Tax-Smart Retirement Planning and the Long-Term Return of Gold
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What should I consider when choosing a retirement account?
choosing the right retirement account, and the long-term return of gold. That and more on this Saturday Personal Finance edition of Motley Fool Money. I'm Robert Brokamp, and this week I speak with financial planner and CPA Sean Mullaney about why some investors should favor pre-tax traditional retirement accounts despite all the benefits of Roth accounts. But first, here are a few items from the news last week. First up, we turn to the latest weekly asset allocation review from Urien Timmer, director of global macro at Fidelity Investments. who writes that, quote, End of quote. Indeed, since Halloween, the S&P 500 has returned 0.5% and the Nasdaq 100 has lost 2%. Meanwhile, small caps, value stocks and international stocks are up 10%, 7% and 5% respectively.
As of this taping on the morning of January 22nd, Fidelity's Timber has labeled this, quote, a bullish broadening. But those returns are nothing compared to what we've seen from gold, which brings us to our second news item of the week.
How have small caps and value stocks performed recently?
The Spider Gold Shares ETF, ticker GLD, was up 64% last year and is up 12% so far this year. This past week was the anniversary of gold hitting a then record price of $850 in 1980, which was then followed by a slump that lasted more than two decades. If you had bought at the 1980 peak and held to today's price of 4,800, your average annualized return would be less than 4%. Meanwhile, if you invested $850 in the S&P 500 back in 1980 and held to today, you would have earned a total average annualized return of 12%, and your investment would have been worth more than $161,000, according to the S&P 500 calculator on the Of Dollars and Data blog. And now the number of the week, which is 96%. That's how much of the cost of tariffs that has been absorbed by consumers and importers, according to a recent study from the Kiel Institute for the World Economy and highlighted in a Wall Street Journal article from this past week, foreign exporters absorbed only about 4% by lowering their prices.
That said, U.S. inflation has remained moderate so far, with Harvard research indicating that only about 20% of the tariffs have fed into higher consumer prices within six months of implementation, as U.S. importers and retailers have absorbed much of the costs. We shall see if that continues in 2026.
What historical insights can we gain from gold's price fluctuations?
Next up, choosing the right retirement account when Motley Fool Money continues.
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Before you start stocking away money for retirement, you'll need to pick an account type, but choose wisely because it'll shape your tax bill today and potentially decades from now. Here to discuss how to choose the right account is financial planner and CPA, Sean Mulaney, who writes the FI Tax Guy blog and is the co-author, along with Cody Garrett, of the book, Tax Planning To and Through Early Retirement. Sean, welcome to Motley Fool Money. Robert, thanks so much for having me. So the title of your book highlights early retirement.
How do tariffs impact consumers and businesses?
So in your mind, what makes someone an early retiree and what, if anything, should they be doing differently?
To my mind, an early retiree is simply anyone who retires prior to being eligible to enroll in Medicare. That is, generally speaking, the first of the month you turn age 65. And indications are a majority of Americans do early retire. And there's plenty of reasons for that. Sometimes it's choice. Sometimes it's we've got enough money saved up. So why are we still working? And sometimes it's a layoff or my job got obsoleted or whatever it might be.
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Chapters
8 chapters
1
What should I consider when choosing a retirement account?
0:04–1:29
2
How have small caps and value stocks performed recently?
1:29–2:55
3
What historical insights can we gain from gold's price fluctuations?
2:55–4:00
4
How do tariffs impact consumers and businesses?
4:00–6:40
5
What defines an early retiree and their unique challenges?
6:40–8:20
6
Why might pre-tax traditional accounts be preferable for some?
8:20–12:45
7
What are the benefits of Roth conversions in retirement planning?
12:45–14:44
8
How can retirees effectively manage their tax liabilities?
14:44–22:00