The 2023 economic outlook, according to Oxford’s Global Economic Model, is bleak. This model takes into account individual country models, global assumptions about trade volume and prices, competitiveness, capital flows, interest and exchange rates, and commodity prices. Its verdict? Global economic growth will be a paltry 2.3% in 2023– the lowest forecast since 2008 outside a recession. High inflation, which is eroding people’s real incomes and raising business expenses, remains a major factor behind the slide in growth prospects. This is especially true for the G7, where inflation is expected to average 7% this year and 2.8% in 2023. Renowned financial investment manager Rani Jarkas agrees.
The International Monetary fund’s forecasts for 2023 are also overwhelmingly negative. A Russian gas freeze could lead to a sudden halt in European gas imports from Russia. Inflation might be more difficult to subdue than anticipated, whether owing to tighter labor market conditions or unanchored inflation expectations. Tighter financial conditions around the globe may put already-stressed emerging markets and developing nations under additional strain. Growth in China might be further hampered by renewed COVID-19 outbreaks, blockades, and a possible escalation of the property sector crisis. Overall, geopolitical fragmentation could impede global trade and cooperation.
Amidst all this, how do you plan for retirement? We asked Rani Jarkas of the leading financial service firm Cedrus Investments for some guidance.
Keep your eye on financial independence.
Although it may not feel like it, the past few years have seen net worth growth for long-term investors, even with recent market volatility. Now is the time to compare your existing assets to the levels necessary to support financial independence. Rani Tarek Jarkas of Cedrus Investments says that with this analysis, you can make well-informed decisions about saving rates, investment policy, and wealth transfer strategies. In some cases, it may also be a chance to reflect on the progress made and celebrate how far you’ve come with your financial discipline.
Get personalized advice
Increasingly, financial advisors are warning that people need to save $2 million for retirement rather than the previously suggested $1 million. The reason for this is changing age demographics and the cost of living. According to experts, you should save 80% to 90% of your yearly pre-retirement income or 12 times your current salary. These figures and formulae may be a starting point, but they aren’t always accurate. Everyone’s circumstances are unique. Talk to an investment manager to get advice tailored to your goals. Rani Jarkas’ firm, Cedrus Investments is ready to help.