imagine how much worse it must have been during the Depression.
Let's compare.
The Great Recession:
GDP: - >1%
S&P 500: -55%
The Great Depression:
GDP: -30%
Dow Jones: -89%
Scope of legacy
I know I keep stating how much worse a depression is, but please understand that recessions are also quite bad. It's just that they don't affect as many people, have as severe consequences or have as many lasting effects. Things got hard during the recession. During the Depression, it's not hyperbole to say that most people barely had enough money to survive—and many didn't have that much.
And then, things changed.
By no means is everything perfect these days, but we do owe a debt to the policymakers who saw what happened leading up to and during the Great Depression and made moves to ensure that things wouldn't get that bad again.
I like to think of it this way: the legacy of a recession is that it changes people's minds. The legacy of the Depression is that it changes everybody's life. While recessions can often lead to some policy changes and a changing of personal plans, the Great Depression caused a complete paradigm shift.
With every paycheck, we still pay into Social Security. We still maintain a minimum wage which, though fallible, is still an effort to ensure people can afford to sustain themselves. The Securities Exchange Commission and the International Monetary Fund both exist as a result of the Great Depression.
The United States has experienced 34 recessions and 1 major depression. We talk about a small fraction of those recessions. But we still talk about 100% of the depressions.
Because we must.
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Good afternoon and welcome to Quiver Financial news and this weeks episode of our Market Recap.  Today is Friday Nov. 11st and these are the top stories for the week of Nov. 7th. 
Well the massive short squeeze that we talked about last week did push the markets to a rally.  The Nasdaq has had its best week since 2020.  This means if the bulls can hold their ground we could see a rally into year end.  If this happens we could see a sentiment shift and the talking heads saying the recession is over and its all clear.  Causing a bull trap.  We have said from the beginning of the year.  Bear Markets tend to cause the most frustration to the most amount of investors.  Trade cautiously.
Bonds this week also had a lot of volatility.  Rates on the longer term Treasuries dropped over 30 basis points.  This are huge moves for the bond markets.  I imagine this is a reset type of action and we could see a lot more volatility in the weeks or months ahead.  Bond markets were closed today in observance of Veterans day.
Along with rates taking a breather the dollar too had a substantial pull back this week.  I am guessing this is a reset as well and we will see the dollar rally back as this recession deepens.  This is Not trading advice just something to watch out for.
Inflation for the Month of October came in at 7.7.  leading many to believe that inflation has peaked.  However, grocery prices jumped over 12%.  Only time will tell if inflation has truly peaked.  Either way, higher inflation is here for some time.
In other news and something that will have a small impact on equity markets.  The Crypto exchanged FTX filed for bankruptcy.  This has only caused skeptics to dig their heels in deeper to the thought the crypto is just a bubble.  No matter your view, if the carnage continues it will have some effects felt in the broader markets.
And those are the top stories from this week that investors should be paying attention to.  Thank you for listening and Stay tuned for next weeks Market recap.
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Good afternoon and welcome to Quiver Financial news and this weeks episode of our Market Recap.  Today is Friday Nov. 4st and these are the top stories for the week of Oct. 31st. 
There was so much data released this week we are going to even try and cover it all in this episode.  We posted the date and times of the release so if you feel adventurous check out the description box of this weeks episode.
Top items that investors should pay attentions to were lower Manufacturing ISM numbers.  We are now 90 basis points from the historical view of having a contracting manufacturing sector.  This could mean a potential increase in job losses if this continues.
The Federal reserve as expected hiked rate another 75 basis points and Powell himself said he has no plan of stopping.  They raised their target from around 4% to now 5%. 
Unemployment rate ticked up so modestly that its almost not worth mentioning.  What I will mention is that this key stat is what has so many investors and economist sitting back on their heels thinking this house of cards is stable.
To the stock market, the rally that we called two weeks ago has continued and pushed us to another inflection point.  The put to call ratio is at its highest point since the bottom of the markets in March of 2020.  Because of this I would say trade safe for the coming week.  Normally we would agree that a pull back here would be expected.  However a rally into a close on a Friday and the over bearish sentiment since powells speech has us sitting back and watching as well.
And those are the top stories from this week that we feel you should know about.  Thank you for listening and Stay tuned for next weeks Market recap.
 
Monday, October 31
09:45 AM Chicago PMI, October (GS 48.0, consensus 47.0, last 45.7): We estimate that the Chicago PMI rebounded 2.3pt to 48.0 in October, as the Chicago PMI has overshot to the downside relative to other business surveys (GS manufacturing survey tracker -1.5pt to 48.8 in October).
10:30 AM Dallas Fed manufacturing index, October (consensus -18.5, last -17.2)
Tuesday, November 1
09:45 AM S&P Global US manufacturing PMI, October final (consensus 49.9, last 49.9)
10:00 AM JOLTS job openings, September (GS 10,000k, consensus 9,625k, last 10,053k): We estimate that JOLTS job openings declined to 10,000k in September.
10:00 AM Construction spending, September (GS -0.3%, consensus -0.5%, last -0.7%): We estimate construction spending decreased 0.3% in September.
10:00 AM ISM manufacturing index, October (GS 49.9, consensus 50.0, last 50.9): We estimate that the ISM manufacturing index declined by 1pt to 49.9 in October, reflecting weak industrial trends abroad and convergence towards other manufacturing surveys (GS manufacturing survey tracker -1.5pt to 48.8 in October).
05:00 PM Lightweight motor vehicle sales, October (GS 14.6mn, consensus 14.3mn, last 13.49mn)
Wednesday, November 2
08:15 AM ADP employment report, October (GS +200k, consensus +180k, last +208k): We estimate a 200k rise in ADP payroll employment in October.
02:00 PM FOMC statement, November 1-2 meeting: We expect the FOMC to deliver a fourth 75bp hike at its November meeting this week, raising the target range for the fed funds rate to 3.75-4%. The focus will be on what comes next, and we expect Chair Powell to hint that the FOMC will likely slow the pace to 50bp in December. We expect the FOMC to eventually pair that slowdown with a somewhat higher projected peak funds rate in the December dot plot. Our forecast calls for hikes of 75bp in November, 50bp in December, 25bp in February, and 25bp in March with the funds rate range peaking at 4.75-5%.
Thursday, November 3
08:30 AM Trade balance, September (GS -$72.4bn, consensus -$72.0bn, last -$67.4bn): We estimate the trade deficit widened by $5bn to $72.4bn in September, reflecting declining goods exports and rising goods imports in the advanced goods report.
08:30 AM Nonfarm productivity, Q3 preliminary (GS +0.5%, consensus +0.5%, last -4.1%): Unit labor costs, Q3 preliminary (GS +4.7%, consensus +4.0%, last +10.2%): We estimate nonfarm productivity growth of +0.5% in Q3 (qoq saar) and unit labor cost—compensation per hour divided by output per hour—growth of +4.7%.
08:30 AM Initial jobless claims, week ended October 29 (GS 215k, consensus 220k, last 217k); Continuing jobless claims, week ended October 22 (consensus 1,450k, last 1,438k): We estimate initial jobless claims edged down to 215k in the week ended October 29.
09:45 AM S&P Global US services PMI, October final (consensus 46.6, last 46.6)
10:00 AM Factory orders, September (GS flat, consensus +0.3%, last flat); Durable goods orders, September final (consensus +0.4%, last +0.4%); Durable goods orders ex-transportation, September final (last -0.5%); Core capital goods orders, September final (last -0.7%); Core capital goods shipments, September final (last -0.5%): We estimate that factory orders were unchanged in September. Durable goods orders rose 0.4% in the September advance report but core capital goods orders declined 0.7%.
10:00 AM ISM services index, October (GS 55.7, consensus 55.1, last 56.7): We estimate that the ISM services index declined by 1pt to 55.7 in October, reflecting convergence towards other business surveys but a sentiment boost from rebounding stock markets. Our non-manufacturing survey tracker fell by 2.0pt to 51.2 in October.
Friday, November 4
08:30 AM Nonfarm payroll employment, October (GS +225k, consensus +190k, last +263k); Private payroll employment, October (GS +225k, consensus +195k, last +288k); Average hourly earnings (mom), October (GS +0.35%, consensus +0.3%, last +0.3%); Average hourly earnings (yoy), October (GS +4.7%, consensus +4.7%, last +5.0%); Unemployment rate, October (GS 3.5%, consensus 3.6%, last 3.5%); Labor force participation rate, October (GS 62.3%, consensus 62.4%, last 62.3%): We estimate nonfarm payrolls rose by 225k in October (mom sa), a slowdown from the +263k pace in September reflecting sequentially lower—but still very elevated—labor demand. Big Data indicators were mixed in the month, but jobless claims remained very low. We also note that job growth tends to pick up in October when the labor market is tight, as firms frontload fall and pre-holiday hiring. We estimate the unemployment rate was unchanged at 3.5%, reflecting a rise in household employment and flat-to-up labor force participation. We estimate a 0.35% increase in average hourly earnings (mom sa), reflecting positive calendar effects and a possible boost from autumn recruitment efforts.
10:00 AM Boston Fed President Collins (FOMC voter) speaks: Boston Fed President Susan Collins will discuss the economic and monetary policy outlook at an event hosted by the Brookings Institution. On October 12, Collins said, “We are focused and resolute and have the tools to bring inflation back down to the two-percent target…I am anticipating or expecting additional interest rate changes.”