Originally aired on KAOX, KID, KNRS, and KSL

How Falling Interest Rates Could Revolutionize Your Utah Retirement Strategy

Published: March 22, 2025
Author: Mike Stevens, Capital Wealth Advisors
Episode: Retire Right Radio, March 22, 2025

Originally aired on KAOX, KID, KNRS, and KSL. This comprehensive guide is based on the March 22, 2025 episode of Retire Right Radio with Mike Stevens, founder and president of Capital Wealth Advisors.

Introduction: From Tragedy to Triumph – Why Your Retirement Plan Needs More Than Just Interest

At 45, Mike Stevens is four years younger than his father was when everything changed forever.

When Stevens' father Len passed unexpectedly at 49, it didn't just break a family—it exposed the dangerous financial reality facing Utah families every day. Len was a successful custom home builder who handled all the investments, taxes, insurance, and financial planning for his family. His wife Susie was "quite hands off" with the finances.

Sound familiar?

The devastating details tell a story that plays out in households from Draper to Logan every single day: no proper estate planning, expensive legal fees draining the family wealth, people trying to take advantage of a widow's lack of financial knowledge, and—perhaps most crushing of all—a life insurance policy that had lapsed just three months before Len's death.

But from this tragedy emerged something extraordinary: a retirement planning revolution that has helped thousands of Utah families avoid similar devastation while building superior retirement strategies that actually benefit from changing interest rate environments.

As interest rates potentially enter a new era of decline, most Utah retirees are asking the wrong question. They're worried about earning less interest, when they should be asking: "How can I use this environment to create the retirement security my family deserves?"

This comprehensive guide will show you how falling interest rates could actually strengthen your retirement plan—if you know what to do.

🔑 Key Takeaways for Utah's Interest Rate Environment

The Interest Rate Reality: Since 1929, 12 of 14 Fed rate cuts led to positive S&P 500 returns over the following year Healthcare Cost Crisis: Healthcare expenses inflate at 3.65% annually vs. 3.27% general inflation rate over 110 years The Portfolio vs. Plan Trap: Most retirees have portfolios but lack comprehensive retirement plans—the difference is critical
Fixed Index Annuity Advantage: Zero loss floors with 8-9% upside caps currently available with no fees The 567 Social Security Trap: Married couples have 567 different filing combinations—optimization is crucial Pension Analysis Gold Mine: Many pension holders can optimize through lump-sum IRA rollovers vs. monthly payments

The Personal Story That Changed Everything: From Medicine to Financial Mission

A Mission Born from Necessity

When Stevens was studying to become an orthopedic surgeon, dissecting a cadaver in physiology class, he realized "this is really not as much fun as what I thought it was going to be." Simultaneously, he was learning about financial planning to help his mother navigate her financial crisis.

"I literally gravitated to what I was learning. And I just kind of felt prompted in my heart, like, hey, this is the path that you need to go down," Stevens recalls.

The transformation was complete: from a future in operating rooms to changing lives through financial planning.

The Crisis That Created a Solution:

• Father passed at 49 without proper estate planning
• Expensive probate process drained family wealth
• Life insurance policy lapsed 3 months before death
• Mother left without financial knowledge or support
• Unscrupulous people tried to take advantage

Stevens notes: "Nothing good could come of it. So it was just bad news. Everything was not set up properly, expensive legal fees."

The Retirement Money Map: Born from Necessity

From his mother's crisis emerged what would become Stevens' trademarked "Retirement Money Map"—a comprehensive planning system that addresses the five critical areas most retirees neglect:

1. Income Planning - Creating sustainable retirement paychecks
2. Tax Planning - Minimizing lifetime tax burden
3. Investment Management - Balancing growth and protection
4. Healthcare Planning - Addressing accelerating medical costs
5. Legacy Planning - Ensuring wealth transfers efficiently

The Revelation About Accumulation vs. Distribution:

"I kind of thought all financial advisors did the same thing. And the reality is they don't. You have advisors that will focus on accumulation. And you have advisors that will focus on distribution."

The Big Company Problem: Stevens discovered that many large financial firms focus solely on investment returns: "If you ask them about, hey, can you tell me about like a tax strategy? They'll say, 'That's not our wheelhouse.' Can you tell me about how to optimize my social security? 'Yeah, we don't do that either.' How about legacy planning or healthcare planning? 'Nope. Not what we do. We focus on just pure rate of return.'"

The Interest Rate Opportunity: Why Lower Rates Could Boost Your Retirement

Historical Perspective: 12 Out of 14 Times

Stevens shares a powerful statistic: "Since 1929, there's been about 14 instances where the fed's cut rates. And in 12 of those, the S&P posted positive returns over the following 12 months."

The Two Exception Years:

• 2001: Dot-com bubble burst, S&P down 13%
• 2007: Subprime mortgage crisis, S&P down 17%

Why Lower Interest Rates Often Help the Stock Market: "Falling interest rates actually could benefit the stock market... because borrowing becomes cheaper for both businesses and consumers, which stimulates economic growth. And when there's economic growth, stock market usually does pretty good."

The Utah Retiree's Dilemma: Sequence of Returns Risk

But here's where it gets dangerous for Utah retirees. Stevens paints the scenario: "Just pretend that you're in retirement. And pretend you're like, 'Hey, this has been fun. We've been traveling and spending time with grandkids. But uh oh, the stock market's down 17%. So we just lost close to 20% of our portfolio. How do you feel?'"

The Forced Selling Crisis: "Part two of that is you go, 'Well, I'm a retiree and I need a paycheck. So you're saying that I got to sell when the market's down to be able to get my monthly paycheck. And I'm locking the losses in.'"

The Bucket Strategy: Utah's Solution to Interest Rate Volatility

How It Works in Practice:

Stevens explains his firm's approach: "We deliberately have our protected accounts. And we have our market accounts. So in that 2001 instance and 2007 instance when the market was down, you would have left that money alone. You wouldn't have sold any equities. You would have shifted from taking your income from equities to your protected account, which hadn't lost any money."

The Mathematical Beauty: "We allow time to do its wonderful thing and rebound the markets over time. And it's win-win. And that's again, why I tell people all the time, you can't just have a portfolio. There has to be a plan."

Fixed Index Annuities: The Utah Retiree's Secret Weapon

Why Stevens Changed His Bond Recommendation

"I used to like bonds, and right now I don't, just being very direct. There is a better way, in my opinion."

The Bond Problem:

• Long-term bonds (20-30 years) required for decent yields
• Massive time commitment with interest rate risk
• Inverse relationship to interest rates creates volatility

Stevens' Current Recommendation: "Currently, I'm actually a fan of fixed indexed annuities and plain vanilla ones without any fees or without any income riders."

The Fixed Index Annuity Advantage

How They Work:

• Growth linked to S&P 500 performance
• Cap at 8-9% (if S&P gains 12%, you get 8-9%)
• Floor at 0% (if S&P drops 14%, you get 0%)
• No fees on quality products
• 7-10 year commitment vs. 20-30 for bonds

Stevens emphasizes: "If the S&P is negative 14 percent, then it has a floor of zero. So you got a safety net, and you would get everything in between zero to eight to nine. So if it made 7.4, then you got 7.4."

The Quality Control Problem

Not All Annuities Are Created Equal:

Stevens uses the Ford analogy: "Ford makes a Mustang. And they also made the Pinto... You could say Ford sucks. Well, does it or does that product specifically suck?"

The Commission Problem: "I think annuities get a bad rap, because a lot of insurance agents will sell them to make high commissions. But they're selling really lousy products. And those really lousy products pay the highest amount of commissions."

The Fiduciary Advantage: "If you have a fiduciary that's like, 'Hey, you know what? Here's the best products. And this product is in your best interest'... Doesn't pay the highest amount of commissions by any stretch, but it's going to perform a lot better for you."

The Laddering Strategy for Utah Retirees

How Laddering Works: Stevens explains: "Laddering basically involves spreading your investments across those financial instruments with staggering maturity dates. We also don't do just by year. We'll do by month."

Real Example:

• $200,000 matures in February
• $100,000 matures in August
• Different maturity dates capture different market levels
• Reduces timing risk

The Bucket Integration: "What this is called is the bucket approach. So you have your safe money where you have the money that can't go down when the market goes down. And we get to ladder those type of investments. And then we have your market money."

The Healthcare Cost Time Bomb: Why Interest Rates Are Secondary

The Sobering Statistics

Stevens shares alarming healthcare inflation data: "Healthcare costs are actually on average inflating by 3.65% per year. And our average, if you look at inflation over the last 110 years, has averaged about 3.27%. So healthcare costs [are] inflating more."

Historical Context: "If you go back and you look at the CPI back in the early 1900s, you had years where inflation was 18% and 20% and crazy high numbers... And then you had higher inflation during the war, the 40s. And then I'm sure many of you guys remember the 70s, there's high inflation in the 70s."

The Calculation: "Even with all those really high inflation years, and healthcare is still outpacing inflation, right?"

The Psychological Trap of Healthcare Fear

Stevens observes a dangerous pattern: "People go into retirement. They're usually young and healthy, you know, mid 60s. And people are really excited. So they spend, spend, spend. And a couple of years later, they flip the switch and they go, 'We can't because we might need this for healthcare costs down the road.'"

The Devastating Result: "So no more, no more having fun. It's done. That's no way to live retirement, right? That's terrible. You need to actually have a plan."

The Retirement Money Map Solution

How It Addresses Healthcare Costs: "That's what our retirement money map does for people is it shows them, 'Look, here's if you need healthcare, here's what it looks like. And if you don't need healthcare, here's what it looks like.'"

The Portfolio Problem: "I find too often people just have a portfolio. They have a 401k. Maybe they have an IRA. Maybe they have a Roth. Maybe they got some pension. But there's these individual little puzzle pieces that people don't know how to put together to actually make a pretty picture."

Social Security Optimization: The 567-Strategy Challenge

The Professional Negligence Problem

Stevens identifies a critical industry failure: "No advisor gets paid to manage social security benefits. Think about that. So if you're not getting paid to do something, why would you invest a lot of time to understand how it actually works?"

The Complexity Crisis: "There's literally, if you're married, there's over 567 different filing combinations for filing social security. Isn't that wild? That's ridiculous."

The Lazy Advisor Problem: "Most advisors, they'll just say, 'Oh, claim it at this age or claim it at this age.' And they're not looking at things like from a tax standpoint, what that would do or affect Medicare."

The Comprehensive Social Security Strategy

What True Optimization Considers:

• Tax implications of claiming strategies
• Medicare premium impacts (IRMAA)
• Spousal benefit opportunities
• Survivor benefit planning
• Coordination with other retirement income

Stevens emphasizes: "You really have to have a very intentional and detailed decision-making process on when to take social security. Because if you do it the wrong way, that could negatively affect you."

Pension Analysis: The Hidden Optimization Opportunity

The Life-Only Pension Disaster

Stevens shares a recent real-world example: "A few days ago, [we met] with a couple and we're filling out the pension paper. And I noticed that they had selected option one."

The Dangerous Mistake:

• Husband selected highest payout option
• Option One = "life only" pension
• If husband dies, wife gets nothing
• "They're both mortified"

The Broader Problem: "A lot of people they don't really know what they're signing. And there's no way to go back and fix that. So there's unfortunately been a lot of people historically that have selected that wrong option."

The Lump Sum vs. Monthly Payment Strategy

Lump Sum Advantages:

• Roll directly into IRA (tax-free transfer)
• Maintain investment control
• Enable strategic Roth conversions
• Provide survivor benefits to spouse
• Allow money to pass to heirs

Monthly Payment Disadvantages:

• Immediate tax liability on payments
• No control over investments
• Pension stops when both spouses die
• Subject to company financial health

Stevens explains: "If I take that IRA money and I responsibly grow it and there's still money there when my wife and I pass away... the money is going to go to loved ones versus stopping."

The Expense Plan: Beyond Budgets to Retirement Freedom

Why Stevens Hates the "B-Word"

"I kind of dry heave a little bit when I say this word, budget, right? I don't like budgets. And I don't know many people [who] do."

The Guardrail Approach

How the Expense Plan Works:

• Establish minimum spending level (avoid under-spending)
• Set maximum spending level (avoid over-spending)
• Create flexibility within guardrails
• Stress-test the plan for various scenarios

Stevens explains: "We use the expense plan that puts these guardrails in place where we say, 'Cool, don't spend more than this and make sure you're spending at least this and have fun. Do exactly what you want to do, but just stay within those parameters.'"

The Under-Spending Crisis

The Problem Stevens Observes: "There's a lot of people that we see that aren't spending enough because they don't have a plan in place and they feel like, 'Hey, I'm going to outlive my money.'"

The Solution: "When we do very intentional stress-tested plans where we say, 'No, look, you should at a minimum spend at least this much money per month.' People are like, 'Sweet.'"

Getting to Know Mike Stevens: The Personal Side

The Lightning Round Reveals

Bucket List Goal: Skiing in northern Japan

• Plans were derailed by COVID in 2020 (his 40th birthday)
• Still planning to make the trip

Biggest Pet Peeve: Being late

• Arrives 10 minutes early to church every Sunday
• Values punctuality highly

Favorite Comfort Foods: Pizza and cheesecake

• "I love the fatty foods"
• Not a sugar person, prefers savory

Favorite Athlete: Jeremy McGrath (motocross)

• Used to race dirt bikes as a kid
• Provided financial planning for supercross racers
• Got to meet his hero—"great guy"

Movie He'll Watch Repeatedly: Stand by Me

• Classic 1980s film

Morning Routine: Sleep → wake up → exercise → read scriptures → take kids to bus stop → office

Early Financial Lesson: The Entrepreneurial Nine-Year-Old

Stevens shares his first business venture: "I got chestnuts and different nuts that you'd have to break with the nut-breaker. And I'm like, 'All right, cool. I'm going to take these nuts and I'm going to go door to door and sell these nuts.'"

The Family Foundation: "My mom and dad grew up in an affluent part of Calgary. And all my friends would get whatever they wanted from their parents. And my parents thankfully taught me the value of hard work."

Common Utah Retirement Questions Answered

Q: "What could the impact be on my pension if I decide to retire early?"

Stevens' Analysis: The key question isn't just about early retirement penalties, but optimal distribution strategies.

Pension Optimization Considerations:

• Compare lump-sum vs. monthly payments
• Analyze tax implications of each option
• Consider survivor benefit needs
• Evaluate investment control preferences
• Plan for estate planning objectives

Stevens emphasizes: "It's how to get the money out efficiently... It's how do I get my pension in the most tax-favorable way as possible and enjoy it the best that I can."

Q: "How might healthcare costs affect my retirement savings?"

The Mathematical Reality:

• Healthcare inflation: 3.65% annually
• General inflation: 3.27% annually (110-year average)
• Healthcare outpaces inflation despite including extreme years (18-20% inflation in early 1900s, war years, 1970s)

Stevens' Planning Philosophy: "You need to actually have a plan... Our retirement money map shows them, 'Look, here's if you need healthcare, here's what it looks like. And if you don't need healthcare, here's what it looks like.'"

The Car and Gas Analogy: Why Plans Beat Portfolios

Stevens' Perfect Metaphor

"The portfolio would be like gas that you put in the car, right? You need the car to be able to drive you. So obviously there needs to be money in a portfolio. But you can't just say, 'Well, cool, I got my gas. So buckle up. Here we go.'"

The Missing Element: "You can't just have a portfolio, there has to be a plan. So the car in my analogy would be akin to the plan, right? There's the vehicle that's going to help the plan go."

The Navigation System: "You actually have to have a working plan to get you to where you need to go."

Strategic Review: The Twice-Yearly Retirement Check-Up

Beyond Statement Reviews

Stevens advocates for strategic reviews at least twice yearly: "It's not just to say, 'Well, cool, let's review your statement together' because, come on, let's be honest, you're smart enough that you can open a statement and see printed right in front of your face rate of return."

What Real Strategic Reviews Include:

• Market environment analysis
• Opportunity identification
• Risk reassessment based on life changes
• Tax planning coordination
• Social Security optimization reviews
• Estate planning updates

The Value of Professional Guidance

Portfolio Risk Reassessment: "You were working and... you said, 'All right, cool. I'm now retired.' Well, do you want to have the same amount of risk in your portfolio?"

Tax Planning Integration: "We really look at investments through a tax lens. So you pay less to the IRS and potentially keep more for yourself."

The Compound Benefit: "By doing the tax planning, what that can do is help boost spendable income to counter those lower interest rates that we're talking about."

Estate Planning in a Low Interest Rate Environment

The Hidden Opportunity

Stevens notes: "These falling rates, it can also affect estate planning and not a lot of people really think about that, but particularly plans involving trust and gifting."

Why Lower Interest Rates Help Estate Planning:

• Lower discount rates for valuation purposes
• More favorable gift and estate tax calculations
• Enhanced effectiveness of certain trust strategies
• Improved economics for family limited partnerships

The Urgent Need for Planning

The Portfolio Review Reality Check: "There's a lot of reasons why you should be looking at your portfolio more than once a year. And you're like, 'Oh, well, I like it. Mine once every five years.' Let's change that."

The Retirement Acceleration Opportunity: "Really what that means is better retirement. It means that if you're not yet retired, you could retire potentially sooner than what you were hoping."

The Retirement Money Map: Your Blueprint to Success

What Makes It Different

Not For Sale: Stevens emphasizes: "This is actually not something that's for sale. We periodically do complimentary versions of that really awesome trademark proprietary retirement money map."

Professional Validation: "I've watched over the years as we've brought on attorneys or CPAs as clients. And then they're like, 'Hey, I want my clients to have this.' They'd call us up and say, 'Hey, can you do that retirement money map for clients?'"

The Five-Pillar Framework

Beginning with the End in Mind:

• Start planning from age 100, work backward
• Reverse engineer income needs
• Stress-test multiple scenarios
• Plan for longevity risk

The Comprehensive Approach:

1. Expense Planning - Guardrails for sustainable spending
2. Inflation Planning - Protect purchasing power
3. Tax Planning - Minimize lifetime tax burden
4. Investment Management - Balance growth and protection
5. Legacy Planning - Efficient wealth transfer

Taking Action: Your Next Steps in a Changing Interest Rate Environment

The key insight from Stevens' approach is that falling interest rates don't have to derail your retirement—they can actually enhance it if you know how to adapt your strategy.

The Traditional Approach Problem: Most Utah retirees focus only on earning interest, missing the bigger opportunities that changing rates create for tax planning, Social Security optimization, estate planning, and overall portfolio balance.

The Capital Wealth Approach:

• Use bucket strategies to capitalize on market growth while protecting against downturns
• Leverage fixed index annuities for safe money with upside potential
• Optimize Social Security claiming strategies across 567 possible combinations
• Coordinate pension distributions with overall tax planning
• Plan for healthcare cost inflation that exceeds general inflation

Why Professional Guidance Matters: As Stevens notes, "No financial advisor can control the stock market... But the cool thing is you can control how much in taxes you want to pay. And that's like putting money back in your pocket, especially when you're doing it strategically."

Your retirement success isn't about predicting interest rates—it's about building a plan that works in any rate environment.

📞 Call: 801-210-5500
📱 Text "VISIT" to 801-210-5500
🌐 Visit: capitalwealth.com
📍 Additional Resources: retireutah.com

Capital Wealth Advisors — helping Utah families build resilient retirement plans that thrive in any interest rate environment since 2006, with offices serving the greater Salt Lake City area and clients throughout Utah.

Remember: The goal isn't just accumulating assets—it's enjoying the retirement of your dreams. As Stevens puts it, "Accumulating assets, it's really one step of our journey, but enjoying the retirement of your dreams, that's the goal."

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